OFW remittances hit all-time high in 2018
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 15 Feb 2019 16:30:05 +0000
Money sent home by overseas Filipino workers (OFWs) hit a record high in the December, in the process also raising the full-year tally to what the Bangko Sentral ng Pilipinas (BSP) described as the “highest annual level to date.”
At $3.15 billion for the month, personal remittances were 3.6 percent higher compared to the previous peak of $3.04 billion seen a year earlier. The growth rate, however, slowed from the 7.9 percent posted in December 2017.
The result brought the full-year tally to $32.21 billion, up 3.0 percent from 2017’s $31.29 billion.
“The growth in personal remittances during the year was driven by remittance inflows from land-based OFs with work contracts of one year or more and remittances from both sea-based and land-based OFs with work contracts of less than one year, which rose annually by 2.8 percent and 4.6 percent, respectively,” the BSP said in a statement.
It added that personal remittances were a major driver of domestic consumption and accounted for 9.7 percent of gross domestic product and 8.1 percent of gross national income last year.
Cash remittances, which only count money coursed through banks, also hit a new all-time high of $2.84 billion in December, 3.9 percent higher compared to $2.74 billion
a year ago.
The countries that contributed most to the increase during the month were the United States and Canada.
Full-year 2018 cash remittances posted growth of 3.1 percent — exceeding the BSP’s projected growth rate of 3.0 percent for the year — to $28.94 billion, up from $28.06 billion a year earlier.
Growth in cash remittances was supported by transfers from both land-based and sea-based OFWs, which the central bank said were up by 2.8 percent and 4.6 percent, respectively, from last year.
“Cash remittances in 2018 remained strong amid political uncertainties across the globe,” the BSP said, adding that this was evident in the 12.3-percent, 9.7-percent and 7.7-percent expansions respectively seen in transfers from Asia, the Americas and Europe.
Growth in these regions made up for the 15.3-percent decrease in remittances from the Middle East, which the central bank said was partly due to a continued repatriation program.
Almost 79 percent of total cash remittances for the year came from the US, Saudi Arabia, the United Arab Emirates, Singapore, Japan, the United Kingdom, Qatar, Canada, Germany and Hong Kong.
Commenting on the latest remittance data, ING Bank Manila senior economist Nicholas Antonio Mapa said last year’s growth showed “these flows remain structural and a source of FX (foreign exchange) we can count on.”
He projected a 3-5 percent growth this year as “Filipinos will always find a way to send home remittances, come hell or high recession.”
“If the trade gap, however, remains wide, structural flows from OFWs and BPO (business process outsourcing) call centers may not be enough to offset the drain in FX, leading to a slight depreciation of the peso towards year end,” Mapa warned.
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