IMPROVED global recovery prospects and the reopening of more countries were cited among the factors for the rise in personal remittances from overseas Filipinos (OF) last year, exceeding pre-pandemic levels and posting an all-time high, as reported by the Bangko Sentral ng Pilipinas (BSP).
Data released on Tuesday by the Central Bank showed that Filipino migrant workers sent home $34.884 billion worth of remittances last year, which is above the $33.467 billion in 2019. This is also 5.1 percent more than $33.194 billion in 2020, the first pandemic year.
The 2021 remittance figure represents 8.9 percent of the gross domestic product and 8.6 percent of the gross national income of the country.
“Improved global economic recovery prospects until end December 2021, with the further re-opening of many countries around the world, including major host countries, also improved employment prospects for some OFWs [overseas Filipino workers] in recent months, thereby also leading to more OFW remittances sent to the families/dependents in the country,” RCBC Chief Economist Michael Ricafort said.
The growth in personal remittances was supported by land-based workers with work contracts of one year or more. Their remittances rose by 5.6 percent to $27.005 billion in 2021 from $25.564 billion the previous year.
The sea- and land-based workers with work contracts of less than one year also contributed to the attainment of the all-time-high record, sending home $7.138 billion in 2021, or a 2.9-percent improvement from $6.934 billion in 2020.
BSP’s take
“The growth in personal remittances reflected a pickup in OFW deployment, strong demand for OFWs amid the reopening of host economies to foreign workers, and the continued shift to digital support that facilitated inward transfer of remittances,” the BSP added.
BSP said that cash remittances from OFs have “remained robust” despite the pandemic, noting the growth in annual inward remittances from the Americas (7.1 percent), Europe (5.5 percent), Asia (4.5 percent) and the Middle East (0.7 percent).
In terms of country source, the majority or 40.5 percent of the cash remittances last year came from the United States. This is followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar, and South Korea.
In total, these 10 countries accounted for 78.9 percent of the total cash remittances last year.
Highest since 2005
Meanwhile, of remittances for December 2021 alone rose 2.9 percent to $3.298 billion year-on-year, the highest monthly level since 2005.
Ricafort said this reflected the “seasonal increase in spending by consumers, households, businesses, and other institutions during the December holiday season.”
Oxford Economics, in a report this month, projected remittances to grow by 5.4 percent this year on the back of a 7.5-percent economic growth forecast.
“The rebound in remittances is important for the country’s economic recovery. While the impact of remittances on the domestic economy has gradually declined over the years, it is still a crucial source of income for households and accounts for more than 10 percent of private consumption,” the think tank said.
Image credits: Nonie Reyes