By Aaron Michael C.Sy, Journalist
MONEY SENT HOME from abroad Filipino workers (OFWs) increased by 3 percent in February, the Bangko Sentral ng Pilipinas (BSP) said Monday.
Central bank data shows that remittances through banks reached $2.65 billion. compared to $2.57 billion a year earlier.
Month over month, the figure was 6.7% lower than January’s $2.84 billion.
Growth in remittances was also faster than the 2.7% in January and the 2.4% a year ago.
“The increase in remittances in February 2024 was due to the growth in receipts from land and sea workers,” the BSP said.
Remittances from land-based workers rose 3.4% to $2.13 billion, while money sent by sea-based workers edged up 1.2% to $520 million.
“We noted that the increase recorded in FebruaryF“This situation has had an impact in terms of the real Philippine peso value of remittances,” said Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc.. “So, we believe that inFThe situation could pose this challenge until El Niño-related issues begin to fade in the second half of 2024.”
InFGrowth accelerated to 3.4% in February from 2.8% in January, but that was slower than 8.6% a year ago. February marked the third consecutive month that inflation was within the target range of 2% to 4%.
For the January-February period, remittances rose 2.8 percent to $5.48 billion, compared to $5.33 billion a year ago.
“Growth in remittances from the United States, Saudi Arabia, Singapore and the United Arab Emirates (UAE) mainly contributed to the increase in remittances in January-February 2024,” it said the BSP.
The United States accounted for 41.4% of total remittances in the first two months of the year. Singapore was the second largest source of remittances at 7.3%, followed by Saudi Arabia (5.6%), Japan (5.2%) and the United Kingdom (4.8%).
Other sources of remittances were the United Arab Emirates (3.8%), Canada (3.2%), Taiwan (2.9%), Qatar (2.8%), and Malaysia (2 .5%).
Mr. Asuncion also noted that the share of remittances from Middle Eastern countries had declined.
“I noticed that there was a marked decline in the share of host countries from the Middle East, but there was also a marked increase in the share of other host countries like the United States, Japan and the United Kingdom,” he said.
In a Viber message, Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said the continued increase in remittances is a positive for the Philippine economy as it boosts consumer spending.
Meanwhile, personal remittances from OFWs also increased by 3 percent in February to $2.95 billion.
Remittances from workers with contracts of more than a year increased 3.3 percent to $2.31 billion, while money sent by OFWs with contracts of less than a year increased increased by 1.7% to $570 million.
Year-to-date, personal remittances increased 2.8% to $6.1 billion, up from $5.93 billion a year ago.
Mr. Ricafort said he expects modest growth in remittances over the coming months.
“For the coming months, the single-digit growth in remittances from OFWs may still continue, as families/dependents of OFWs still face relatively higher prices/inflation at the local level, which would require sending more remittances,” he said.
Risks of an economic slowdown or recession in the United States could also dampen remittance growth, as this could lead to job losses for OFWs, Ricafort added.
Mr. Asuncion said he expects remittances to increase 3% this year and 2.8% in 2025.
“We still believe remittances will increase as expected despite rising geopolitical risks, particularly in the Middle East,” he said.
Meanwhile, Emilio S. Neri, Jr., chief economist of the Bank of the Philippine Islands, said remittance growth may accelerate due to the increased deployment of OFWs this year.
“OFW deployment reached an all-time high in 2023… We expect the growing number of overseas Filipinos to send more, as more workers are sent abroad” , did he declare.
The BSP expects remittances to increase by 3 percent this year.