Cash remittances from overseas Filipino workers (OFWs) continued growth in May year-on-year, although these fell to a 12-month low since May 2024 amid US President Donald Trump's protectionist policies and a strengthening peso.

Data from the Bangko Sentral ng Pilipinas showed these remittances grew by 2.9 percent in May to $2.66 billion from the $2.58 billion recorded in the same month last year.

Month-on-month, cash remittances moved flat between April and May.

Funds from sea-based workers rose faster by 3.1 percent to $536 million, while those from land-based workers grew by 2.8 percent. However, the latter still sent the larger remittances amounting to $2.12 billion.

Cumulatively, cash remittances from January to May grew by 3 percent to $13.77 billion from $13.37 billion last year.

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The top source of these funds remained the United States, with a 40 percent share, followed by Singapore, which accounted for 7 percent, and Saudi Arabia, which made up 6 percent.

Despite the year-on-year growth, Rizal Commercial Banking Corporation chief economist Michael Ricafort said cash remittances slowed over 12 months, due likely to "slower US and global economy amid Trump’s tariffs.”

He said OFWs were forced to become more financially prudent as the tariffs continued to threaten job losses.

On 2 April, Trump announced his tariff rates for multiple countries, including the world's major manufacturing and exporting countries like China.

"Tariffs and other America-first policies could slow down global trade, investments and employment," Ricafort said.

"The Trump administration could also tighten immigration rules in the US in an effort to create and protect more jobs for US citizens," he added.

Fewer dollars

Ricafort also said the peso appreciation against the US dollar in May encouraged OFWs to send fewer dollars in exchange for higher amounts in pesos.

The local currency hit its strongest at P55.35 per dollar on 23 May.

Overall OFW remittances in May reached $2.97 billion, rising by 3 from $2.88 billion year-on-year.

Cumulatively, remittances stood at $15.34 billion, growing by 3 percent in the first five months.

Moving forward, Ricafort said remittances would continue to grow, although at a moderate pace, as families back home pay for their children's schooling in the second semester.

"Some OFWs also visit the Philippines from June to August during the school break in the US/Northern Hemisphere, which would also entail conversion to pesos of OFW money," he added.

However, Ricafort cautioned that stricter immigration rules could weigh on some OFW remittances, especially from the US.