Balikbayan bucks: Cash remittances improve in 2022

MANILA, Philippines — Overseas Filipinos sent more money home in 2022 as they rushed to support families weathering the impact of rising prices.

Full-year data released by the Bangko Sentral ng Pilipinas on Wednesday showed that cash remittances grew 3.6% year-on-year to $32.54 billion in 2022.

This was the largest cash remittance haul in recent memory, considering the pandemic crashed the global economy that forced overseas Filipinos to go home in droves because of layoffs and businesses going under.

As it is,the remittance haul saw significant gains in 2022, as labor demand improved and the global economy reopened to activity previously restricted by the pandemic. 

The data also revealed the remittance haul grew in December as well. Cash remittances rose 5.8% on an annual basis in December to $3.16 billion, larger than the $2.64 billion recorded in the previous month. 

Overseas Filipinos usually send in more money in the final months of the year owing to the holiday season. 

Even then, remittances are considered the lifeblood of the consumption-dependent Philippine economy. Money sent home by overseas Filipinos augment their families’ income here.

Sought for comment, Domini Velasquez, chief economist at China Banking Corp., welcomed the development. 

"Cash remittances continued its strength in December as overseas Filipinos either took the opportunity to come home or send money home for the holidays. Higher cost of living in the Philippines could have prompted [Overseas Filipino]s to send home more money," she said in a Viber message. 

Velasquez likewise attributed the improving levels to rosier conditions in developed economies, where OFWs are often deployed. 

Besides inflation, Nicholas Antonio Mapa, senior economist at ING Bank in Manila, cited exchange rate nuances that pushed remittance levels up.

"Exchange rate nuances and high inflation possibly getting [Overseas Filipino]s to send home more remittances to cover peso expenses," he said in a Viber message. 

The peso regained its lost vigor against the dollar towards the end of the year. 

BSP data showed that a bulk of cash remittances from the United States, Saudi Arabia, Singapore, Qatar, and United Kingdom piled on to fatten the haul in 2022. 

"Remittances will be counted on anew this year and inflation surges as Filipino households navigate what is turning out to be a cost of living crisis," Mapa said.