The Bangko Sentral ng Pilipinas (BSP) said the six-month cash remittances sent by overseas Filipinos dropped by 4.2 percent year-on-year to $14.019 billion from $14.638 billion.
The BSP noted Monday that the decline in cash remittances as of end-June was lower than the 6.4 percent recorded as of end-May.
“This is due to the 7.6 percent growth of personal remittances from overseas Filipinos in June 2020, which grew to $2.737 billion, up from $2.545 billion in June 2019,” said the BSP, adding that this trend is “a reversal from three consecutive months of decline from their comparable levels last year.”
Cash remittances are fund transfers that entered the banking system while personal remittances are current and capital cash transfers that are transacted household-to-household between Filipinos abroad and their families here.
Personal remittances from land-based workers with work contracts of one year or more went up by 14.2 percent in June to $2.164 billion from $1.896 billion same time in 2019. Fund transfers from sea-based workers, in the meantime, decreased by 13.1 percent to $515 million from $593 million.
From January to June, personal remittances was lower by 4.2 percent year-on-year at $15.573 billion versus $16.252 billion same period in 2019.
As for cash remittances, for the month of June this amounted to $2.465 billion, up 7.7 percent compared to $2.290 billion in June 2019.
The BSP said the increase in cash remittances in June was supported mainly by land-based workers while sea-based remittances was still down. “The continued drop in sea-based workers’ remittances was due to the repatriation of many sea-based workers amid the ongoing COVID-19 pandemic,” said the BSP.
For the January to June period, cash remittances from land-based workers declined by four percent to $10.959 billion from $11.411 billion, while sea-based workers’ cash remittances dropped by 5.2 percent to $3.060 billion from $3.28 billion.
The BSP said remittances from the US, Japan, Singapore, Oman and Taiwan continue to post growth, while remittances from Saudi Arabia, United Arab Emirates, Kuwait, Germany and the United Kingdom have declined.
Remittances from the US accounted for 39.7 percent for the first six months, mainly because remittance centers have correspondent banks in the US and as explained by the BSP, “the US would appear to be the main source of overseas Filipinos remittances because banks attribute the origin of funds to the most immediate source.”Other sources or remittances are Singapore, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Canada, Hongkong, Qatar, and Taiwan. “The combined remittances from these countries accounted for 78.9 percent of total cash remittances,” said the BSP.
The government expects overseas Filipinos’ remittances to decline by five percent this year because of the pandemic, but are projected to “return to the normal annual growth rate” of four percent next year and in 2022.