Bank-transferred cash remittances reached $25.93 billion as of end October, up by 5.3 percent from same period last year of $24.63 billion, based on Bangko Sentral ng Pilipinas (BSP) data.
For the month of October alone, remittances sent home by Overseas Filipinos (OFs), formerly referred to as Overseas Filipino Workers (OFWs), increased by 2.4 percent to $2.81 billion from $2.75 billion same time in 2020.
The BSP said that cash remittances increased because of a 2.8 percent expansion in the fund transfers of land-based workers which amounted to $2.25 billion. Sea-based workers’ remittances, in the meantime, slightly increased by 0.6 percent to $565 million.
“The growth in cash remittances from the US, Taiwan, and Malaysia contributed largely to the increase in remittances in January-October 2021,” noted the BSP. By country source, the US continue to post the highest share of overall remittances at 40.9 percent followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar, and South Korea. The US will naturally show up as a top source of remittances since most correspondent banks used by remittance centers are located in the US.
“The combined remittances from these top ten countries accounted for 79 percent of total cash remittances during the period,” said the BSP.
The personal remittances side of OFs’ fund transfers, on the other hand, grew by 2.4 percent in October only to $3.12 billion versus $3.04 billion same time in 2020.
For the 10-month tally, personal remittances totalled $28.82 billion, up by 5.4 percent year-on-year or from $27.35 billion.
Land-based workers with work contracts of one year or more remitted $2.44 billion in October, up by 2.8 percent from $2.37 billion. Remittances of sea- and land-based workers with work contracts of less than one year slightly increased by 0.5 percent to $615 million from $612 million.
During the Monetary Board of the BSP’s Dec. 9 meeting where external sector outlook was revised, the BSP retained the six percent 2021 cash remittances growth forecast. The BSP noted that there is “consistent (and) sustained recovery of OF remittances”.
“Lending support to the outlook are expectations of rising demand for foreign workers as the global economy recovers; increasing use of online remittance facilities; and lingering altruistic motives by Filipinos abroad,” said the BSP last week when it announced revisions to the balance of payments numbers.
For 2022, cash remittances are expected to stabilize at four percent.
“The projected improvements in global growth prospects and further opening of economies along with the continued mass use of vaccines to prevent the spread of COVID-19 are also expected to continue to lend support to the growth prospects for OF remittances,” said the BSP.
While cash remittances are easily captured by the BSP, personal remittances are, however, OFs’ personal transfers as well as capital transfers between households.