Cash sent by Filipino migrant workers slightly rebounded from its six-year-low slump in January this year—but remained below expectations in February this year, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday.
Overseas Filipino workers’ (OFWs) cash remittances that coursed through banks summed up to $1.88 billion in February 2015, 4.2 percent higher than the $1.8-billion remittances sent by OFWs in February last year.
This pushed the two-month total of remittances at $3.69 billion this year, growing at merely 2.4 percent from last year’s $3.604 billion—about $2.8 billion of these were from land-based workers, while $900 million were from sea-based workers.
While the month’s growth is a rebound from the disappointing 0.5- percent growth in January, it is still slower than the 5.9-percent growth rate seen in February last year.
The two-month cumulative growth of 2.4 percent is also slower from the same two-month cumulative growth in 2014 at 6 percent. It is also below the government’s annual remittance growth assumption at 5.5 percent and below market expectations during the period.
In previous research notes to its clients, Singapore based DBS Bank said remittances will likely return to about 5 percent in February, while Standard Chartered Bank forecasted a 4.5-percent growth to its clients.
The BSP said the slowdown of remittance growth in recent months could be due to the base effect, as remittances last year were relatively high because OFWs sent money intended for the rehabilitation and rebuilding efforts in Eastern Visayas due to the damage caused by Supertyphoon Yolanda (international code name Haiyan). Sought for a comment from the private sector, Bank of the Philippine Islands (BPI) economist Nicholas Antonio Mapa said the slower growth may also be caused by the recent developments in the global exchange rates.
“In the past few months, we’ve seen a strong US Dollar against major currencies like the euro and GBP [British pound]. As such, an overseas Filipino worker based in Europe may be sending home a fixed amount of euro or GBP, which would translate into a smaller US Dollar amount,” Mapa said. The remittance data of the Philippines is expressed in US dollars.
“However, since the peso has also been weakening against the US dollar, albeit at a lesser extent, the beneficiary is still able to enjoy a healthy peso-purchasing power to help drive consumption and investment in the country,” Mapa further said.
The BSP said the bulk of cash remittances came from the US, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong and Canada.
The central bank lauded the steady deployment of OFWs and the continued efforts of financial institutions to expand their market coverage to the sustained inflow of remittances to the country.
The BSP cited preliminary data from the Philippine Overseas Employment Administration which showed that approved job orders reached 164,525 for the first two months of the year. About a quarter of this were intended for service, production and professional, technical and related workers in Saudi Arabia, Kuwait, Taiwan, Qatar and the United Arab Emirates. Personal remittances —or all current transfers of Filipino migrant workers whether in cash or in kind—hit $2.078 billion in February to push the two-month total to $4.09 billion. This is 2.1 percent larger than the same two-month personal remittances last year.
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