Cash remittances coursed through the banking system rose to an all-time high of $33.491 billion in 2023 amid increased demand for foreign workers in other countries, according to the Bangko Sentral ng Pilipinas (BSP).
The bank-transferred remittances also grew 2.9 percent from $32.529 billion in 2022. It fell short of the BSP's projected three percent growth for 2023.
The BSP on Thursday, Feb. 15, described inward remittances as “robust” in 2023 following the “rise in the deployment” of overseas Filipinos, also known as Overseas Filipino Workers (OFWs) “due to the continuous increase in demand for foreign workers in host countries.”
For the month of December, cash remittances grew 3.8 percent year-on-year to $3.280 billion from $3.159 billion in 2022.
The BSP said the growth in cash remittances “was primarily due to increased receipts from both land- and sea-based workers.”
From January to December 2023, cash remittances by land-based workers totaled $26.6 billion, up 3.2 percent from $25.8 billion in 2022. Sea-based workers also transferred $6.9 billion, up two percent from $6.7 billion.
Meanwhile, the BSP reported that personal remittances which are transfers in cash or in kind via households also reached a record $37.210 billion last year, up three percent from $36.136 billion. For December only, personal remittances increased by 3.9 percent to $3.625 billion from $3.487 billion.
Personal remittances are computed as the sum of an overseas Filipino’s net compensation and includes personal transfers and capital transfers between households. Last year, this was equivalent to 8.5 percent of the country’s gross domestic product and and 7.7 percent of gross national income.
Personal remittances are from land-based workers with work contracts of one year or more, and sea- and land-based workers with work contracts of less than one year.
From January to December 2023, the central bank said land-based workers with work contracts of one year or more transferred personal remittances of $28.9 billion, up 3.1 percent from $28 billion. Sea- and land-based workers with work contracts of less than one year sent home $7.5 billion, up 2.4 percent from $7.3 billion.
In 2023, about 40.9 percent of remittances came from Filipinos based in the US. About 7.1 percent were remitted from Singapore; 6.2 percent from Saudi Arabia; five percent from Japan; and 4.7 percent from the United Kingdom.
The BSP also recorded remittances from the United Arab Emirates which accounted for 4.3 percent; Canada with 3.6 percent; Qatar with 2.8 percent; Taiwan with 2.7 percent; and South Korea with 2.5 percent.
The BSP records both cash remittances and personal remittances but they base its projection for remittances on the cash remittances data.
For 2024, the BSP expects remittances to grow by three percent year-on-year.
Based on the central bank’s latest Consumer Expectations Survey (CES), families that are dependent on an OFW member still typically use remittances to pay for food, rent and education, and just a little set aside as savings.
The third quarter 2023 CES noted that about 96.3 percent of OFW households spend remittances for food and other household needs while 61.4 percent said they use it to pay for education.
Remittances are also spent on: medical expenses (51.2 percent), savings (37.3 percent), payment of debts (18.5 percent), investments (9.3 percent), and purchase of motor vehicles (9.3 percent).