Growth in remittances slowing down

The amount of dollars sent home by expatriate Filipinos rose further in the first eight months of the year, but data from the Bangko Sentral ng Pilipinas also showed a worrisome trend of tapering growth in recent months for remittances, a key leg of the country’s economy.

In a statement, BSP Deputy Govenor Cyd Tuaño-Amador said personal remittances from overseas Filipinos increased by 2.4 percent year-on-year to $21.2 billion in the first eight months of 2018.

The central bank’s data showed that the monthly rise in the cumulative amounts of remittances this year had been moderating, compared to monthly data for the same periods last year—a phenomenon which the central bank has not yet commented on.

Personal remittances from land-based workers with work contracts of one year or more grew by 2.1 percent to $16.3 billion, while transfers from sea-based workers and land-based workers with short-term contracts expanded by 3.8 percent to $4.4 billion.

Personal remittances represent the sum of net compensation of employees, personal transfers and capital transfers between households.

For January to August 2018, cash remittances—narrower data which cover only those funds remitted through the formal banking system—from overseas Filipinos recorded a 2.5-percent growth from the same period a year ago to reach $19.1 billion.

Cash remittances sent by land-based workers rose by 2.1 percent to $15.1 billion and transfers from sea-based workers grew by 3.8 percent to $4 billion.

However, personal remittances for August 2018 were 1.4-percent lower than the level posted in August 2017.

August 2018 data also showed cash remittances posting a 0.9-percent decrease year-on-year to $2.5 billion. The countries that contributed to the decline in August 2018 are the United Arab Emirates (UAE), Saudi Arabia and Qatar.

By country source, more than 79 percent of the total cash remittances from January to August 2018 came from the United States, Saudi Arabia, UAE, Singapore, Japan, United Kingdom, Qatar, Canada, Germany and Hong Kong.

According to the central bank, net compensation refers to gross earnings of overseas Filipino workers with work contracts of less than a year, including all sea-based workers, less taxes, social contributions, and transportation and travel expenditures in their host countries.

Personal transfers refer to all current transfers in cash or in kind by overseas Filipino workers with work contracts of one year or more as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines.

Capital transfers between households refer to the provision of resources for capital purposes such as for the construction of residential houses, between resident and nonresident households without anything of economic value being supplied in return.