Remittances inch up 2% to $2.71 billion in May

MANILA, Philippines — Cash remittances from overseas Filipino workers (OFWs) grew by two percent to $2.71 billion in May from $2.66 billion a year earlier, sustaining annual growth even as momentum remained subdued.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the May expansion in cash remittances was the slowest in four years, although cumulative inflows remained at record levels.

Personal remittances, which include cash sent through banks and informal channels as well as remittances in kind, inched up by 2.1 percent to $3.03 billion in May from $2.97 billion in the same month last year.

From January to May, cash remittances climbed by 2.5 percent to $14.11 billion from $13.77 billion a year earlier, while personal remittances grew by 2.6 percent to $15.74 billion from $15.34 billion.

The BSP said the sustained rise in cash and personal remittances continued to support household income, spending and overall domestic demand.

The United States remained the largest source of remittance inflows during the five-month period, followed by Singapore and Saudi Arabia, based on reported transactions by origin.

Remittances remain one of the country’s most dependable sources of foreign exchange and a key support for household consumption, helping cushion the economy from external shocks.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said the figures point to continued resilience despite slower growth.

“A two percent increase in May may be the slowest in four years, but remittances are still growing,” he said. “That suggests Filipino workers abroad continue to support their families despite global uncertainties, elevated inflation and geopolitical tensions in the Middle East.”

Ravelas said the softer pace likely reflected higher living costs in host countries, slower global economic activity and currency movements.

“With the peso relatively weaker against the dollar compared with a year ago, many OFWs can send fewer dollars while still delivering the same, or even higher, peso value to their families. In short, the purchasing power of every dollar remitted has improved, reducing the need to send larger dollar amounts,” Ravelas said.

UnionBank chief economist Ruben Carlo Asuncion likewise said the latest figures suggest growth remains positive but may be losing momentum.

“More importantly, the renewed risk of a US-Iran escalation raises the possibility that the impact on OFW employment and deployment in the Middle East could become more visible in the months ahead. While remittances remain resilient for now, we believe downside risks have increased and may not yet be fully reflected in the latest data,” Asuncion said.

The BSP expects cash remittances to grow by 2.7 percent this year and three percent in 2027.