Remittances grow 2.5%; $3.2B in June

Personal remittances from overseas Filipinos rose by 2.5 percent to $3.21 billion in June from $3.13 billion recorded in the same month last year, a report by the Bangko Sentral ng Pilipinas showed Thursday night.

This grew January to June remittances to $18.1 billion, higher by 2.9 percent from $17.59 billion seen a year ago.

The results came after inflation hovered near the least desired BSP inflation target of 4 percent and after the BSP kept its high policy rate for commercial banks at 6.5 percent.

Of the total in June, cash remittances sent through banks increased 2.5 percent to $2.88 billion.

Land-based workers transferred a total of $2.45 billion back home, up by 2.5 percent from $2.29 billion posted last year.

Meanwhile, sea-based workers grew cash remittances by 2.1 percent to about $540 million from around $520 million last year.

Bulk of remittances

The bulk of personal remittances in the first half of the year came from the United States with 40.9 percent share, followed by Singapore with 6.9 percent, and Saudi Arabia with 6 percent.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said US-based overseas Filipino workers will likely send more money back home in the next several months as US inflation falls.

The US Labor Department reported offshore inflation growth in July settled at 0.2 percent from the June level, marking the lowest increase since March 2021.

“Offsetting risk factors include higher cost of living for OFWs themselves,” he said.

Aggressive rate hikes

“Aggressive Federal Reserve’s rate hikes since March 2022 in an effort to bring down inflation back to its target of 2 percent would also be a drag for OFW remittances,” Ricafort continued.

To support US economic growth, The Associated Press (AP) reported The Federal Reserve will likely reduce its interest rates toward the end of the year.

“Economists widely expect the Federal Reserve’s first rate cut to occur in mid-September, and will be followed by additional cuts in November and December,” AP shared.