Cash remittances posted the slowest growth in 13 months in February following the re-imposition of restrictions here and abroad amid the resurgence of COVID-19 cases, the Bangko Sentral ng Pilipinas said Monday.
Data showed cash remittances coursed through banks increased 1.3 percent to $2.509 billion in February from $2.476 billion in the same month in 2021. The growth was the slowest on a monthly basis in over a year since the 1.7-percent decline in January 2021.
“The expansion in cash remittances was due to the increase in receipts from land-based and sea-based workers, which grew by 1.2 percent to $2.007 billion from $1.983 billion, and 1.6 percent to $501 million from $493 million, respectively,” the BSP said.
The figure brought cash remittances in the first two months to $5.177 billion, up 1.9 percent from $5.078 billion a year ago.
The growth in cash remittances from the United States, Japan and Singapore contributed largely to the increase in remittances in the first two months of 2022.
Data showed that in terms of country sources, the US registered the highest share of overall remittances at 41.6 percent in the first two months, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar and Malaysia. The combined remittances from these 10 countries accounted for 79.3 percent of total cash remittances during the period.
Personal remittances, which include non-cash items, grew by 1.2 percent to $2.793 billion in February 2022 from $2.759 billion a year earlier. The expansion in February increased the cumulative personal remittances to $5.759 billion in the first two months, up 1.9 percent from $5.653 billion registered in the comparable period in 2021.
“The growth in personal remittances in February 2022 was slower, however, compared to that in January at 2.5 percent due in part to the re-imposition of restrictions in OFW host countries and the Philippines amid resurgence in COVID cases across the globe,” the BSP said.
Remittances sent by land-based workers with work contracts of one year or more went up by 1.3 percent to $2.18 billion from $2.152 billion in the same month last year. Inflows from sea- and land-based workers with work contracts of less than one year grew by 1.5 percent to $547 million from $538 million.
Remittances hit a record $31.418 billion in 2021, up 5.1 percent from $29.903 billion in 2020. The BSP forecasts a 4-percent growth in 2022 remittances, consistent with its long-term growth trend.
The BSP cited key factors underpinning the strength of remittances. These include increased global demand for OFWs, particularly medical practitioners, health care workers and skilled labor in construction and housekeeping.
It also noted that the Department of Labor and Employment signed bilateral labor agreements with host countries to continue allowing entry of OFWs. Other factors are the increased use of digital financial services in remittance transfers; higher subscription to digital remittance services; and OFWs tendency to maintain a proportion of their remittances in Philippine pesos for their families’ upkeep.
Remittances were equivalent to roughly 8 percent to 9 percent of nominal gross domestic product. They were also equivalent to about 32 percent to 37 percent of income from exports of goods and services, and 26 percent to 37 percent of gross international reserves.