OFW remittances up 9% to $2.89 billion in September

MANILA, Philippines — Remittances from overseas Filipino workers bounced backed strongly in September, recording the fastest growth in 29 months as OFWs scrambled to send more money to their loved ones in the country during the ‘ber’ months in preparation for the Christmas holidays, according to the Bangko Sentral ng Pilipinas.

BSP Governor Benjamin Diokno yesterday reported personal remittances went up by 9.1 percent to a two-month high of $2.89 billion in September from $2.65 billion in the same month last year.

This was the fastest growth since the 12.9 percent increase recorded in April 2018.

Diokno said personal remittances from land-based workers with work contracts of one year or more booked a double-digit growth of 10.2 percent to $2.2 billion in September from $2.001 billion a year ago.

Likewise, Diokno said remittances from sea-based workers and land-based workers with work contracts of less than one year grew by 6.5 percent to $622 million from $584 million.

From January to September, the BSP chief said personal remittances, including personal transfers, as well as household-to-household transfer between Filipinos who have migrated abroad and their families in the Philippines, eased by 1.4 percent to $24.3 billion from $24.64 billion in the same period last year.

On the other hand, Diokno said cash remittances coursed through banks increased by 9.3 percent to $2.6 billion in September from $2.38 billion in the same month last year. This was the fastest growth since the 12.9 percent increase recorded in April 2018.

Diokno said remittances from land-based workers rose by 10.2 percent to $2.031 billion, while that from sea-based OFWs went up by 6.5 percent to $570 million.

For the nine-month period, the BSP chief said cash remittances contracted by 1.4 percent to $21.88 billion from $22.18 billion in the same period last year.

According to the BSP, remittances from the US, Singapore, Qatar, Hong Kong, and Taiwan reported increases, while declines were noted in Saudi Arabia, the United Arab Emirates, Germany, Kuwait, and the United Kingdom.

Diokno said the US was the major source of OFW remittances with a share of 40.1 percent from January to September.

Diokno said the 1.4 percent decline in personal and cash remittances during the nine-month period is now lower than the revised two percent contraction projected by the central bank for this year.

“At this level, the contraction in cumulative remittances for the first nine months narrowed to 1.4 percent from 2.6 percent in August,” Diokno said.

Last June, the BSP lowered the projected contraction of OFW remittances to two instead of five percent this year before recovering with a growth of four percent next year.

Remittances nose-dived from March to May as more OFWs were displaced in host countries due to uncertainties brought about by the  COVID-19 pandemic as well as lack of mobility as the entire Luzon was placed under enhanced community quarantine in mid- March.

Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, said the latest figure may result in an average drop of one to 1.5 percent instead of 10 percent in OFW remittances this year.

“Expect remittances to do better from here onwards, with seasonal upticks in the next coming months,” Asuncion said.

OFWs usually send more money during the ‘ber’ months in preparation for the Christmas holidays.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the lowest levels for OFW remittances have already been seen in April and May during the height of the lockdown in many host countries around the world

“Remittances could still pick up especially within the fourth quarter for Christmas season spending as some affected OFWs could also tap on their savings, while some laid off OFWs could also tap part of their separation pay,” Ricafort said.

The peso has emerged as one of the strongest performing currencies in the world, gaining over four percent to hit a four-year high as it trades within the 48 to $1 level on the back of the country’s sound macroeconomic fundamentals amid the global health crisis as well as strong inflows.

The peso weakened by 1.5 centavos to close at 48.225 yesterday from Friday’s 48.21.