Dollar remittances up 3.6% in 2022 on Dec surge

Personal remittances from overseas Filipinos reached $3.49 billion in December last year, rising by 5.7 percent as more people sent money back home to cope with the increased holiday spending and inflation pressures.

Data from the Bangko Sentral ng Pilipinas (BSP) released on Wednesday said personal remittances were higher in December compared to the $3.30 billion recorded in the same month in 2021.

The December posting is also the highest during the year, exceeding the $3.24 billion recorded in July.

The BSP attributed the increase to higher remittances sent by land-based workers with work contracts of one year or more, as well as from sea- and land-based workers with work contracts of less than one year.

The December posting puts the full year personal remittances figure to $36.14 billion, which is 3.6 percent higher than the $34.88 billion remittance flows in 2021.

Of the personal remittances from overseas Filipinos, cash transfers coursed through banks reached $3.16 billion, which is 5.8 percent higher compared to the $2.99 billion in the same month in 2021.

“The expansion in cash remittances in December 2022 was due to the growth in receipts from land- and sea-based workers,” the BSP said.

This puts the year-to-date figure to $32.54 billion, higher by 3.6 percent compared with the $31.42 billion recorded in 2021.

The growth in cash remittances from the United States, Saudi Arabia, Singapore, Qatar, and United Kingdom contributed largely to the increase in remittances during the year, according to the BSP.

The majority, or 41 percent of the total remittances came from the US, followed by Singapore at 7 percent and Saudi Arabia at 6 percent.

Other countries cited as major sources of remittances include Japan (5.1 percent), United Kingdom (4.7 percent), United Arab Emirates (4.2 percent),and Canada (3.6 percent).

Rizal Commercial Banking Corp chief economist Michael L. Ricafort cited revenge spending and inflation as the two main drivers of the increase during the month of December.

“Increased holiday spending in December, with no more COVID restrictions compared to one to two years ago, in terms of more spending by consumers on shopping, eating out, travel, other essentials and non-essentials, among other business, economic activities fundamentally led to more OFW (overseas Filipino worker) remittances sent to the country,” he said.

“The sending of more OFW remittances is also needed to cope up with higher inflation locally, but offset by the fact that similarly higher prices and inflation also in host countries of OFWs could have also increased the cost of living of OFWs abroad,” Ricafort said further.

Still, the RCBC executive said the risk of recession in the US, which is the world’s largest economy, could slow down remittances as global trade and other economic activities become more sluggish in the foreseeable future.