Remittance growth hits 9-month low

Money sent home by migrant Filipinos rose 2.6% in March from a year earlier, the Bangko Sentral ng Pilipinas (BSP) said on Thursday, though this was the slowest growth in nine months.

Cash remittances from overseas Filipino workers (OFW) coursed through banks hit USD 2.81 billion (PHP 156.8 billion) from USD 2.74 billion a year ago.

Remittances from land-based workers increased 3.1% to USD 2.22 billion, while money sent home by sea-based workers inched up 1% to USD 595 million.

In the first quarter, cash remittances rose 2.7% to USD 8.44 billion from a year earlier. Money sent home by land-based workers jumped by 3.2% to USD 6.74 billion, while sea-based workers’ remittances went up 1% to USD 1.7 billion.

“The growth in cash remittances from the United States, Singapore, Saudi Arabia and the United Arab Emirates (UAE) was the main driver of the overall increase in remittances for January to March,” the BSP said.

The US was the top remittance source in the first quarter, accounting for 40.7% of the total. It was followed by Singapore (7.6%), Saudi Arabia (6.2%), Japan (4.9%), the UAE (4.6%), UK (4.4%), Canada (3.1%), Qatar (2.8%), Taiwan (2.8%) and Hong Kong (2.7%).

“Cash remittances rose in March and the first quarter largely due to sustained demand for Filipino labor abroad, particularly in healthcare, engineering and domestic services,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

He also cited seasonal factors such as the Lenten break and school-related expenses, which might have driven remittances during the quarter.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the continued single-digit growth in remittances is a “bright spot for the overall economy, as an important growth driver, especially in terms of consumer spending.”

BSP data showed personal remittances, which include inflows in kind, increased 2.6% to USD 3.13 billion in March from a year ago.

Personal remittances from workers with contracts of a year or more climbed 3% to USD 2.4 billion during the month, while those from workers with contracts of less than a year went up 1.4% to USD 660 million.

Personal remittances for the last quarter rose 2.7% to USD 9.4 billion from a year ago.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said remittances this year would likely grow 2.5% to 3% despite external headwinds. “We see remittances as resilient and still expect robust growth.”

The central bank expects cash remittances to grow 2.8% this year.

“Despite global uncertainties, remittances continue to show resilience, serving as a critical support for household consumption and a buffer for the country’s external accounts,” Mr. Rivera said.

On the other hand, Mr. Ricafort flagged the impact of US President Donald J. Trump’s tighter immigration policy on remittance flows.

“For the coming months, protectionist policies of President Trump, particularly stricter immigration rules, could weigh on some OFW remittances, especially from the US,” he added.

Mr. Trump kicked off an aggressive immigration campaign after taking office in January, declaring illegal immigration an “invasion” to boost deportations. – Luisa Maria Jacinta C. Jocson, Senior Reporter