CASH sent home by Filipino migrant workers remained steady in April, the Bangko Sentral ng Pilipinas (BSP) reported on Monday, allaying fears on the growth trend of the country’s major dollar source for the year.
Data from the Central Bank showed cash remittances to the Philippines grew 4 percent in April to hit $2.44 billion during the month from its $2.35-billion level seen in the same month last year. The 4-percent growth stabilized the growth of remittances in the first four months of the year—which has seen a slight fluctuation in recent months.
In particular, remittances at the beginning of the year grew at 4.4 percent, then slowed to 1.5 percent in February. In March, it grew significantly faster at 6.6 percent.
The total cash remittances in the first four months of the year hit $9.74 billion—up 4.1 percent from the same four-month period last year.
Security Bank Chief Economist Dan Roces said the steady growth of remittances is a good indicator of the remittances’ overall health and contribution to the economy down the line.
“We attribute the growth to the cyclical nature of our remittances; April months usually have lower values compared with previous months as the post-graduation expenses of most households are done,” Roces said.
“Moreover, the year-on-year growth is proof-positive that overseas Filipino remittance flows continue to be a main contributor to household consumption as it maintains growth at a healthy pace. This steady stream of dollars continues to fund the peso’s purchasing power and assures household consumption; taken together with BPO [business-process outsourcing] flows, remittances also help to augment the continuing struggles of our export sector,” he added.
Broken down, the BSP said the continued growth in cash remittances was supported by the expansion of remittances in both land-based and sea-based Filipino migrant workers for the month.
In particular, sea-based workers sent $600 million in cash remittances during the month, growing 10.6 percent from what they sent in the same month last year. Land-based workers, meanwhile, sent $1.8 billion in April, growing by 2.2 percent from their level of remittances last year.
By country source, the US registered the highest share of overall remittances for January to April 2019 at 35.9 percent. It was followed by Saudi Arabia, Singapore, United Arab Emirates, the UK, Japan, Canada, Hong Kong, Qatar and Germany. The combined remittances from these countries accounted for 78 percent of total cash remittances from January to April 2019.
Just recently, the BSP announced that they are keeping their 3-percent assumption growth of remittances for 2019, thus leaving room for a slowdown in the coming quarters of the year.
In 2018, cash remittances posted an average growth of 3.1 percent, to hit $28.943 billion at year’s end.
Image credits: Nonie Reyes