Remittances from overseas Filipino workers (OFWs) reached a record $38.34 billion, up 3 percent for the full year of 2024 from $37.21 billion the previous year, data from the Bangko Sentral ng Pilipinas revealed Monday.

In December, remittances also peaked at $3.73 billion, 3 percent higher than $3.62 billion in the same month of 2023.

Of the total remittances, cash remittances sent through banks grew by 3 percent to $34.49 billion.

Cash remittances from land-based workers grew by 3.7 percent, while those from sea-based workers slightly rose by 0.6 percent.

Most remittances came from the United States, which accounted for 41 percent of the total, followed by Singapore with 7 percent and Saudi Arabia with 6 percent.

Full-year remittances contributed 8.3 percent to the country's gross domestic product.

Rizal Commercial Banking Corporation chief economist Michael Ricafort attributed the higher growth in remittances to Christmas spending amid elevated domestic inflation and a weaker Philippine peso against the US dollar.

"Net increase in the US dollar by about 13 percent versus the peso over the past three years would require the sending of lower amounts of remittances to pay for the amount of expenses in pesos," he said.

The economist, however, noted that prices of goods and services have remained high since 2022, forcing OFWs to send more remittances.

Inflation accelerated to 2.9 percent in the past two months, up from 1.9 percent in September last year, driven by higher prices of food, alcoholic drinks, and transport, according to data from the Philippine Statistics Authority.

Utilities, clothing, recreation, personal care, and restaurant and hotel services saw slight declines of 0.1 percentage point.

Ricafort said stricter immigration policies and higher tariffs on US imports under President Donald Trump could slow remittances as OFWs face higher inflation in the Western country due to potential shortages of raw materials and labor force.

However, the economist said certain professionals might remain unaffected by Trump's protectionist immigration rules.

"The Philippines has been the world’s biggest source of seafarers and nurses for many years. Remittances are still expected to similarly grow, going forward, also due to the country's demographics," Ricafort said.