By Luisa Maria Jacinta C. Jocson, Reporter
MONEY SENT HOME by abroad Filipino employees (OFWs) rose to a seven-month excessive in July, knowledge from the Bangko Sentral ng Pilipinas (BSP) confirmed.
Money remittances coursed by banks climbed by 3.1% to $3.085 billion from $2.992 billion a 12 months in the past, the central financial institution stated on Monday.
This was the best month-to-month degree because the $3.28 billion recorded in December 2023.
Month on month, remittances jumped by 7% from $2.882 billion in June.
“The enlargement in money remittances in July 2024 was because of the development in receipts from land- and sea-based employees,” the BSP stated.
Cash despatched house by land-based employees elevated by 3.6% 12 months on 12 months to $2.52 billion, whereas remittances from sea-based employees inched up by 0.9% to $567.996 million.
“Money remittances from OFWs have hit a brand new excessive. This surge is probably going attributable to components like financial restoration and bettering sentiment, tempering inflation, and improved remittance channels,” Safety Financial institution Corp. Chief Economist Robert Dan J. Roces stated in a Viber message.
The Philippine financial system grew by 6.3% within the second quarter, the quickest since 6.4% within the first quarter of 2023.
For the primary half of the 12 months, gross home product (GDP) enlargement averaged 6%. To fulfill the low finish of the federal government’s 6-7% development goal, the financial system should increase by a minimum of 6% within the second semester.
Headline inflation in July hit a nine-month excessive of 4.4%. In August, it slowed to three.3%, returning inside the BSP’s 2-4% annual goal.
The central financial institution expects inflation to proceed easing within the coming months.
“The newest month-on-month improve got here after some seasonal improve in remittances and conversion to pesos to partially finance some holiday-related spending throughout the college trip season amid higher climate situations,” Rizal Business Banking Corp. Chief Economist Michael L. Ricafort stated in a Viber message.
He added that July remittances rose on the again of school-related bills amid the beginning of the educational 12 months, which seemingly continued till August.
For the primary seven months, money remittances from OFWs rose by 2.9% to $19.332 billion from $18.785 billion a 12 months earlier.
“The expansion in money remittances from the US, Saudi Arabia and United Arab Emirates contributed primarily to the rise in remittances in January-July 2024,” the central financial institution stated.
America accounted for 41.1% of the money remittances recorded within the seven-month interval, adopted by Singapore (6.9%), Saudi Arabia (6%), Japan (5%) and the UK (4.9%).
Different prime sources of remittances had been the United Arab Emirates (4.2%), Canada (3.5%), Qatar (2.8%), and Taiwan and Korea (each at 2.7%).
The BSP expects money remittances to develop by 3% this 12 months.
Remittances proceed to be a “shiny spot” for the financial system, Mr. Ricafort stated.
He added that he expects sustained “modest” development in money remittances within the coming months as OFW households and dependents nonetheless want to deal with elevated inflation.
“The chance of an financial slowdown or perhaps a recession within the US, in addition to in different nations that host giant numbers of OFWs, partly attributable to aggressive Federal Reserve charge hikes since March 2022, would nonetheless be a drag for OFW remittances, particularly if there can be job losses for some OFWs,” he added.
PERSONAL REMITTANCES
In the meantime, BSP knowledge confirmed that non-public remittances from OFWs stood at $3.428 billion in July, rising by 3.2% from $3.321 billion a 12 months in the past.
“The rise in private remittances in July 2024 was attributable to greater remittances from land-based employees with work contracts of 1 12 months or extra and sea- and land-based employees with work contracts of lower than one 12 months,” it added.
Remittances from employees with greater than one-year contracts grew by an annual 3.4% to $2.72 billion, whereas cash despatched by OFWs with shorter than one-year contracts went up by 1.7% to $630 million.
Within the first seven months, private remittances rose by 3% 12 months on 12 months to $21.532 billion
