The Bangko Sentral ng Pilipinas (BSP) said bank-transferred remittances from overseas Filipinos as of end-October reached $24.633 billion, down 0.9 percent year-on-year form $24.858 billion.
The BSP said the “cumulative contraction” in remittances has narrowed from the previous 1.4 percent in September. For 2020, the central bank has predicted that remittances will contract by two percent and then resume its four-percent a year growth in 2021 until 2022.
For the month of October only, cash remittances increased by 2.9 percent year-on-year to $2.747 billion from $2.671 billion. “This increase was due to the growth in remittances from both land-based ($2.186 billion) and sea-based ($561.2 million) workers by 3.3 percent and 1.2 percent, respectively,” said the BSP.
For the 10-month period, the biggest source of cash remittances are the US with 40.2 percent of the total, followed by Singapore, Saudi Arabia, Japan, the United Kingdom (UK), the United Arab Emirates (UAE), Canada, Hong Kong, Qatar, and Taiwan. The BSP said 78.7 percent of the total cash remittances are from these nine nations.
Remittances from Saudi Arabia, Japan, UK, UAE, Germany, and Kuwait declined, while cash transfers from the US, Singapore, Qatar, Oman, Hong Kong and Taiwan increased.
As for personal remittances, these also improved to just a one percent contraction from 1.4 percent contraction in September. Personal remittances are personal and capital transfers between households.
As of end-October, personal remittances amounted to $27.346 billion from $27.612 same time in 2019, down by one percent. For October only, it went up by 2.5 percent year-on-year to $3.044 billion from $2.969 billion in October last year.
The BSP noted a 3.3 percent increase in remittances from land-based workers with work contracts of one year or more to $2.374 billion in October from $2.298 billion last year.
Remittances from sea-based workers and land-based workers with work contracts of less than one year rose to 1.2 percent to $612 million in October from $605 million in 2019.
Based on the latest Consumer Expectations Survey (CES), the BSP said the number of households with an overseas Filipino member that utilizes their remittances for the purchase of food and other household items has declined in the fourth quarter this year.
About 96.6 percent of the 353 OFW (overseas Filipino Worker) households surveyed -- compared to 97.2 percent in the third quarter --- used remittances to buy food and other household needs.
“The percentage of OFW households that apportioned their remittances for medical expenses (53.8 percent), savings (33.4 percent), purchases of consumer durables (19.3 percent) and motor vehicles (6.2 percent) were higher compared with the third quarter 2020 survey results,” said the BSP.
“However, the proportion of OFW households that allotted part of their remittances for debt payments (15.9 percent), investments (6.2 percent) and purchase of houses (4.8 percent) declined, while unchanged for education (at 60.1 percent) when compared with the third quarter survey results,” it added.
The CES is a quarterly BSP survey based on three component indicators --economic condition, family financial situation, and family income.
The CES showed that consumer sentiment has turned less pessimistic for the last quarter of this year and optimistic for the next 12 months from their expectations of the following: availability of more jobs and permanent employment; additional and high income; effective government policies and programs such as the Social Amelioration Program (SAP) and the Plant, Plant, Plant Program; and less community restrictions, reopening of businesses and end to COVID-19 pandemic.