Remittances soar to record-high
MANILA, Philippines —Money sent home by Filipinos abroad hit a record-high in 2023, thanks to a stronger peso that bloated the value of remittances which, in turn, helped households stay afloat amid stubbornly high inflation last year.
Cash remittances coursed through banks amounted to $33.5 billion, up an annualized rate of 2.9 percent, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.
The 2023 inflows were the highest on record or since the BSP started tracking cash remittances in 1970. At the same time, last year’s remittance growth was consistent with the central bank’s projection of a 3-percent expansion for 2023, albeit slower than the 3.6-percent uptick in 2022.
In December 2023 alone, cash remittances grew 3.8 percent to $3.3 billion, the fastest growth in a year amid the seasonal spike during the Christmas shopping season.
Peso appreciation
Nicholas Mapa, senior economist at ING Bank in Manila, said the peso’s strength against the US dollar propped up the value of money sent home by Filipino migrants, who are also likely enjoying better job prospects in their host countries as the global economy recovered from the pandemic’s onslaught.
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Article continues after this advertisement“Remittance flows continue to grow at a very robust and consistent, roughly 3-percent pace, helped along by the steady deployment of workers and sustained expansion of host countries,” Mapa said.
Article continues after this advertisement“The slight pickup in dollar remittances may be tied to exchange rate nuances with the dollar fetching less pesos late last year,” he added.
Data showed higher inflows from the US, Saudi Arabia and United Arab Emirates contributed to the huge amount in 2023. Among these countries, the US was the largest source, cornering 40.9 percent of the total.
Jeremaiah Opiniano, executive director at Institute for Migration and Development Issues, said rising costs of living at home might have prompted Filipinos abroad to send more money to their families. This, as expats themselves also grappled with high inflation in their host countries.
Healthy inflows
“Inflation may have also been felt in other countries, so you wonder if overseas Filipinos are again doing sacrifices for the sake of their families,” Opiniano said.
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“Note that those abroad have felt the impact of the pandemic on themselves and their families, and they may be trying to recoup lost incomes,” he added.
This year, the BSP projects growth in cash remittances to stay at 3 percent.
“We can expect the same robust pace of growth for remittances again this year as it delivers a healthy dose of foreign inflows while also supporting consumption via peso purchasing power,” ING Bank’s Mapa said.
