GROWTH in remittances from Filipinos abroad slowed to 2.4 percent in February, the slowest in seven months, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP).
On Monday, BSP said the data showed this was the slowest since July 2022 when remittances posted a year-on-year growth of 2.3 percent. In the first two months of the year, cash remittances grew 3 percent.
The level of cash remittances also reached P2.569 billion, the lowest level since May 2022 when remittances amounted to P2.425 billion. In the January to February period, remittances amounted to P5.331 billion.
“The first two months were perhaps a window period as developed countries try to ward off threats of being in a recession,” Institute for Migration and Development Issues (IMDI) Executive Director Jeremaiah M. Opiniano told the BusinessMirror. “For as long as developed countries’ economic growth levels remain in positive territory, hopefully cash remittances will remain steady.”
The slower growth of remittances, Opiniano said, could be seasonal similar to the prepandemic period. Remittances would tend to post faster growth at the start of school years or during Christmas and tend to slow after these major expenses.
Opiniano noted, however, that the latest data from the BSP’s Consumer Expectations Survey (CES) showed more OFWs and their families were saving. He said more households may have greater motivation to save following the negative impact of the pandemic.
Some 43 percent or almost half of OFW households were able to use remittances to save in the first quarter of 2023. This was the highest since the first quarter of 2020 when it was at 44.7 percent. (full story: https://businessmirror.com.ph/2023/04/17/food-education-medicine-still-top-expenses-of-ofws/)
“Since the third quarter of 2020 to the fourth quarter last year, CES survey data show that allotments to savings have reached at least 29 percent, or nearly a third,” Opiniano said.
“All the more that the savings habit should be accelerated among these exponential income earners from abroad.”
Inflation in host countries
Meanwhile, Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael Ricafort said the slowdown in OFW remittances data may reflect the higher prices or inflation in host countries abroad.
Ricafort added that the weaker peso exchange rate versus the US dollar compared to year-ago levels may also account for the slowdown.
He stressed that the peso has seen 8- to 9-percent depreciation compared to levels before the Russia-Ukraine war started in February 2022.
“For the coming months, single-digit/modest growth in OFW remittances could continue as OFW families/dependents still need to cope with relatively higher prices/inflation locally,” Ricafort said.
“[This] would require the sending of more remittances, as well as some normalization of spending by consumers/households for both essentials and non-essentials,” he added.
BSP traced the slight expansion in cash remittances in February 2023 to the growth in receipts from land- and sea-based workers.
On a year-to-date basis, cash remittances coursed through banks in January-February 2023 amounted to $5.33 billion, up by 3 percent from $5.18 billion recorded in the same period a year-ago.
The growth in cash remittances from the United States, Saudi Arabia, Singapore and Qatar contributed mainly to the increase in remittances in January-February 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.
“There are some limitations on the remittance data by source. A common practice of remittance centers in various cities abroad is to course remittances through correspondent banks, most of which are located in the US,” the BSP said.
“Therefore, the US would appear to be the main source of OF remittances because banks attribute the origin of funds to the most immediate source,” it added.
Meanwhile, personal remittances from Overseas Filipinos (OFs) rose
by 2.4 percent to $2.86 billion in February 2023 from $2.79 billion recorded in the same month last year.
Personal remittances, BSP said, covers cash sent through banks and informal channels as well as remittances in kind.
The expansion in February 2023 remittances increased the cumulative personal remittances to $5.93 billion in the first two months of 2023, which is 3 percent higher than the $5.76 billion in the comparable period in 2022.
Image credits: Andrii Zastrozhnov | Dreamstime.com
