Cash remittances hit $2.98B in Aug.

By Katherine K. Chan

MONEY SENT HOME by overseas Filipino workers (OFW) went up by 3.2% year on year in August, as the weaker peso drove up the value of remittances, data from the Bangko Sentral ng Pilipinas (BSP) showed.

In a statement, the BSP said cash remittances coursed through banks increased by 3.2% to $2.977 billion in August from $2.885 billion in the same month last year.

Despite the annual growth, remittances declined by 6.4% month on month from the seven-month high of $3.179 billion in July.

The August tally was the lowest in three months or since the $2.658-billion remittances in May.

“Cash remittances from overseas Filipinos continued to grow… This developed on account of higher inflows from both land-based and sea-based workers,” the BSP said in a statement on Wednesday.

Money sent home by land-based workers climbed by 3% year on year to $2.35 billion in August, accounting for the bulk of cash remittances.

Remittances from sea-based workers likewise rose by 3.8% year on year to $626 million in August.

“Cash remittances rose 3.2% year on year in August to $2.98 billion, supported by steady overseas employment and resilient inflows from key markets like the US, Singapore, and Saudi Arabia,” Union Bank of the Philippines�� Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

Robert Dan J. Roces, an economist at SM Investments Corp., said the 3.2% year-on-year increase in cash remittances in August indicates a “modest pickup” versus the 3% growth in July.

“This suggests that remittance flows have some resilience despite global headwinds, and reflects, in part, a lower comparative base or mild fluctuations in monthly flows,” he said in a Viber message.

Mr. Roces said the weak peso drives higher remittances in dollar terms as recipients “gain more local-currency value.”

“Evidence from BSP studies have highlighted the positive role of exchange rate depreciation as a driver of remittances,” he added.

In August, the peso averaged P57.2525 versus the greenback, weakening from the P56.7523-per-dollar average in July.

On the other hand, Mr. Asuncion said the month-on-month dip in remittances reflects “seasonal normalization after back-to-school spending and a less volatile peso.”

Meanwhile, personal remittances, which include both cash coursed through banks and informal channels as well as in-kind remittances, stood at $3.307 billion in August, rising by 3.2% from $3.204 billion a year earlier.

Workers with contracts of one year and above sent home the bulk of personal remittances at $2.54 billion, up 3% year on year.

Personal remittances from workers with contracts of less than one year also rose by 4% year on year to $690 million.

EIGHT-MONTH PERIOD
In the eight months to August, cash remittances from migrant Filipinos climbed by 3.1% to $22.909 billion from the $22.217 billion posted in the same period last year.

Remittances from land-based workers grew by 3.3% year on year to $18.32 billion as of end-August, while sea-based OFW remittances rose by 2.5% to $4.59 billion.

Money sent home from the United States accounted for 40.4% of the remittances in the first eight months of the year.

This was followed by Singapore (7.1%), Saudi Arabia (6.3%), Japan (4.9%) the United Kingdom (4.8%), the United Arab Emirates (4.5%), Canada (3.4%), Qatar (2.9%), Taiwan (2.8%) and South Korea (2.6%).

Meanwhile, personal remittances went up by 3.1% to $25.51 billion in the eight-month period from $24.74 billion the previous year.

“With year-to-date growth slightly ahead of target and holiday inflows ahead, remittances remain on track to meet BSP’s full-year growth forecast,” Mr. Asuncion said.

Mr. Roces said remittances typically rise in the September-to-December period, which may boost the full-year tally.

The BSP expects cash remittances to grow by 3% to $35.5 billion this year.