Cash remittances sent home by millions of Filipinos working overseas reached a six-month high in June 2024, helping boost household spending in the country.
The Bangko Sentral ng Pilipinas reported that cash remittances rose 2.5 percent in June to $2.88 billion from $2.81 billion a year ago.
“The expansion in cash remittances in June 2024 was due to the growth in receipts from land- and sea-based workers,” the BSP said.
This brought total cash remittances to $16.25 billion in the first half of 2024, up by 2.9 percent from $15.79 billion registered in the same period last year.
Higher inflows from the United States, Saudi Arabia and Singapore contributed mainly to the increase in remittances in the six-month period.
Personal remittances, which include bank-based transactions and non-cash items, also rose 2.5 percent in June to $3.21 billion from $3.13 billion registered in June 2023.
The BSP said this was due to higher remittances sent by land-based workers with work contracts of one year or more and sea- and land-based workers with work contracts of less than one year.
The June figure expanded the cumulative remittances in the first half by 2.9 percent to $18.10 billion from $17.59 billion a year earlier.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort traced the modest rise in remittances in June partly to the need for school-related expenses and summer vacation requirements.
He said the remittance inflows in June were the highest since December 2023. He predicted a similar growth in the coming months, “as OFW families/dependents still need to cope up with relatively higher prices/inflation locally.”
Ricafort said, however, that among the factors that might limit OFWs from sending more money to their families are the possible economic slowdown in the US and other OFW-host countries over the continued elevated Federal Reserve’s interest rates.
He said the Fed’s decision to bring back inflation rate to its 2-percent target is a drag to OFW remittances “especially if there would be job losses for some OFWs, though offset by the economic reopening in China, which is the world’s second biggest economy, since December 2022.”
“Nevertheless, the continued/sustained year-on-year growth in OFW remittances in recent months may also reflect faster economic recovery/rebound in some major host countries for OFWs around the world that has enabled more OFWs to work again,” he said.
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