OVERSEAS Filipino workers’ (OFWs) personal remittances increased by 3.0 percent to $2.97 billion in March 2023 from $2.89 billion the same month last year, data from the central bank showed on Monday.
In a statement, the Bangko Sentral ng Pilipinas (BSP) traced the growth to higher remittances sent by 1) land-based workers with work contracts of one year or more; and 2) sea- and land-based workers with work contracts of less than one year.
For the first quarter of 2023, personal remittances also grew 3.0 percent to $8.91 billion from $8.65 billion recorded in the comparable period in 2022, data showed.
Moreover, the OFs cash remittances coursed through banks rose 3.0 percent to $2.67 billion in March 2023 from $2.59 billion in the comparable month a year ago.
For the first quarter of 2023, cash remittances coursed through banks amounted to $8.00 billion, higher by 3.0 percent than the year-ago level of $7.77 billion, data showed.
The growth in cash remittances from the United States (US), Singapore, Saudi Arabia and the United Arab Emirates (UAE) contributed mainly to the remittance expanion in the first quarter of 2023.
Meanwhile, in terms of country sources, the US posted the highest share of overall remittances during the period, followed by Singapore, Saudi Arabia and Japan.
For her part, Domini Velasquez, chief economist at China Banking Corp. said the higher growth in remittances was likely driven by improving economic outlooks in advanced economies.
“The US looks to be heading for a soft landing, with recession now only expected in [the] fourth quarter and the labor market still robust. Meanwhile, the euro area and the UK are now projected to dodge a recession altogether this year,” she said.
“However, persistently high inflation in Europe, especially in the UK, may prevent OFs from sending more remittances back to the Philippines and keep remittance growth tepid over the coming months,” Velasquez added.
Chief Economist Michael Ricafort of Rizal Commercial Banking Corp. said the OFW cash remittances for March—with 3 percent —was slightly slower than the 3.2 percent in the same period last year—but still a good signal for the economy.
“The slowdown in OFW remittances data may also have to do with the relatively higher prices in major host countries for OFWs that fundamentally reduced the remittances sent back to the Philippines,” he added.
Ricafort also cited as a factor in the slowdown in OFW remittances “the weaker peso exchange rate against the dollar compared to year-ago levels [about 9 percent peso depreciation compared to levels before the Russia-Ukraine war started in February 2022].” Such “also partly reduced the need to send more OFW remittances because of higher conversion rate for the dollar against the peso.”
Image credits: Nonie Reyes