Growth in remittances slowed in Q1 to $8.6B

Personal remittances from overseas-based Filipinos received in the first quarter grew slower by 2.3 percent year-on-year to reach $8.6 billion from $8.5 billion in the same period last year.

Still, preliminary data at the Bangko Sentral ng Pilipinas (BSP) also show that the first-quarter increase this year was faster than in the same period of 2020 at the onset of the COVID-19 pandemic, when inflows grew by 1.5 percent at $8.2 billion.

Also, monthly inflows grew faster for the first time in three months at 3.1 percent year-on-year in March, with $2.9 billion against $2.8 billion in the same month of 2021.

Year-on-year growth of remittances had progressively lost momentum from 4.8 percent in November to 2.9 percent in December, 2.6 percent in January and 1.2 percent in February.

Land-based workers

BSP data show that three-quarters or $2.2 billion of remittances in March were sent by land-based workers with work contracts of at least one year, increasing by 3.7 percent.

Workers with contracts of one year or less, both on land and at sea, sent in $625 million —an increase of 1.4 percent from $616 million.

Of the amount received in March, about nine-tenths or $2.6 billion accounted for cash funds transferred through the banking system. This meant an increase of 3.2 percent from $2.5 billion in March 2021.

The growth of such cash remittances slowed to 3.2 percent year-on-year from 4.9 percent in March 2021.

For the first quarter, the growth rate of cash remittances eased to 2.4 percent ($7.8 billion) from 2.6 percent last year ($7.6 billion).

United States

In March, the United States accounted for 42 percent of cash remittances received. Other top sources were Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar and Malaysia.

Also in March, BSP Governor Benjamin Diokno said the growth in personal remittances was expected to stabilize at 4 percent this year as well as in 2023.

This is the expectation after inflows increased by 5.1 percent to a record high of $34.88 billion in 2021, following an 0.8-percent contraction in 2020.

On Monday, ING Bank senior Philippines economist Nicholas Mapa said growth in this key support for the Philippine peso and for consumption-based growth was expected to be “steady but not likely to accelerate in coming months.”

Mapa said the widening of the Philippines’ trade deficit would likely overtake growth in remittance flows.