CASH remittances sent from Filipinos abroad exceeded expectations as inflows from the country’s modern-day heroes grew 2.7 percent in August, according to data from the Bangko Sentral ng Pilipinas (BSP).
The BSP said cash remittances sent through banks reached $2.8 billion, higher than the $2.72 billion in the same month the previous year.
In the January to August period this year, cash remittances amounted to $21.58 billion, marking a 2.8-percent increase from the $20.99 billion in the same 8-month period a year ago.
“We observe that despite our subdued forecasts, actual remittances growth seem to outperform our expectations,” Unionbank Chief Economist Ruben Carlo Asuncion told BusinessMirror.
Asuncion said they initially expected only a growth of 0.7 percent in cash remittances for August. Their estimate for July was “actually negative.” “But, 2.6 percent and 2.7 percent [were the] actual [numbers] for both July and August, respectively.”
He also said remittances may continue to increase despite the Israel conflict, especially if it continues to be a “confined war.”
However, the moment the war spills over to other countries, particularly in the Middle East, this could threaten remittance inflows.
“In a confined war [Israel vs Hamas only], it would be very minimal. In a spillover war, it may look different because it may include other ME [Middle East] players. But, the likelihood of this happening is very small at this point,” Asuncion said.
Institute for Migration and Development Issues (IMDI) Executive Director Jeremaiah M. Opiniano told BusinessMirror that remittances in 2022 indicated OFWs were sending more compared to the prepandemic period.
Based on his estimates, Opiniano said there were 2.18 million OFWs deployed and they sent home some P210.4 billion or an average of P106 million.
However, in 2022, there were fewer OFWs at 1.96 million who sent home P197.47 billion worth of remittances or an average of P111,000, higher than 2019.
“Does the situation mean that OFWs have to work harder now and send more money? We understand that they’re trying to recoup lost incomes from the past three years,” Opiniano said.
“We worry, though [for] their overall well-being, even as the world still feels traces of how the pandemic affected our lives in many ways,” he added.
Opiniano said this will have an impact on the welfare of OFWs abroad especially with Covid-19 still a health threat, especially for persons with weak immune systems, despite vaccination.
Another threat is the Israel-Palestine conflict. Opiniano said “remittances and internet services may have been cut off given the spate of bombings across Israel and Palestine.”
As OFWs will continue sending remittances, even at the risk of reducing their expenses to protect themselves and ensure their safety, Opiniano said more needs to be done to help the country’s modern heroes.
“Government, therefore may have to be alert in providing social protection services to OFWs,” Opiniano said. “We can only hope that ongoing evacuation efforts in Gaza Strip-Egypt border lead to a safe return by Filipinos from Palestine. We also pray for those who died and [were] hurt from the ongoing conflict.”
Based on BSP data, the growth in cash remittances from the United States, Saudi Arabia and Singapore contributed mainly to the increase in remittances in the first eight months of 2023.
In terms of the countries where these remittances originate, the US had the highest share of overall remittances during the period, followed by Singapore and Saudi Arabia.
Meanwhile, personal remittances from Overseas Filipinos (OFs) increased by 2.8 percent to reach $3.10 billion in August 2023 from $3.02 billion in the same month of the previous year.
The growth in personal remittances in August 2023 was driven by increased remittances from land-based workers with work contracts of one year or more; and sea- and land-based workers with work contracts of less than one year.
Similarly, the total amount of personal remittances from OFs in the first eight months of 2023 reached $24.01 billion. This represents a 2.9-percent increase from the $23.34 billion in the same period in 2022.
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