MONEY sent by Filipino migrant workers contracted anew in August this year, reversing the growth gains seen in the previous month.
The Bangko Sentral ng Pilipinas (BSP) reported on Monday that overseas Filipino workers (OFW) remittances declined by 0.9 percent in August this year to hit $2.48 billion during the month, from the $2.5-billion inflow seen in the same month in 2017.
This brought the total OFW cash remittance inflows in the first eight months of the year to $19.06 billion, only 2.5 percent higher than 2017’s $ 18.6 billion.
The government projects a 4-percent rise in remittances on average for 2018. August is the third month for 2018 where remittance inflows declined. In March remittances went down by 9.8 percent, while a 4.5-percent decline was seen in June.
The Bangko Sentral ng Pilipinas traced the contraction in August largely to the decline of remittances from the United Arab Emirates (UAE), Saudi Arabia and Qatar.
The BSP had earlier said the repatriation program of the government—thousands of workers were sent home owing to conflict in their host country, or serial abuses, or to take advantage of amnesties for undocumented workers—partly dented the remittance flows in previous months.
During the first two months of 2018, a total of 4,149 OFWs were repatriated from the UAE, Saudi Arabia and Kuwait.
The BSP also quoted Philippine Overseas Employment Administration data, showing that the number of deployed land-based workers dropped by 3.28 percent year-on-year, while that of the sea-based workers fell by 14.62 percent.
ING Bank Manila economist Nicholas Mapa said the contraction in year-on-year terms shows that the seasonality in remittances continues to shift, mainly due to school-year changes, as well as to possible late payments to workers.
“Nuances in exchange rates may have also caused the discrepancy, given yearly growth rates,” he added.
Filipino migrant workers are usually seen to adjust their transfers based on the strength or weakness of the peso, with a weaker peso allowing them to send fewer dollars due to the increased peso purchasing power.
Data from the BSP showed the peso averaged trade at 53.27 to a dollar in August 2018, weaker by about P3 from the 50.87 to a dollar in the same month last year.
ING Bank, however, expects remittances to grow by about 3 percent on average for the year. This is lower than the government’s projection.
Image credits: Paul Hilton/Bloomberg News