Cash remittances up 3.1% in April

By Luisa Maria Jacinta C. Jocson, Reporter

CASH REMITTANCES from overseas Filipino workers (OFWs) rose by 3.1% year on year in April, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

Data from the central bank showed cash remittances coursed through banks increased to $2.562 billion from $2.485 billion a year ago.

However, it was the lowest level in 11 months or since $2.494 billion in May 2023.

Month on month, remittances were 6.4% lower than $2.738 billion in March.

The year-on-year growth in cash remittances was also the fastest since 3.8% in December.

“The expansion in cash remittances in April 2024 was due to growth in receipts from both land- and sea-based workers,” the BSP said.

Money sent home by land-based workers went up by 3.2% to $2 billion while remittances from sea-based workers edged higher by 2.8% to $560 million.

From January to April, cash remittances rose by 2.8% to $10.782 billion from $10.487 billion a year ago.

“The growth in cash remittances from the United States, Saudi Arabia and Singapore contributed mainly to the increase in remittances in the first four months of 2024,” it said.

The United States accounted for 41.1% of overall remittances in the first four months. It was followed by Singapore (7%), Saudi Arabia (6%), Japan (5.1%) and the United Kingdom (4.5%).

Other sources of remittances were the United Arab Emirates (4.2%), Canada (3.2%), Qatar (2.8%), Korea (2.7%) and Taiwan (2.7%).

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the continued growth in remittances is a “bright spot” for the economy.

“Further reopening of the economy towards greater normalcy also led to increased spending, with some pent-up demand or even some revenge spending by OFW families,” he said in a Viber message.

Mr. Ricafort said the recent peso depreciation might have reduced the need for OFWs to send more remittances denominated in US dollars and other foreign currencies. 

In April, the peso closed at the P57 level for the first time since November 2022. The currency further depreciated to the P58-per-dollar level in May.

“As OFW remittances have more peso equivalent for every US dollar sent, (this is) a source of consolation for OFWs and their families and dependents, especially in coping with higher prices and interest rate payments since 2022 for any amortization or form of debt payment,” Mr. Ricafort said.

Meanwhile, BSP data showed that personal remittances from OFWs also went up by 3.1% to $2.859 billion in April from $2.773 billion a year ago.

Remittances from workers with more than one-year contracts rose by 3% to $2.16 billion year on year, while money sent by OFWs with shorter than one-year contracts increased by 3.6% to $620 million.

In January-April, personal remittances rose by 2.8% to $12.01 billion.

“For the coming months, single-digit or modest growth in OFW remittances would continue as OFW families still need to cope with relatively higher prices locally that would require the sending of more remittances,” Mr. Ricafort added.

The BSP expects cash remittances to grow by 3% this year.