CASH sent home by Filipino migrant workers hit its highest level for the year in July, as overseas Filipino workers (OFWs) continued to defy expectations and retain altruistic trends amid the pandemic.
The Bangko Sentral ng Pilipinas (BSP) reported on Wednesday that remittances to the country hit $2.853 billion in July this year, growing by 2.5 percent from its level last year.
Broken down, the increase in cash remittances was due to the growth in remittances from land- based workers and sea-based workers, which rose by 1.6 percent to $2.308 billion; and 6.9 percent to $545 million, respectively.
The strong July performance of remittances pushed the country’s cumulative cash remittances higher by 5.8 percent to $17.771 billion in the January-to-July period this year from $16.802 billion registered in the same period last year.
According to the BSP, the growth in cash remittances in the first seven months of 2021 came mainly from the United States, Malaysia and South Korea.
Meanwhile, in terms of country sources, the US registered the highest share of overall remittances at 40.4 percent in January to July 2021, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, South Korea, Qatar and Taiwan.
The combined remittances from these top 10 countries accounted for 78.6 percent of total cash remittances.
In a commentary after the data release, ING Bank economist Nicholas Mapa said July remittance numbers “surprised on the upside” when the market had expected a pullback from last year’s level.
“The $2.85 billion worth of foreign currency sent home was impressive given that this was the highest non-December level recorded with the funds sent home in July matching that which is usually sent home during the Christmas season,” Mapa said.
“Secondly, the higher dollar amount also surprised us as overseas Filipinos had in the past opted to send home less remittances whenever the Peso tends to weaken as exchange rate dynamics help beneficiaries cover Peso needs with less dollars sent home,” he added.
In the coming months, Mapa said, remittance flows are expected to sustain their upward trajectory with Filipino migrant workers still finding a way to help support domestic consumption.
“With job losses back home elevated and the economy in recession, we expect overseas Filipinos remittances to accelerate to pick up the slack and boost local spending. Sustained overseas Filipinos remittance flows coupled with the recovery in BPO [business-process outsourcing] receipts will help offset the widening trade deficit and limit the impact on the country’s current account,” Mapa said.