OFW remittances inched up by 2.8% in H1 to $17.1B

Personal remittances from overseas Filipino workers (OFW) grew by 2.8 percent in the first semester to reach $17.1 billion from $16.6 billion in the same six months last year, thanks partly to recovering economies of some countries that host these expatriates.

According to the Bangko Sentral ng Pilipinas (BSP), inflows in June alone grew by 4.4 percent to $3.1 billion from $2.9 billion in the same month of 2021.

The BSP said there were increases in receipts from both land-based Filipinos with contracts of more than a year (4.8 percent) as well as those from land-based and sea-based with contracts of less than a year (2.6 percent).

Of these inflows, cash remittances sent to the Philippines through banks increased by 4.4 percent to reach $2.8 billion on June from $2.6 billion in the same month of 2021.

Six-month high

June data brought the total for the first semester to $15.3 billion, an increase of 2.9 percent from $14.9 billion in January-June 2021.

A significant portion of receipts was sent from the United States, Saudi Arabia, Japan, Qatar and Singapore.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said cash remittances logged a new six-month high in June.

Ricafort said higher inflows were prompted partly by high prices of basic goods and services, and enabled by the further re-opening of economies where OFWs work.

Negated by high prices

He said that while the strong US dollar has brought in more pesos for recipients of remittances, whatever gains OFWs and their dependents may have been negated by higher prices.

The peso has been trading at more than 55:$1 since June, but inflation has also risen every month since February and pegged at 6.1 percent in June.

“Thus, there may still be a need to send more OFW remittances due to higher prices and inflation,” Ricafort said.

Going forward, the risk of recession in the United States, which is the world’s largest economy, could potentially reduce jobs/employment prospects for OFWs and could also potentially slow down OFW remittances in the coming months.

Also, Ricafort said that for the entire first semester, growth was slower this year at 2.9 percent compared to the 6.4 percent recorded in the same period last year.

Still, he said the prospects for global economic recovery have somewhat improved as many countries around the world also further re-opened their economies toward greater normalcy, thereby helping improve employment prospects for many OFWs. INQ