Personal remittances from overseas Filipino workers (OFWs) reached $2.97 billion in April, higher by 4.1 percent compared to the $2.86 billion in the same month of last year.

Data from the Bangko Sentral ng Pilipinas showed the new April level emerged the highest in more than two years or since December 2022, but the lowest in 11 months or since May 2024.

The April level pushed up OFWs' cumulative remittances to $12.37 billion by 3 percent in the first four months of the year from $12.01 billion in 2024.

Remittances in the form of cash sent through banks grew to $2.66 billion in April, rising by 4 percent from $2.56 billion last year.

Cumulatively, cash remittances stood at $11.11 billion or 3 percent higher than the $10.78 billion recorded in the previous year.

"The growth could be driven by a stronger peso that necessitated the sending of more dollars. Families back home also sought funds to finance Holy Week-related spending," said Rizal Commercial Banking Corp. chief economist Michael Ricafort.

The United States remained the top source of remittances, representing 40.4 percent of the total remittances. This was followed by Singapore which had a 7.3 percent share and Saudi Arabia with 6.3 percent.

Ricafort said OFW remittances will likely sustain growth in the next few months as families back home continue to spend for their children's schooling which already started on 16 June.

"The country’s consumer spending accounts for nearly 75 percent of the economy. Families of overseas Filipino workers have been an important market for many products and services in the economy, including big-ticket items such as homes, vehicles, and investments," he added.

However, Ricafort said a strengthening US dollar against the peso might tame remittance levels as less dollars can be converted into more pesos.

According to the Bankers Association of the Philippines, the US dollar appreciated by 0.37 percent against the local currency in the past 30 days to P56-per-$1 levels.

Ricafort said risks to remittances growth include US President Donald Trump's trade and immigration policies.

"Trump’s threats of higher tariffs and other America-first policies could also slow down global trade, investments, and some jobs for overseas Filipinos," the economist said.

A higher US inflation could also slow remittances inflows as OFWs in the western country strive to stretch their budgets. A survey by Reuters revealed analysts project US businesses to pass reciprocal tariffs to consumers in the second half of the year. 

The US Bureau of Labor Statistics reported the offshore inflation slightly rose by 0.1 percent in May, although slower than analysts' expectations.

"The latest Israel-Iran conflict could be another potential headwind for OFW remittances for the coming months," Ricafort said.

According to the Department of Foreign Affairs, at least four Filipinos in Israel were injured after the country was hit by Iran's missiles last week.