Overseas Filipinos remittances hit $2.93 B in November – BSP

MANILA –  Overseas Filipinos, mostly workers, including those in the United States and Canada, remitted to the country a total of $2.93 billion in November, according to the Bangko Sentral ng Pilipinas (BSP).

The remittance improved from $2.77 billion a year earlier but lower compared to the previous month’s $3.28 billion.

“The increase in personal remittances in November 2022 was due to higher remittances sent 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,” the BSP said in a statement.

Meanwhile, the local currency ended the week’s trade at 54.54 from the previous session’s 54.63.

It opened the day at 54.75 and traded between 54.83 and 54.44. Average level for the day stood at 54.639.

Volume reached US$1.05 billion, lower than day-ago’s US$1.25 billion.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso ended sideways partly on recession fears in the US, smaller but continued hikes in the Federal Reserve and Bangko Sentral ng Pilipinas’ (BSP) key rates, as well as possible cut in domestic banks’ reserve requirement ratio.

Of the total, money coursed through banks rose to $2.64 billion, higher than the $2.50 billion registered a year earlier. It was $2.91 billion in October. The year-on-year expansion in cash remittances was said to be due to growth in receipts from land- and sea-based workers.

On a year-to-date basis, cash remittances as of the end of November amounted to $29.38 billion, 3.3 percent higher than the year-ago $28.43 billion. The January-November personal remittances tally rose to $32.65 billion, up by 3.4 percent from $31.59 billion posted in the comparable 2021 period.

Growth in cash remittances from the United States, Saudi Arabia, Singapore and Qatar were said to have driven the rise in year-to-date remittances.

Meanwhile, growth of remittances being sent by overseas Filipino workers (OFWs) is seen to be affected by a possible recession in the US, with an economist noting also the impact of elevated inflation.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a report, traced the lower monthly cash remittance inflows partly to higher US dollar-Philippine peso exchange rate in the latter part of 2022 compared to the earlier part of the year.

The local currency was trading at 56-level against the greenback in around November last year while it was only at around 51-level at the start of 2022.

This factor, Ricafort said, “partly led to lower amount of U.S. dollars sent by OFWs to the country, given the higher equivalent of these remittances when converted to pesos.”

“Furthermore, higher prices/inflation also in host countries of OFWs could have also increased the cost of living of OFWs abroad, thereby partly reducing the amount sent to the country,” he said.

In the coming months, inflows are seen to also be affected by the possible recession in the world’s largest economy, he said.

“(This) could slow down remittances amid slower global trade/exports, investments/FDIs (foreign direct investment), employment, and other business/economic activities,” he said.

The economist, on the other hand, noted that continued reopening of countries hosting OFWs as well as recovery of these economies from the pandemic are seen to cushion any impact of the possible recession.

He said growth of remittances, which remain resilient amidst the repatriation of some OFWs in 2020 due to the pandemic, is seen to continue due to demand for Filipino workers in countries with aging population, among others.

“OFW remittances are still near record highs on a monthly basis, a bright spot for the Philippine economy in terms of spurring/supporting consumer spending, which accounts for at least 73 percent of the economy, and in turn, support faster GDP (gross domestic product)/economic growth,” he added. (Jennifer T. Santos)

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