CASH sent home by Filipino migrant workers surged in April, reversing the contraction seen in the previous month, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.
The 12.7-percent rise in remittances sent by overseas Filipino workers (OFW) across the globe represented the fastest monthly remittance growth since November 2016.
The surge reversed the 9.8-percent contraction in March this year, and brought in a total of $2.35 billion cash to the country in April.
ING Bank Manila senior economist Joey Cuyegkeng told the BusinessMirror that the rise in remittances was a “pleasant surprise,” but is not enough to cover for the deficit in trade incurred by the country due to its rising imports.
Data from the BSP showed growth in both land-based and sea-based Filipino workers during the month.
In particular, remittances from land-based OFWs grew 15.1 percent to hit $1.8 billion during the month, while sea-based workers’ remittances grew 4.8 percent to contribute $500 million to the pool.
By country source, the primary contributors to the growth in remittances during the month are the United States, accounting for 4.2 percentage points of the 12.7 percent aggregated growth; Canada, with 1.9 percentage points and Singapore with 1 percentage point.
The strong growth in the cash remittances in April 2018 brought the total cash remittances for the first four months of the year to $9.4 billion, up by 3.5 percent from the same four-month period last year.
By country source, the bulk of cash remittances during the period came from the US, Saudi Arabia, the United Arab Emirates, Japan, Singapore, United Kingdom, Canada, Germany, Qatar and Kuwait. The combined remittances from these countries accounted for almost 80 percent of total cash remittances.
Trade deficit still wider
Just this week, BSP officials said the country’s external position—which is expected to be weakened by the strong importation needs of the country due to the administration’s infrastructure overhaul—will continue to draw support from the “steady inflows” of remittances.
However, Cuyegkeng said that despite the surge of remittances in April, the $9.4-billion remittance stock of the country in the first four months of the year will still not be enough to cover for the trade deficit of the country.
“Unfortunately, the amount that such a growth represents still would not cover the worsening trade deficits. A 4.5-percent 2018 remittance growth and a weak export growth against a relatively strong import growth would not cover this year’s forecast trade deficit,” Cuyegkeng told the BusinessMirror in a response to a query on Monday.
“The shortfall in financing the trade deficit from remittances is likely to be close to $16 billion, larger than last year’s $13 billion,” he added.
In 2017 personal remittances to the Philippines reached $31.3 billion, accounting for 10 percent of gross domestic product and 8.3 percent of gross national income.
Image credits: Nonie Reyes