Filipinos living or working abroad never faltered in their commitment to send more money back home despite the prolonged COVID-19 pandemic, jacking up cash remittances to the Philippines to a fresh high of $31.4 billion in 2021.
In a statement on Tuesday, the Bangko Sentral ng Pilipinas (BSP) said cash remittances coursed through banks rose 5.1 percent from $29.9 billion in 2020.
In December 2021 alone, cash remittances increased 3.3 percent to $2.99 billion from $2.89 billion a year ago.
To recall, 2020 cash remittances posted a mere 0.8-percent decline—defying more pessimistic forecasts—from the 2019, prepandemic amount of $30.1 billion as the health and socioeconomic crises inflicted by COVID-19 forced many Filipinos overseas to support their families here, despite thousands of migrant workers repatriated at the height of the pandemic-induced global recession two years ago.
As the global economy recovered last year, the BSP said remittance inflows remained “robust” two years into the COVID-19 pandemic, as cash sent by Filipinos back home grew in 2021 versus 2020 across geographies: from the Americas, up 7.1 percent; Europe, up 5.5 percent; Asia, 4.5 percent; and the Middle East, 0.7 percent.
Top sources
Cash remittances from the United States cornered 40.5 percent of last year’s total. The other top sources in 2021 were Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar and South Korea— these 10 countries accounted for 78.9 percent of total.
“The growth in the 2021 cash remittances was supported by the increase in receipts from land-based and sea-based workers, which rose by 5.6 percent (to $24.9 billion from $23.6 billion) and 3 percent (to $6.5 billion from $6.4 billion), respectively,” the BSP said.
Formal channels
When cash remitted through formal channels were added to personal transfers in cash and kind from Filipinos abroad, total personal remittances reached a bigger $34.9 billion, also a record high and up 5.1 percent from $33.2 billion in 2020.
“For the month of December, personal remittances grew year-on-year by 2.9 percent to $3.3 billion, the highest monthly level since the tracking of personal remittances data series began in 2005,” the BSP said.
In a tweet, BSP Governor Benjamin Diokno said personal remittances accounted for 8.9 percent of the Philippines’ 2021 gross domestic product (GDP). These inflows were also equal to 8.5 percent of last year’s gross national income (GNI) or total income generated by the country’s residents within and outside its borders. GDP—a proxy for economic performance—measures only local output.
“The growth in personal remittances reflected a pickup in overseas Filipino workers’ deployment, strong demand for OFWs amid the reopening of host-economies to foreign workers, and the continued shift to digital support that facilitated inward transfer of remittances. The strong inward remittances, in turn, contributed to the increase in domestic demand,” the BSP said. Following its worst post-war recession in 2020, the Philippines’ GDP reverted to a better-than-expected 5.6 percent growth in 2021.
The BSP said personal remittances were boosted by growth across land- and sea-based OFWs whether with short- or long-term contracts.