Remittances up 3.2% in July — BSP

Personal remittances from overseas Filipinos in July grew 3.2 percent to $3.43 billion from $3.32 billion a year earlier as inflation rose again.

As a result, the Bangko Sentral ng Pilipinas (BSP) said total remittances in the first seven months reached $21.53 billion, a 3-percent increase from a year ago.

BSP data showed Friday that remittances from overseas workers with contracts of one year or longer rose 3.4 percent in July, while those from workers with less than one-year contracts grew slower by 1.7 percent.

Cash remittances through banks increased 3.1 percent to $3.08 billion in July, leading to a cumulative growth of $19.33 billion.

United States-based workers made the largest remittances with a 41.1-percent share, followed by Singapore with 6.9 percent and Saudi Arabia with 6 percent.

The July data came after inflation again rose that month to 4.4 percent from 3.7 percent in June and 3.9 percent in May, according to the Philippine Statistics Authority.

Cash remittances through banks increased 3.1 percent to $3.08 billion in July, leading to a cumulative growth of $19.33 billion.

Economists said the rise in the prices of goods was partly caused by super typhoon “Carina,” which damaged agricultural produce, houses and other personal belongings, and disrupted food transport and the delivery of utilities.

“The growth in remittances came as families back home needed to cope with relatively higher inflation,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corporation.

He said overseas Filipino workers (OFWs) continued to send funds back home to support the educational needs of their children.

Ricafort said remittances will likely sustain the growth as OFWs earn extra funds amid possible inflation and an interest rate downtrend in the United States.

“Household spending accounts for over 70 percent of the Philippine gross domestic product, and the reopening of the economy allows students to return to school and for more demand for tourism activities,” Ricafort said.

Reuters reported Monday that investors see a 52-percent chance the US Federal Reserve will cut its policy rate by 50 basis points this month after prices fell 2.5 percent in August, the lowest in three years.