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

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

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

Land-based workers grew cash remittances by 3.7 percent, while those of sea-based workers slightly rose by 0.6 percent.

U.S. remittances

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

The 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 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, said prices of goods and services have remained high since 2022, forcing OFWs to still send more remittances.

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

Utilities, clothing, recreation, personal care, and restaurant and hotel services slightly declined by 0.1 percentage point.

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.

Stricter immigration policies, higher tariffs

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 US due to possible shortage of raw materials and labor force.

However, the economist said certain professionals might remain safe from 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.