Money sent home by millions of Filipinos living and working overseas continues to provide financial buffer against the impact of the global pandemic.
Data from the Bangko Sentral ng Pilipinas show that remittances from overseas Filipino workers increased 6.4 percent in the first six months of 2021 to $14.918 billion from $14.019 billion a year ago, as the global economy showed recovery from the lingering impact of the pandemic.
The six-month remittance figure also surpassed the pre-pandemic level of $14.64 billion in the same period in 2019.
The BSP said in a statement the growth in cash remittances in the six-month period came mostly from the United States, Malaysia and South Korea. The US posted the highest share in overall remittances at 40.1 percent, followed by Singapore, Saudi Arabia, the United Kingdom, Japan, the United Arab Emirates, Canada, South Korea, Qatar and Taiwan.
The combined remittances from these top 10 countries accounted for 78.4 percent of the total.
Data showed that in June, cash remittances rose 7 percent to $2.638 billion from $2.465 billion in the same month last year, on higher receipts from land-based workers by 7.1 percent and sea-based workers by 6.5 percent. It was also higher than the pre-pandemic figure of $2.29 billion in June 2019.
Personal remittances, which include non-cash items, also expanded by 6.7 percent in the first half to $16.616 billion from $15.573 billion a year earlier. In June, personal remittances went up by 7.3 percent to $2.936 billion from $2.737 billion.
“The rise in total personal remittances in June was due to the remittances sent by land-based workers with work contracts of one year or more, which grew by 7.1 percent, and sea-based workers with work contracts of less than one year which increased by 6.4 percent,” the BSP said.
Cash remittances slightly declined by 0.8 percent last year amid the pandemic to $29.903 billion from the record $30.133 billion in 2019. This was better than the earlier forecast of a 20-percent contraction by some analysts at the onset of the pandemic.
The BSP expects cash remittances to grow by 4 percent this year, taking into account the brighter global economic outlook amid the rollout of COVID-19 vaccines and reopening of major economies.
Remittances support the country’s balance of payments, contributing nearly $30 billion a year and helping stabilize the value of the peso against the US dollar. These offset the country’s widening trade deficit which reached more than $40 billion in 2019, before narrowing to $24.5 billion in 2020.
These foreign exchange inflows also support various sectors of the economy, including banking, real estate, education, transportation, travel, tourism, retail, and healthcare.
BSP Governor Benjamin Diokno expects cash remittances to grow by 4 percent this year, a reversal of the 0.8-percent decline in 2020.