Cash remittances grew 1.8 percent in May to $2.43 billion from $2.38 billion a year ago, as countries that host overseas Filipino workers continue to recover from the global health crisis, data from the Bangko Sentral ng Pilipinas show.
The latest figure brought cash remittances in the first five months to $12.59 billion, up 2.5 percent from $12.28 billion recorded in the same period last year.
“The expansion in cash remittances in May 2022 was due to the growth in receipts from land-based and sea-based workers. In terms of country source, the growth in cash remittances from the United States, Saudi Arabia, Japan, Qatar and Singapore contributed largely to the increase in remittances in the first five months of 2022,” the BSP said in a statement Friday.
Personal remittances, which include non-cash items, reached $2.70 billion in May, or 2 percent higher than the $2.65 billion posted in the same month last year.
This resulted in the 2.5-percent increase in personal remittances to $14.02 billion in the first five months from $13.68 billion a year ago.
“The increase in personal remittances in May 2022 was due to 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.
Cash remittances hit a record $31.418 billion in 2021, up 5.1 percent from $29.903 billion in 2020. The actual expansion missed the 6-percent growth target for the year, but it was an improvement from the 0.8-percent contraction in 2020 at the start of the pandemic.
The BSP expects full-year remittance growth at 4 percent, consistent with its long-term growth trend.
It said among the factors underpinning the strength of remittances are increased global demand for OFWs, particularly medical practitioners, health care workers and skilled labor in construction and housekeeping and the Department of Labor and Employment’s bilateral labor agreements with host countries to continue allowing the entry of OFWs.
Other reasons are the increased use of digital financial services in remittance transfers to reinforce the upward trend of digital adoption in both domestic and cross-border transactions; higher subscription to digital remittance services; and the tendency of OFWs to maintain a proportion of their remittances in Philippine pesos for their families’ upkeep, particularly for basic spending needs.
Remittances were equivalent to roughly 8 percent to 9 percent of nominal gross domestic product in recent years. They were also about 32 percent to 37 percent of income from exports of goods and services and 26 percent to 37 percent of gross international reserves.
