January-July OFW remittances up by 2.9% to $20.91B
MANILA -Personal remittances from overseas Filipino workers (OFWs) grew by 2.5 percent to $3.32 billion in July from $3.24 billion in the same month last year, according to the Bangko Sentral ng Pilipinas (BSP).
The BSP attributed the results in July to sustained increases in inbound money transfers from both land-based and sea-based overseas workers.
The growth of inflows in July was faster than the 2.3 percent observed in the same month of 2022 as well as the 2.2 percent recorded a month earlier.
The latest monthly readout brought the total inflows for the first seven months of this year to $20.91 billion or 2.9 percent higher than the $20.33 billion for January-July 2022.
Seven-month growth this year was faster than the 2.7 percent recorded for the same period of 2022.
Of total remittances received in July, transfers coursed through banks increased by 2.6 percent to $2.99 billion from $2.92 billion.
The United States had the highest share of Philippine-bound cash remittances, followed by Singapore, Saudi Arabia and Japan.
For the seven-month tally, inbound cash transfers increased by 2.9 percent to $18.79 billion from $18.26 billion.
The BSP expects that full-year cash remittances will grow by 3 percent from $36.1 billion last year, which would bring it to $37.2 billion this year.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said monthly remittances in July were already the second highest on record after the $3.159-billion inflows recorded in December 2022.
“The unusually higher OFW remittances in July 2023, the second highest since records started, may be largely attributed to some tuition payments and other related spending in preparation for the start of the new school year, as these education-related spending are considered compulsory in nature for many OFW families,” Ricafort said.
“This could be partly attested by the intraday low (exchange rate) of P54.30 to a US dollar posted on July 17, 2023,” he said, adding that the greenback was now trading for more pesos at about 56.80:$1.
Ricafort noted that since the pandemic, the yearly growth rate of OFW remittances was averaging at 2 percent to 3 percent.
“The continued and consistent growth in OFW remittances could be attributed to higher prices [of goods and services] that required the sending of more [money to the Philippines],” he said.
Further, the economist said the burden of inflation was being offset by the weaker peso, which benefits OFWs and their dependents, just like those who earn US dollars or foreign currencies such as exporters, business process outsourcing firms, and foreign tourists visiting the country.