Remittances plummet to 9-month low in February

MANILA, Philippines — Money sent home by overseas Filipino workers (OFWs) went down to its lowest level in nine months in February amid global economic headwinds, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Data from the central bank showed personal remittances inched up by three percent to $2.95 billion in February from $2.86 billion in the same month in 2023.

This was the lowest since the $2.78 billion recorded in May 2023.

In terms of growth rate, it was the fastest in two months, or since the 3.9 percent growth recorded last December.

The sum of net compensation of employees, personal transfers and capital transfers between households in February went up by 2.8 percent to $6.1 billion in the first two months from a year-ago level of $5.93 billion.

Of the total, cash remittances coursed through banks also increased by three percent to $2.65 billion in February from $2.57 billion in the same month in 2023.

This was also the lowest since the $2.49 billion recorded in May 2023, while the three percent growth rate was the fastest since the 3.8 percent booked last December.

In the first two months of the year, the BSP reported a 2.8-percent rise in cash remittances to $5.48 billion compared to $5.33 billion in the same period in 2023.

“The decline in BSP’s remittance data to a nine-month low in February, despite a year-on-year increase, suggests seasonal fluctuations as well as likely economic headwinds in Filipino host countries,” Security Bank chief economist Robert Dan Roces said.

According to the BSP, the growth in cash remittances from January to February came mainly from the US, Saudi Arabia, Singapore and the United Arab Emirates (UAE).

The US posted the highest share with 41.4 percent, followed by Singapore with 7.3 percent, Saudi Arabia with 5.6 percent, Japan with 5.2 percent, United Kingdom with 4.8 percent, UAE with 3.8 percent and Canada with 3.2 percent.

“Looking ahead, global economic conditions are expected to improve, according to the International Monetary Fund, which means positive employment opportunities for Filipinos abroad. This also means steady growth and resilience in remittances,” Roces said.

ING Bank Manila senior economist Nicholas Mapa said the continued growth in remittances is in line with his medium-term growth outlook for the sector.

“Deployment of new OFWs as well as growth in income of existing OFWs helped deliver the roughly three percent pace of expansion,” Mapa said.

“Remittances remain a stable source of foreign exchange while also helping deliver peso purchasing power to help drive domestic consumption,” Mapa added.

The BSP sees both personal and cash remittances climbing by three percent this year.