Personal remittances from overseas Filipino workers (OFWs) declined by 6.8 percent to $3.02 billion in February compared to January as households back home received less funds due to the strengthening peso and slower spending after the Christmas and New Year season.

The Bangko Sentral ng Pilipinas reported Tuesday that cash remittances in February declined from $3.24 billion in January but marked a 2.6-percent increase from the $2.95 billion in February last year.

Over a longer period, OFW remittances sent through banks rose by 2.7 percent to $2.72 billion.

Land-based workers remained the primary contributors, sending $2.19 billion — a 3-percent increase. Meanwhile, sea-based workers accounted for around $520 million, up 1.2 percent year-on-year.

The United States remained the top source of cash remittances, accounting for 41 percent from January to February, followed by Singapore at 8 percent and Saudi Arabia at 6 percent.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said the peso appreciated against the US dollar by 12 percent in the past three years.

“This increased the peso equivalent of OFW remittances, resulting in the sending of lower amounts of remittances in US dollars,” he said.

According to the Bankers Association of the Philippines, the local currency strengthened toward P57.850/$1 in February from a peak of P59.009 in January.

Ricafort said the lower remittances month-on-month reflected an “expected” slower household consumption.

“This was in view of the normalization in OFW remittances and conversion to pesos after the Christmas and New Year season, the time for the biggest spending by consumers,” he said.

Last December, total remittances were at their highest at $3.73 billion.

Moving forward, Ricafort said remittances could continue to grow by nearly 3 percent monthly, as the Philippine economy remains heavily driven by household consumption, which accounts for at least 70 percent of economic activity.

However, he noted that remittance growth could slow if US-based workers face higher inflation, as companies may pass on the cost of Trump-imposed tariffs to consumers.

“The Trump administration could tighten immigration rules in the US in an effort to create and protect more jobs for US citizens, which could potentially slow down OFW remittances from the US,” the economist added.

If Trump tariffs lead to a global trade war, Bank of the Philippine Islands chief economist Jun Neri said the peso might depreciate to P60/$1 and increase US inflation due to a supply shortage of raw materials.

In the first two months, OFW remittances reached $6.27 billion, higher by 2.7 percent than the $6.10 billion recorded in the same period last year.