Remittances posted its slowest growth in seven months amid the slowdown in global economic activities and the risk of recession in the United States.
Data from the Bangko Sentral ng Pilipinas on Monday showed that money sent home by Filipinos working overseas rose 2.4 percent in February to $2.57 billion from $2.51 billion in the same month last year. It was the slowest expansion since it went up 2.3 percent in July 2022.
“The expansion in cash remittances in February 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 two months to $5.331 billion, up 3 percent from $5.177 billion 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 to February 2023. Meanwhile, in terms of country sources, the US posted the highest share of overall remittances during the said period, followed by Singapore, Saudi Arabia, and Japan,” the BSP said.
Personal remittances, which include non-cash items, rose 2.4 percent to $2.86 billion in February from $2.79 billion a year earlier. The increase 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.
Cumulative personal remittances reached $5.93 billion in the first two months of 2023, or 3.0 percent higher than $5.76 billion a year ago.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said in a text message that remittances in February decelerated to new nine-month lows in terms of value since May 2022.
He said the risks of recession in the US, which is the world’s largest economy, slowed down US/global economic growth and activities [that] and weighed on job generation, including those for OFWs.
He said other factors were the high inflation in host countries for OFWs that reduced remittances back to the Philippines and the weakness of the peso against the greenback.
Security Bank Corp. chief economist Robert Dan Roces said inflation in the US was “squeezing the ability of senders to send amounts versus the usual.”
“Around 45 percent of remittances come from the US on average, and so the slowdown in the US this year may mean slower remittance growth on net,” Roces said.
Roces said was also expecting a tempered remittances in the coming months, and “we can expect remittances to get outsized once again nearer the Christmas holidays.”