Economic recovery buoys Philippine remittances in May

Money sent home by overseas Filipino workers (OFWs) rose by 13 percent in May as businesses dampened by the pandemic were starting to crawl their way back to recovery.

According to a BusinessWorld report quoting preliminary data from the Bangko Sentral ng Pilipinas (BSP), cash remittances rose to $2.38 billion, up by 13 percent from the $2.106 billion registered in the same period last year. 

The higher remittances were owed to the 16 percent increase in receipts from land-based OFWs at $1.894 billion. Meanwhile, sea-based workers sent home $488 million, up 2.7 percent year-on-year.

In total, cash remittances from January to May were at $12.28 billion, higher by 6.3 percent than the $11.554 billion recorded in the same period last year.

Notably, there was an increase in remittances from the United States, Malaysia, Singapore, Canada, and South Korea.

However, the largest source of remittances remained the US, followed by Singapore, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Canada, South Korea, Qatar, and Taiwan.

BusinessWorld quoted an economist as saying that higher remittances were due to the slowly reopening economies.

In addition, the report said that OFW workers benefited from the improving recovery prospects in the US coupled with the rebound in oil demand, helping them to send money back home.

The downside risk, however, remained with the Delta variant of the coronavirus disease and the threat of new lockdowns.

Meanwhile, the BSP said that personal remittances—which accounted inflows in kind—jumped by 13.3 percent to $2.652 billion during the month from the $2.341 billion posted a year ago. This brought the five-month tally to $13.68 billion, an increase of 6.6 percent from the $12.835 billion a year earlier.

The central bank was projecting cash remittances to grow by 4 percent this year after the 0.8 percent decline in 2020.

Image by Florante Valdez from Pixabay.