Cash remittances up in February, but moderation expected as global economy churns slower

MANILA, Philippines — Money sent home by overseas Filipinos to their families continued to climb in February, but an analyst expects expansion to moderate as global economic growth churns slower.

Data released by the Bangko Sentral ng Pilipinas on Monday showed that money coursed through banks by overseas Filipinos inched up 2.4% year-on-year to $2.57 billion in February.

Year-to-date, remittances grew 3% to $5.33 billion compared to the first two months of 2022. 

Remittances, considered a cornerstone of the consumer-dependent domestic economy, posted its largest cash haul of $32.54 billion in 2022. This was despite being a year removed from the pandemic which crashed the global economy and forced overseas Filipinos to go home in droves because of layoffs and businesses going under.

The year opened with much of the same headwinds, such as a projected global recession, brutal inflation, and expensive borrowing costs that continued to cast a shroud over the global economy.

For 2023, the BSP forecast that cash remittances would expand by 4% on an annual basis.

Domini Velasquez, chief economist at China Banking Corp., expects some slowing down as the global economy grows slower. 

“Remittances from US, the biggest source, will likely slow down as prospects of a hard landing increases. Layoffs and possibility of a recession will curtail sending of remittances. In the Middle East, a decline in oil prices will likely inhibit economic growth of the region,” she said in a Viber message.

Velasquez noted that overseas Filipinos could have unevenly allocated their remittances, accounting for the usual holiday bump in money sent from abroad. 

Data broken down showed 41.6% of remittances in February came from the United States, while the rest came from Singapore, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Canada, Taiwan, Qatar and Malaysia. 

Remittance from land-based workers inched up by 2.6% year-on-year to $2.06 billion in February. Sea-based workers sent in a total of $510 million, creeping up 1.6% year-on-year.

“On the contrary, a more depreciated peso in February could have worked positively for remittances,” Velasquez added. — Ramon Royandoyan