Remittances sent home by Filipinos working abroad grew by 3.5 percent to $3.07 billion in January from $2.97 billion in the same month last year, according to the Bangko Sentral ng Pilipinas (BSP).
This was the slowest growth rate in three months or since the 3.5 percent posted in October 2022, according to preliminary BSP data.
However, the latest readout was faster than the 2.5-percent growth recorded in January 2022.
Of the amount received in January, 90 percent represents cash that overseas Filipino workers (OFW) sent through banks.
This amounted to $2.76 billion, an increase of 3.5 percent from $2.67 billion in the same month last year.
Similarly, the latest print was better than the 2.5-percent growth recorded in January 2022.
The BSP said banks registered in the United States accounted for the highest share of Philippines-bound remittances, followed by those in Singapore, Japan and Saudi Arabia.
Good signal
“The expansion in cash remittances in January 2023 was due to the growth in receipts from land- and sea-based workers,” the BSP said in a statement.
Inflows from land-based workers rose by 4 percent to $2.19 billion from $2.1 billion.
Also, inflows from sea-based workers increased by 1.8 percent to $580 million from $570 million.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the faster growth of cash remittances in January was a good signal for the Philippine economy.
Ricafort also said the latest monthly intake was still near the record high of $3.159 billion posted in the previous month, December 2022.
Over the past three years amid the COVID-19 pandemic, monthly cash remittances went as low as $2.05 billion in April 2020.
In 2022 alone, the lowest monthly intake was recorded at $2.4 billion in April.
Exchange rate
The economist added that while the exchange rate between the Philippines peso and the US dollar has “corrected downward” to 54.80:$1 to 55.00:$1 in January from a record high of 59.00:$1 in September to October last year, the greenback was still commanding more pesos compared to January last year.
Peso climb ends, skids to record low 59:$1
In January 2022, the peso was trading at 50:$1 to 51:$1.
This “somewhat still encouraged the sending and conversion of more OFW remittances to pesos even after the holiday season,” Ricafort said.
He said that at current monthly intakes, OFW remittances are considered a bright spot for the Philippine economy in terms of spurring consumer spending, which accounts for at least three-fourths of the economy.
“The continued year-on-year growth in OFW remittances may be attributed to the relatively higher prices [of goods and services] that may have required the sending of more remittances to cope up with higher prices of goods and services for dependents in the Philippines,” he added.
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