Cash remittances dip 1.7% in January – BSP

Published March 15, 2021, 12:43 PM

by Lee C. Chipongian

Bank-transferred remittances for the first month of 2021 was down to $2.603 billion or 1.7 percent lower from same period last year of $2.648 billion.

The January cash remittances was also lower compared to December 2020’s $2.890 billion or by 9.9 percent, based on Bangko Sentral ng Pilipinas (BSP) data.

(Ali Vicoy/Manila Bulletin)

The BSP said Monday that cash remittances from land-based workers fell by 2.4 percent to $2.044 billion while sea-based workers’ fund transfers of $558 million was up a bit by one percent year-on-year.

The US still has the biggest share of total remittances at 40.9 percent, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, Canada, United Arab Emirates, Qatar, Malaysia, and Taiwan. The US is top of the list because correspondent banks used by remittance centers are in the US and since remittances via money couriers cannot be disaggregated by actual country source, it is reported as coming from where main offices are located which in many cases is in the US, explained the BSP.

“The combined remittances from these countries accounted for 78.2 percent of total cash remittances during the period,” said the BSP.

The BSP also report personal remittances which are personal transfers or household-to-household transfer as well as capital transfers between households.

For the month of January, personal remittances dropped by 1.7 percent to $2.895 from $2.944 billion same time in 2020. Compared to December 2020’s $3.205 billion, it also fell by 9.7 percent month-on-month.

According to the BSP, the “marginal decline in personal remittances during the month was attributed to the 2.4 percent drop in remittances from land-based workers with work contracts of one year or more to $2.219 billion from $2.274 billion recorded in January 2020.”

Personal remittances from sea-based workers and land-based workers with work contracts of less than one year increased by one percent to $609 million from $603 million last year, added the BSP.

At the end of 2020, cash remittances dipped by 0.8 percent year-on-year which was better than what the BSP predicted was a two percent contraction due to the impact of the global COVID-19 pandemic. The BSP even projected as much as five percent remittances contraction in 2020 when the lockdown periods were in its strictest phase and overseas Filipinos came home by the thousands last year, estimated at more 300,000 returing OFWs.

Last year, bank-channeled remittances amounted to $29.903 billion from $30.133 billion in 2019. Personal remittances also fell by 0.8 percent to $33.194 billion from $33.467 billion in 2019.

Remittances accounted for 9.2 percent of the gross domestic product and 8.5 percent of the gross national income in 2020. For this year, the BSP expects remittances to resume its four percent growth annually with the resumption of global economic activities as countries – particularly advanced economies where OFWs are located – have started to roll out the COVID-19 vaccines.