Remittances continue to rise

Foreign currency remittances of expatriate Filipinos continued to rise in November of last year as both short- and long-term overseas workers sent more money home to their local beneficiaries, the Bangko Sentral ng Pilipinas said Monday.

In a statement, BSP Governor Nestor Espenilla Jr. said that remittances for the month of November alone reached $2.5 billion, a 3.2-percent increase over the level reported in the same period of 2016.

This brought the cumulative remittances for the first 11 months of 2017 to $28.2 billion, a growth rate of 5.1 percent from the previous year.

“The growth in remittances for January to November 2017 was supported by the sustained expansion of remittances from land-based overseas Filipinos with work contracts of one year or more as well as those from sea- and land-based overseas Filipinos with work contracts of less than one year,” Espenilla said.

Remittances from short-term Filipino expatriate workers rose by 3.7 percent, while those from those with longer-term contracts, whether land- or sea-based, increased by 5.1 percent.

Likewise, cash remittances courses through banks rose by 2 percent during the month of November to $2.3 billion.

The top countries that contributed to the growth in cash remittances during the month were the United States (1.1-percentage point contribution), and Germany (0.9 percentage point).

On a year-to-date basis, cash remittances at the end of November 2017 totaled $25.3 billion. This represented a 4-percent increase from the 2016 level.

Cash remittances from both land- and sea-based workers recorded increments of 3.7 percent and 5.1 percent for the January to November 2017 period, respectively.

According to the BSP, the bulk of cash remittances for the first 11 months of the year came from the United States, the United Arab Emirates, Saudi Arabia, Singapore, Japan, the United Kingdom, Qatar, Kuwait, Germany and Hong Kong.

Combined remittances from these countries accounted for 80.2 percent of total foreign currencies sent back by overseas Filipinos to their local beneficiaries.

Earlier, the World Bank said it expected remittance flows to the Philippines hitting nearly $33 billion for the whole of 2017 due to the global economic recovery.

“Remittances to the Philippines continue to remain resilient despite the political uncertainties in the Middle East, and are expected to grow by 5.3 percent in 2017, slightly higher than the estimated 4.5-percent increase in 2016,” the Washington-based multilateral lender said in its migration and development brief report released on Oct. 3.

The Philippines was poised to be the third-biggest remittance-receiving country in 2017 with $32.8 billion, after India’s $65.4 billion and China’s $62.9 billion, the World Bank’s latest estimates showed. Worldwide, “remittances to low- and middle-income countries are on course to recover in 2017 after two consecutive years of decline,” the World Bank said in a statement.

“Officially recorded remittances to developing countries are expected to grow by 4.8 percent to $450 billion for 2017. Global remittances, which include flows to high-income countries, are projected to grow by 3.9 percent to $596 billion,” the World Bank added.

According to the World Bank, “the recovery in remittance flows is driven by relatively stronger growth in the European Union, Russian Federation and the United States.”

However, remittances to East and South Asia might be dampened by “fiscal tightening, due to low oil prices, and policies discouraging recruitment of foreign workers” in oil-producing gulf cooperation council countries, according to the World Bank.

In 2016, cash sent home by overseas Filipinos through banks reached a record-high $26.9 billion, 5-percent higher than 2015’s $25.6 billion.

Remittances are the country’s biggest source of foreign exchange income, insulating the domestic economy from external shocks by ensuring the steady supply of dollars into the system. Also, these cash transfers are a major driver for domestic consumption, hence contributing to strong economic growth.