Filipino overseas workers, often referred to as Overseas Filipinos or OFWs, form a vital part of the Philippines’ global diaspora. These dedicated individuals leave their homeland to seek employment opportunities abroad, contributing significantly to their families’ well-being and the nation’s economy through the remittances they send back home.
Remittances play a crucial role in supporting education, healthcare, and various other essential needs, making them a cornerstone of the country’s financial stability and growth.
Cash remittances from Overseas Filipinos reached $18.785 billion in the January to July timeframe, marking a 2.9 percent increase compared to the same period last year when it stood at $18.264 billion. This data was revealed in a report from the central bank released on September 15.
Additionally, the Bangko Sentral ng Pilipinas (BSP) data indicated that when compared to the end of June this year, cash remittances transmitted through formal banking channels experienced a substantial rise of 18.94 percent, reaching $15.793 billion.
The 2.9 percent year-on-year growth remains consistent with the growth rate reported at the conclusion of the first half of 2023. This stability reflects a consistent flow of U.S. dollars being remitted by OFWs to their families in the Philippines.
During the first seven months of the year, the majority of cash remittances, accounting for 41.3 percent, originated from Filipinos residing in the United States. A smaller portion, 6.9 percent, was sent from Singapore, followed by 5.9 percent from Saudi Arabia, five percent from Japan, and 4.8 percent from the United Kingdom. This distribution is influenced by the fact that many correspondent banks used by remittance centers are based in the United States, leading to its consistent ranking as a top source of remittances.
In July alone, cash remittances reached $2.992 million, marking a 2.6 percent increase compared to the same month the previous year when it stood at $2.917 billion. This growth was attributed to increased remittances from both land-based and sea-based workers. In July, land-based workers sent $2.43 billion, reflecting a 2.7 percent year-on-year increase, while sea-based workers remitted $560 million, a 1.9 percent rise from the previous year.
Year-to-date figures reveal that land-based workers sent a total of $14.98 billion, reflecting a 3.1 percent year-on-year increase, while sea-based workers remitted $3.81 billion, marking a two percent year-on-year rise. The Bangko Sentral ng Pilipinas (BSP) tracks both cash and personal remittances, with cash remittances forming the basis for the BSP’s projected three percent growth in remittances for 2023.
As of the end of July, personal remittances amounted to $20.911 billion, signifying a 2.9 percent increase compared to the same period in 2022 when it stood at $20.236 billion. Personal remittances encompass an Overseas Filipino’s net compensation, including personal transfers and capital transfers between households, which are not recorded by the banking system.
In July alone, personal remittances experienced a 2.5 percent uptick, reaching $3.321 billion, compared to $3.240 billion in the corresponding month of the previous year. According to BSP data, individuals with contracts lasting one year or more transferred $2.63 billion as personal remittances, marking a 2.6 percent year-on-year increase, while those with contracts of less than one year sent home $620 million, reflecting a 2.3 percent rise from the prior year.
In the year-to-date analysis, individuals with longer work contracts sent a total of $16.24 billion, representing a three percent increase compared to the previous year. On the other hand, those with shorter work contracts remitted $4.17 billion, marking a 2.4 percent year-on-year rise.
According to the July Consumer Expectations Survey (CES) conducted by the BSP, remittances continue to primarily serve essential purposes such as covering food and household expenses, supporting education, and addressing medical costs, as observed during the second quarter of this year.
(Source: Lee Chipongian | Manila Bulletin)
