December 17, 2024 | 12:00am
MANILA, Philippines — Remittances sent home by overseas Filipino workers (OFWs) picked up at the start of the “ber” months, reaching their highest level in three months.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that personal remittances rose by 2.7 percent to $3.42 billion in October from $3.33 billion in the same month last year.
This was the highest since the $3.43 billion recorded in July. However, in terms of pace, the latest growth was the slowest in four months or since the 2.5 percent expansion recorded in June.
The expansion was seen in remittances from both land-based and sea-based workers, the central bank said.
Of the total amount, cash remittances coursed through banks went up by 2.7 percent to a three-month high of $3.08 billion in October from $3 billion in the same month a year ago.
This was also the highest since the $3.09 billion booked in July. But the increase was the slowest since the 2.5 percent seen in June.
Land-based OFWs sent $2.48 billion in October, 3.2 percent higher than the $2.4 billion a year ago. Remittances from sea-based workers inched up by 0.6 percent to $600 million.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the continued growth in remittances supports consumer spending, which is an important growth driver of the economy.
He said the increase in October remittances was due to the expected seasonal surge in remittances and conversion to pesos during the Christmas and New Year holiday season in December, the biggest spending by households in a typical year.
Ricafort also noted that the slower growth rate in October was due to the peso weakening to the 56 to 58 levels against the dollar, since less dollars are needed for the same amount in local currency.
From January to October, personal remittances that cover cash sent through banks and informal channels as well as remittances in kind increased by three percent to $31.49 billion from $30.57 billion in the same period a year ago.
Of the total, cash remittances rose by three percent to $28.3 billion during the 10-month period versus last year’s $27.49 billion.
Ricafort expects growth in remittances to continue as OFW families still need to cope with relatively higher prices locally.
However, possible protectionist policies by US president-elect Donald Trump such as tightening immigration rules could slow down OFW remittances from the US.
Another risk to watch out for is the potential economic slowdown in countries that host a large number of OFWs amid a tight interest rate environment, he said.
The BSP projects personal and cash remittances to grow by three percent this year and in 2025.
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