Remittances rebound to 17-month high in April 2018

MANILA, Philippines — Remittances from overseas Filipinos rebounded strongly in April, booking its fastest growth in 17 months after registering its steepest decline in almost 15 years last March, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Nestor Espenilla Jr. said personal remittances went up 12.9 percent to $2.62 billion in April from $2.32 billion in the same month last year.

This was the fastest since personal remittances, which measures cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders, grew 18.4 percent in November 2016.

For the first four months of the year, personal remittances which is the sum of net compensation of employees, personal transfers, and capital transfers between households, inched up four percent to $10.43 billion from $10.03 billion in the same period last year.

“The continued growth in personal remittances during the first four months of 2018 was driven by steady remittance inflows from land-based overseas Filipino workers with work contracts of one year or more, which aggregated to $8.1 billion, and compensation of sea-based workers and land-based workers with short-term contracts, which reached $2.1 billion,” Espenilla reported.

On the other hand, the BSP chief said cash remittances coursed through banks booked a double-digit 12.7 percent increase to $2.35 billion in April from $2.08 billion in the same month last year.

He said cash remittances sent by land-based workers increased 15.1 percent to $1.8 billion in April, while that of sea-based workers climbed 4.8 percent to $500 million.

According to the BSP governor, primary contributors to the growth in remittances in April include the US with 4.2 percentage point contribution to the 12.7 aggregated growth, followed by Canada with 1.9 percentage points, and Singapore with one percentage point.

Espenilla said the increase in the cash remittances in April brought the cumulative cash remittances for the first four months of the year to $9.35 billion, higher by 3.5 percent from $9.04 billion in the same period last year.

By country source, the bulk of cash remittances during the period came from the US, Saudi Arabia, United Arab Emirates (UAE), Japan, Singapore, United Kingdom, Canada, Germany, Qatar, and Kuwait which cornered 80 percent of the total.

Overseas Filipino workers are the biggest winners, together with exporters, in the continued weakening of the peso against the US dollar amid the ballooning trade and current account deficits caused by rising importation of capital equipment and raw materials to support the country’s expanding economy.

The local currency has emerged as the weakest performing currency in the region, shedding close to six percent and piercing the 53 to $1 to hit its lowest level in 12 years.

Last March, the amount of money sent home by Filipinos abroad posted its steepest decline in almost 15 years on the continued repatriation of Filipino workers and the fewer banking days in March due to the Holy Week.

During that month, personal remittances slipped 9.9 percent, while cash remittances coursed through banks dropped 9.8 percent as preliminary data from the Department of Labor and Employment indicated that a total of 1,124 OF workers were repatriated from Kuwait as of Feb. 8.

In February, the Department of Labor and Employment issued a total deployment ban as ordered by President Duterte due to a series of reports involving abuse and death of Filipino workers in Kuwait.

For one, Filipino domestic helper Joanna Demafelis was found dead in a freezer in an apartment in Kuwait.

Things turned for the worst after Kuwait declared Philippine Ambassador Renato Villa “persona non grata” for leading the rescue of distressed Filipino workers from private Kuwait homes without proper coordination with local authorities.

Fortunately, the Philippines and Kuwait have signed a memorandum of agreement providing additional protection for Filipino workers in the Gulf country.

The BSP expects a four percent growth in remittances this year. Remittances sent home by Filipinos abroad account for about 10 percent of the gross domestic product (GDP) and provides the country with much needed buffer to survive external shocks.