Overseas Filipinos’ cash remittances reached $18.785 billion during the January to July period, up by 2.9 percent from same period last year of $18.264 billion, according to a central bank report released on Friday, Sept. 15.

The same Bangko Sentral ng Pilipinas (BSP) data showed that compared to end-June this year, cash remittances sent through the formal banking system went up by 18.94 percent from $15.793 billion.

The year-on-year growth of 2.9 percent is the same growth reported at the end of the first six months 2023, signifying a steady amount of US dollars being sent by Overseas Filipinos (formerly called Overseas Filipino Workers or OFWs) to their supported households in the Philippines.

For the first seven months, the BSP said most of the cash remittances or 41.3 percent came from Filipinos based in the US. The rest or 6.9 percent were remitted from Singapore, 5.9 percent from Saudi Arabia, five percent from Japan and 4.8 percent from the United Kingdom.

The BSP reiterated that since there are limitations on the remittance data by source, the US usually emerges as a top source of remittances because most correspondent banks used by remittance centers are based in the US.

For the month of July alone, cash remittances totaled $2.992 million, up 2.6 percent from same month last year of $2.917 billion.  

The expansion in cash remittances was due to the growth in receipts from land- and sea-based workers. In just July, land-based workers remitted $2.43 billion, up 2.7 percent year-on-year while sea-based workers sent home $560 million which was 1.9 percent higher from the previous year.

On a year-to-date basis, land-based workers remitted $14.98 billion, up 3.1 percent year-on-year. Sea-based workers also transferred $3.81 billion, up two percent year-on-year.

The BSP records both cash remittances and personal remittances. Cash remittances are the basis for BSP’s projection of a three percent growth in remittances for 2023.

As of end-July, personal remittances reached $20.911 billion, it was 2.9 percent higher than same period in 2022 of $20.236 billion.

Personal remittances are computed as the sum of an Overseas Filipino’s net compensation and includes personal transfers and capital transfers between households. These are not captured by the banking system.

For the month of July alone, personal remittances rose 2.5 percent to $3.321 billion from $3.240 billion in the same month last year.

Based on BSP data, workers with contracts of one year or more transferred $2.63 billion as personal remittances, up 2.6 percent year-on-year. As for workers with contracts of less than one year, they sent home $620 million which was 2.3 percent higher from last year.

On a year-to-date basis, workers with a longer contract remitted $16.24 billion, up three percent year-on-year. Meanwhile, workers with a shorter contract remitted $4.17 billion, up 2.4 percent year-on-year.

Based on the July Consumer Expectations Survey (CES) of the BSP, it noted that remittances are still mainly used for food and other household needs, education, and medical expenses when considering the numbers as of the second quarter this year.

In the CES survey, which was conducted in June 2023, the 95.6 percent of the 367 surveyed OFW households spent their remitted money on food and other household needs, while 60.8 percent use it to pay for their children’s education. Another 50.1 percent said they used remittances for medical expenses and only 34.9 percent said it went to the family savings.