Remittances reached a six-month high in June, driven partly by higher inflation that required the sending of more money by Filipinos working overseas to their dependents in the country.
Data from the Bangko Sentral ng Pilipinas on Tuesday showed that cash remittances coursed through banks amounted to $2.81 billion in June, up by 2.1 percent from $2.75 billion posted in the same month last year. This was also the highest value since it hit $3.159 billion in December 2022.
“The expansion in cash remittances in June 2023 was due to the growth in receipts from land- and sea-based workers,” the BSP said in a statement.
This brought cash remittances in the first half of the year to $15.79 billion, up 2.9 percent from $15.35 billion a year ago.
“The growth in cash remittances from the United States, Singapore and United Arab Emirates contributed mainly to the increase in remittances in the first half of 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,” the BSP said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the continued growth of remittances could be considered “a good signal or bright spot for the overall economy… as the Fed recently signaled reduced odds of recession in the US, which is the world’s largest economy.”
Ricafort said the continued growth in remittances might have to do with the relatively higher prices or inflation that also required the sending of more OFW remittances to their families in the Philippines.
“For the coming months, a single-digit growth in OFW remittances could still continue as OFW families still need to cope up with relatively higher inflation locally that would require the sending of more remittances, as well as some normalization of spending by consumers for both essentials and non-essentials as the economy reopened towards greater normalcy,” Ricafort said.
Personal remittances, which include non-cash items, also increased 2.2 percent to $3.13 billion in June from $3.06 billion a year earlier.
“The rise in personal remittances in June 2023 was due to higher remittances sent by land-based workers with work contracts of one year or more, and sea- and land-based workers with work contracts of less than one year,” the BSP said.
Cumulative personal remittances grew 3.0 percent to $17.59 billion in the first half of 2023 from $17.09 billion in the comparable period in 2022.