By Lee C. Chipongian
Cash remittances sent home by overseas Filipinos amounted to $22.187 billion as of end-September, up 4.2 percent year-on-year from $21.294 billion, the Bangko Sentral ng Pilipinas (BSP) reported Friday.
Cash remittances are funds transferred via the formal banking system which makes it easier for the BSP to monitor.
For the month of September only, bank-chanelled remittances totaled $2.379 billion, 6.3 percent higher from same period last year of $2.237 billion.
The BSP said remittances of workers with work contracts of less than one year contributed bulk of the monthly cash transfers. By type of worker, cash remittances from land-based and sea-based workers increased by 3.2 percent to $17.3 billion and eight percent to $4.9 billion, respectively.
The US, home to majority of correspondent banks used by remittance companies, naturally account for 37.5 percent of the total by country source of cash remittances.
Other major sources of cash remittances are Saudi Arabia, Singapore, United Arab Emirates, Japan, the United Kingdom, Canada, Hong Kong, Germany and Kuwait. “The combined remittances from these countries accounted for 78.3 percent of total cash remittances during the period,” said the BSP.
The BSP since 2012 report overseas Filipinos’ personal remittances. As of end-September, this grew by 3.9 percent from same time in 2018 of $23.713 billion.
Personal remittances is the sum of the net compensation of employees such as the gross earnings of overseas Filipinos. It also includes personal transfers in cash or in kind and “other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines” as well as capital transfers between households.
Personal remittances for September only reached $2.648 billion, up 6.3 percent year-on-year from $2.490 billion.
According to the BSP, the “growth in personal remittances during the nine-month period was driven by steady remittance inflows from land-based overseas Filipino workers with work contracts of one year or more.” This increased to $18.8 billion from $18.2 billion in 2018.
Remittance inflows from sea-based workers and land-based workers with short-term contracts amounted to $5.3 billion this year, higher than the previous $4.9 billion.
The BSP expects cash remittances to grow by three percent this year. In 2018, total cash remittances reached $28.943 billion, up 3.1 percent from what was reported in 2017 of $28.060 billion.
Before 2015, remittances were growing by an average five percent per year. In 2013, it was up by 7.4 percent. The yearly OFW remittances growth started to slow down in 2015 and by 2017, it was at the three percent level. The BSP blamed protectionist policies and geopolitical tensions as dragging down remittances in past years.