FILE PHOTO: An employee at a money exchange shop on A. Mabini Street in Manila accepts a hundred-dollar bill from a customer so it can be converted into pesos. (Photo by LYN RILLON / Philippine Daily Inquirer)
Money sent home by Filipinos abroad posted the slowest growth in five months last January as the seasonal spike in inflows brought by the Christmas rush started to wane.
Data released on Friday by the Bangko Sentral ng Pilipinas (BSP) showed cash remittances coursed through banks amounted to $2.84 billion in the first month of 2024, up at an annualized rate of 2.7 percent.
This was the slowest growth in remittances since September last year, when inflows grew by 2.6 percent year-on-year. The latest reading was also lower than the 3.5-percent increase in transfers recorded in the same month of 2023.
The softer uptick in remittances came just as the shopping spree typically seen during the Christmas season started to subside.
Historically, Filipino migrants make bigger transfers during the holidays so their families have enough cash for yuletide spending.
Remittance growth “seasonally eased upon crossing the new year in January, [a] consistent pattern seen for many decades,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp.
Not severe
“Further reopening of the economy towards greater normalcy also led to increased spending, with some pent-up demand or even some revenge spending by OFW dependents locally,” Ricafort added.
But the slowdown was not severe after a slight depreciation of the local currency likely boosted remittances, which had bigger value when converted to peso. Data showed the peso went down 1.64 percent year-to-date against the US dollar by the end of January.
Further, money sent home by land-based workers grew 3.1 percent year-on-year to $2.25 billion. Meanwhile, sea-based workers transferred $580 million in cash to their families here, up by 1.1 percent.
The BSP said growth in cash remittances from the United States, Saudi Arabia, the United Arab Emirates and Singapore contributed mainly to the increase of total inflows in January.
In terms of country of origin, the US had the highest share of overall remittances during the month at 41.8 percent, followed by Singapore (7.3 percent) and Saudi Arabia (6 percent)
The BSP projects remittances to grow by 3 percent in 2024 and 2025 which, if realized, would be flattish compared to the 2.9-percent increase seen in 2023. INQ