Philippines: OFW Remittances in December Hit Record High

OFW Bangko Sentral ng Pilipinas

PHILIPPINES – Remittances made by overseas Filipino workers (OFW) reached a new record high in December to US$2.8 billion, representing a 3.6% increase from a year ago, according to the country’s central bank.

The Bangko Sentral ng Pilipinas (BSP) said Wednesday that the December data for OFW remittances sent the full-year personal remittances to US$29.7 billion, or a 4.9% rise from a year ago.

“It also exceeded the projected growth of 4 percent for the year,” said BSP Officer-in-Charge Diwa C. Gunigundo.

The growth in personal remittances was steered by the 7.6 percent expansion in remittances from land-based workers with work contracts of one year or more, which totaled US$23.2 billion.

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This made up for the 3.7 percent decline in remittances from sea-based and land-based workers with work contracts of less than one year to reach US$6.1 billion.

Likewise, OFWs’ cash remittances coursed through banks are at a historic high of US$2.6 billion in December 2016, representing a 3.6 percent increase year-on-year.

US tops OFW remittance in December

The top countries that contributed to the increase in total cash remittances during the month were the United States (US), Qatar, and Japan. Full-year cash remittances posted a growth of 5.0 percent to reach US$26.9 billion.

The higher cash remittances in 2016 were driven by the US$21.3 billion transfers from land-based workers, which grew by 7.6 percent year-on-year.

Meanwhile, sea-based workers’ remittances declined by 3.8 percent to US$5.6 billion. This may have been due partly to stiffer competition in the supply of seafarers, particularly from East Asia and Eastern Europe.

Cash remittances in 2016 continued to increase on the back of improving global economic conditions.

Remittances from the Middle East increased by 12.7 percent, driven by growth in remittances from Qatar, Kuwait, Oman, and the United Arab Emirates (UAE).

Remittances from Asia rose by 7.4 percent, buoyed by transfers originating from Singapore, Japan, China, and Taiwan.

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For the Americas, which increased by 3.8 percent, the major contributor was the 6.2 percent growth in remittances from the US.

Meanwhile, remittances from Europe fell by 8.4 percent, owing to the decline in cash transfers from the United Kingdom (UK) (partly due to the depreciation of the pound sterling vis-à-vis the US dollar), Italy, and the Netherlands.

By country source, more than 80 percent of the total remittances came from the US, Saudi Arabia, UAE, Singapore, UK, Japan, Qatar, Kuwait, Hong Kong, and Germany.
The solid growth in OF remittances continues to be a major driver of domestic demand.

In 2016, personal remittances represented 8.1 percent of the country’s gross national income (GNI) and 9.8 percent of gross domestic product (GDP). –