Remittances recover in July 2018

MANILA, Philippines — Personal remittances from overseas Filipinos bounced back in July, rising by 4.5 percent to $2.67 billion from $2.56 billion in the same month last year, according to the Bangko Sentral ng Pilipinas.

This brought the first seven months’ tally to $18.46 billion, $529 million higher than the $17.92 billion recorded in the same period last year. Personal remittances consist of 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.

“The rise in personal remittances during the first seven months of 2018 was supported by an increase of 2.8 percent and four percent in remittance inflows from land-based workers with work contracts of one year or more and sea-based workers and land-based workers with short-term contracts, respectively,” BSP Governor Nestor Espenilla said.

On the other hand, the BSP chief said cash remittances coursed through banks rose by 5.2 percent to $2.4 billion in July from $2.28 billion in the same month last year.

He said cash remittances sent by land-based workers grew by 4.5 percent to $1.9 billion, while those from sea-based workers expanded by 7.8 percent to $511 million.

The cash remittances for July came mainly from the US, Canada, the United Kingdom, and Germany.

For the first seven months, cash remittances inched up three percent to $16.6 billion from $16.09 billion in the same period in 2017.

In particular, cash remittances from land-based and sea-based workers totaled $13.1 billion and $3.5 billion, respectively. More than 79 percent of the total cash remittances came from the US, Saudi Arabia, United Arab Emirates, Singapore, Japan, UK, Qatar, Canada, Germany, and Hong Kong.

The BSP has set a four percent growth target for both personal and cash remittances this year.

Beneficiaries of remittances emerge as one of the winners of the continued weakening of the peso against the dollar.

Remittances continue to boost personal consumption, helping sustain a steady growth. Personal remittances accounted for 10 percent of gross domestic product (GDP) and 8.3 percent of gross national income (GNI) last year.

ING Bank Manila senior economist Joey Cuyegkeng said the capital inflows and the hawkish BSP would moderate or offset the weakening bias resulting from the

current account deficit, while moderating private sector growth with higher financing costs.