Remittances dip to six-month low in November
From AB Capital's The Opening Bell: Three Moves
Event
Cash remittances coursed through banks in November reached about US$2.91bn, up 3.6% YoY, but marked the lowest monthly inflow in six months. Personal remittances reached US$3.23bn, also up 3.6% YoY. YTD remittances still rose 3.2% YoY, led by continued flows from the US, Singapore, and Saudi Arabia.
View
We think the decline reflects timing effects and seasonal front-loading ahead of the holidays, rather than a fundamental shift in remittance strength. In our view, annual remittance growth remains supportive of household consumption and external balance, though, the pace is sensitive to seasonal patterns and FX movements.
Catalyst
Remittances typically peak in December and January, especially around the extended “ber months” when OFWs send ahead of celebrations. A stronger US$ or a weaker Php could lift peso-equivalent inflows. Conversely, a sharp US$ retreat could temper remittance receipts and consumption forecasts.
Action
Near-term volatility in monthly figures should not obscure the stable medium-term trend. Remittance resilience supports domestic demand forecasts and external stability. We prefer consumer and retail names that benefit from consistent household cash flows, while monitoring cost of living pressures and FX impacts on real purchasing power.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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