7-month OFW remittances hit $20.9B

Filipinos living and working abroad continued to send more money to the Philippines in July as their families back home continued to struggle with inflation-driven price increases of basic commodities and services.

According to data released by the Bangko Sentral ng Pilipinas on Friday, personal remittances from overseas Filipinos workers rose by 2.5 percent to $3.32 billion in July 2023 from $3.24 billion in the same month last year.

Cash remittances coursed through banks amounted to $2.99 billion in July 2023, up by 2.6 percent from the $2.92 billion posted in the same month last year.

On a year-to-date basis, cash remittances reached $18.79 billion, a 2.9-percent increase from the $18.26 billion registered in the same period last year.

"The growth in personal remittances in July 2023 was due to higher remittances by land-based workers with work contracts of one year or more and sea and land-based workers with work contracts of less than one year," BSP said in a statement.

Cumulatively, personal remittances reached $20.91 billion in the first seven months of 2023, higher by 2.9 percent than the $20.33 billion in the comparable period in 2022.

The increase in cash remittances from the United States, Singapore, Saudi Arabia and United Arab Emirates contributed mainly to the hike in remittances in the first seven months of 2023.

In terms of source countries, the US posted the highest share of overall remittances during the period, followed by Singapore, Saudi Arabia and Japan.

Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the unusually high OFW remittances in July 2023 to tuition payments and other related spending in preparation for the start of the new school year.

"These education-related spending are considered compulsory in nature for many OFW families," he said in a Viber message.

"The growth in average OFW remittances year-on-year since the pandemic and over the past five years has been at 2 percent to 3 percent, consistent with the country's population growth and demographics," he added.

Ricafort said OFW remittances could continue at a similar pace year-on-year, similar to the gross domestic product, or GDP, growth in the coming months.

Likewise, he forecast that OFW remittances and conversions to pesos would increase in the fourth quarter, especially during the Christmas season towards the end of the year.