Remittance inflows rebound in May
MANILA, Philippines - The amount of cash and personal remittances from overseas Filipinos recovered to hit a two-month high in May after dropping sharply in April, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
BSP Governor Nestor Espenilla Jr. said personal remittances climbed 7.1 percent to $2.59 billion in May from the $2.42 billion recorded in the same month last year.
Personal remittances represent the sum of net compensation of employees, personal transfers, and capital transfers between households. It measures the total amount of remittance flows into the country, including 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.
Data showed personal remittances increased 5.2 percent to $12.61 billion in the first five months of the year from $11.99 billion in the same period last year.
Espenilla said personal remittances from land-based workers with contracts of one year or more grew 5.9 percent from January to May to compensate for the 0.6 percent decline in remittances from sea – and land-based workers with contracts of less than one year.
The BSP chief said cash remittances grew 5.5 percent to $2.31 billion in May from $2.19 billion in the same month last year. Remittances from land-based workers went up 6.2 percent to $1.8 billion, while the amount sent by sea-based workers inched up three percent to $500 million in May.
In all, the amount of money sent home by Filipinos abroad rose 4.5 percent to $11.35 billion in the first five months of the year from $10.86 billion in the same period last year.
Contributions from land-based workers rose 5.9 percent to $9 billion, while those from sea-based workers retreated 0.6 percent to $2.3 billion.
Espenilla said about 80 percent of the cash remittances from January to May came from the US, Saudi Arabia, United Arab Emirates, Singapore, Japan, United Kingdom, Qatar, Kuwait, Canada, and Germany.
Personal and cash remittances in April declined 5.2 percent and 5.9 percent, respectively. This was due to the repatriation of workers in Saudi Arabia after the state-visit made by President Duterte.
The BSP has kept its remittance growth target at four percent for this year despite the diplomatic crisis in the Middle East involving Qatar as well as the migrant policy of US President Donald Trump.
“Low commodity prices and the diplomatic crisis in the Middle East, as well as US
President Trump’s inward-looking policies – risks recognized by the BSP – could dampen the overseas deployment of Filipino workers in the region and hurt remittance inflows,” Deutsche Bank economist Diana del Rosario said.
She pointed out sustained remittance inflows and buoyant revenues from the business process outsourcing (BPO) sector would continue to provide comfort but their ability to counter the widening trade deficit in the current account (CA) would be limited by multiple headwinds.