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MANILA, Philippines —Cash remittances posted their lowest inflows in six months in November 2023 as geopolitical turmoil in the Middle East and a stronger peso likely discouraged Filipinos abroad from sending money back home.
Data released on Monday by the Bangko Sentral ng Pilipinas (BSP) showed cash remittances coursed through banks grew 2.8 percent year-on-year in November to $2.7 billion, the lowest since May 2023.
Figures showed the November inflow was weaker than the 5.7 percent growth recorded in the same month in 2022. It was also slower than the 3 percent expansion in October last year despite the demand rush brought by the holiday season, when remittances were typically high.
READ: OFW remittances growth slowing
In the first 11 months, remittances grew 2.8 percent year-on-year to $30.2 billion, still short of the BSP’s projection of a 3-percent growth for 2023.
Sluggish growth
Sought for comment, Domini Velasquez, chief economist at China Banking Corp., attributed the sluggish growth to reduced inflows from the United States—a major source of remittances—and escalating tensions in the Middle East.
READ: Slow, steady remittance growth seen until 2025
The lower dollar-peso exchange rate in the latter part of November might have also dissuaded Filipino migrants from sending money to their families at home, she added.
“On a positive note, remittances from Europe, particularly from the United Kingdom saw a surge in November as its economy showed a subtle rebound coming from a previous decline,” Velasquez said.
READ: Hike in OFW remittances hit six-month high in October
“Looking ahead, we anticipate a decent growth in remittances, driven by the sustained demand for Filipino labor. Wage increases in Hong Kong and Taiwan in 2024 will also contribute to the growth of remittances,” she added.
Resilient by nature
That inflows still grew in November despite a stronger peso, which can lower the value of money sent home by Filipinos overseas, showed how resilient remittances are, said Jeremaiah Opiniano, executive director at Institute for Migration and Development Issues.
“It’s no surprise that end-2023 remittance figures will become another historic high for the Philippines. But the November 2023 cash remittance flow shows that Filipinos abroad have regained their financial bearings already, not minding even the appreciation of the peso,” Opiniano said. INQ