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Money sent home by overseas Filipino workers (OFW) jumped to its highest level in seven months in July, but not enough to increase the amount year-to-date, data from the Bangko Sentral ng Pilipinas showed ( BSP) on Tuesday.
Personal remittances (personal transfers in cash or in kind and capital transfers between households) stood at $ 3.08 billion in the month, an increase of 12.71 percent and 7.6 percent from $ 2, 73 billion in June and $ 2.86 billion in July 2019, respectively.
The amount was the highest since the $ 3.12 billion registered last December.
“The growth was attributed to a 12.6 percent increase in remittances from land-based workers with employment contracts of one year or more to $ 2.467 billion in July 2020 from $ 2.192 billion in July 2019,” said the central bank in a statement.
Workers’ remittances at sea fell 9.2 percent from $ 557 million in July from $ 613 million a year ago, mainly due to “the repatriation of [these] workers amid ongoing Covid-19 (coronavirus 2019) pandemic. “
The latest figure was unable to support the year-to-date figure, which only hit $ 18.65 billion, a 2.4 percent decline from $ 19.11 billion in the same period in 2019.
Cash remittances, which only count money passing through banks, reached $ 2.78 billion in July, an increase of 12.9 percent from $ 2.46 billion the previous month and 7.8 percent. from $ 2.58 billion a year earlier.
The BSP attributed the improvement to “a 12.6 percent increase in remittances from land workers, but this was slightly offset by a 9.2 percent decrease in remittances from maritime workers.”
During the first seven months, cash remittances fell 2.4 percent to $ 16.80 billion from $ 17.21 billion a year earlier.
“Cash remittances from land and maritime workers continued to be lower than their levels in 2019 by 1.5 percent to $ 13,232 billion from $ 13,429 billion, and 5.8 percent to $ 3.57 billion from $ 3,789 billion. million, respectively, “said Bangko Sentral.
By country source, annual remittances to date from the United States, Japan, Singapore, Qatar, and Taiwan were countries that recorded continued growth, while declines were seen in Saudi Arabia, the United Arab Emirates, Germany, Kuwait, and the United Kingdom. United.
The United States had the largest share of total OFW remittances from January to July with 40.1 percent. It was followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Qatar, Hong Kong and Taiwan.
“Combined remittances from these countries accounted for 78.9 percent of total cash remittances,” the central bank said.
In a comment, ING Bank Manila senior economist Nicholas Antonio Mapa attributed the latest remittance figures to the lifting of strict closures in host countries, “allowing FOs to return to work and remit funds after being trapped. in their homes for an extended period of time. hour.”
“[Another] reason for the 7.8 percent increase in [cash] the remittances could be attributed to exchange rate nuances with the US dollar falling significantly against world currencies, inflating remittances sent home in EUR (euro) and JPY (Japanese yen) in dollar terms, ”he said.
Despite this, Mapa expects remittances to weaken or moderate as labor market challenges and layoffs make it difficult for foreign workers to send more funds home.
The Bangko Sentral forecasts that these inflows will decline by 5 percent this year “mainly due to the large repatriation of workers and the major economic shocks in the host countries.”
Next year, he expects remittances to recover by 4 percent.
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