First fall in over 12 years: OFW remittances shrink 0.6% in August

MANILA, Philippines - Remittances by Filipinos working abroad fell for the first time in over a decade in August but remained in positive territory in the first eight months, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Cash remittances amounted to $2.04 billion in August or 0.6 percent lower compared to $2.06 billion in the same month last year.

This is the first time since April 2003 when the amount of money sent home by overseas Filipinos to their loved ones in the Philippines declined on a monthly basis.

Personal remittances from Filipino workers with contracts of one year or more retreated 0.8 percent to $2.26 billion in August from $2.28 billion in the same month last year.

BSP officer-in-charge Vicente Aquino attributed the decline to the depreciation of some currencies against the dollar particularly the euro, Canadian dollar, and the Japanese yen.

Aquino explained the weakening of these currencies reduced the dollar equivalent of remittances sent from host countries.

Other currencies have been weakening against the dollar amid the impending interest rate hike by the US Federal Reserve that is putting renewed pressure on emerging economies with investors withdrawing their cash to seek better returns in the US.

The global economic slowdown led by China is causing uncertainties in the global financial markets.

Amid the decline in August, climbed 4.1 percent to $16.21 billion from January to August this year compared to $15.57 billion in the same period last year.

Of the total amount, land-based workers contributed $12.4 billion, while sea-based workers accounted for $3.8 billion.

Aquino said the bulk of the cash remittances came from the US, Saudi Arabia, United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong, and Canada.

Likewise, personal remittances inched up 3.9 percent to $17.93 billion in the first eight months from $17.27 billion in the same period last year.

Aquino, who is also BSP deputy governor, said the deployment of Filipinos abroad continued to provide support to remittance inflows.

Recent data from the Philippine Overseas Employment Administration (POEA) showed total job orders reached 584,816 in the first eight months.

Of the total job orders, about 41.5 percent were processed and intended mainly for service, production, and professional, technical and related works in Saudi Arabia, Kuwait, Qatar, Taiwan, and Hong Kong.

The BSP has set a five percent growth target in the value of remittances from overseas Filipinos this year. Cash remittances went up 5.9 percent to $24.35 billion last year from $22.98 billion in 2013, while personal remittances increased by 6.3 percent to $26.97 billion from $25.37 billion.

The Philippines is the third-leading recipient of remittances in the world after India and China. About 12 million Filipinos are working abroad.

Earlier, Finance secretary Cesar Purisima said revenues from the business process outsourcing (BPO) sector are expected to eclipse remittances from overseas Filipinos as the major source of dollar for the Philippines.