October remittances hit 10-month high
Cash remittances from overseas Filipino workers (OFWs) rose by 3% in October, as migrant Filipinos sent more money home ahead of the holiday season.
Data from the Bangko Sentral ng Pilipinas (BSP) released on Friday showed cash remittances coursed through banks stood at $3 billion in October, higher than the $2.91 billion in the same month last year.
The amount of money sent by OFWs was the highest in ten months, or since the $3.16 billion in December last year.
Month on month, the 3% growth in cash remittances was faster than the 2.6% seen in September and marked the fastest pace in remittance growth since 3.7% in April.
“The growth in cash remittances in October 2023 was primarily due to increased receipts from both land- and sea-based workers,” the central bank said in a statement.
Land-based OFWs sent $2.4 billion in October, up by 3.1% from $2.33 billion in the same month last year.
Remittances from sea-based workers, on the other hand, rose by 2.5% to $600 million in October from $580 million a year ago.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said remittances typically increase in the fourth quarter due to holiday-related spending.
For the first 10 months of the year, cash remittances increased by 2.8% year on year to $27.49 billion.
The growth in cash remittances during the January-to-October period was driven mainly by inflows from the United States, Saudi Arabia, and Singapore.
By country source, the United States remained the biggest source of cash remittances at 41.5%. It was followed by Singapore (7%), Saudi Arabia (6%), Japan (5%), United Kingdom (4.8%), United Arab Emirates (4.1%), Canada (3.6%), Qatar (2.8%), Taiwan (2.7%), and Korea (2.5%).
Remittances from the top 10 countries accounted for 80% of the total during the 10-month period.
At the same time, BSP data showed personal remittances increased by 3.1% to $3.3 billion in October. This brought the 10-month tally to $30.57 billion, up by 2.9% from a year ago.
Mr. Ricafort said still-elevated inflation may have prompted migrant workers to send more money home to help their families cope with rising prices.
“OFW remittances have more peso equivalent for every US dollar sent, (which is) a source of consolation for OFWs and their families/dependents, especially in coping with higher prices/inflation, as well as to cope up with higher interest rate payments,” he said.
Headline inflation slowed to 4.9% in October from 6.1% in September, breaching the central bank’s 2-4% target for the 19th straight month.
In October, the Monetary Board raised borrowing costs by 25 basis points (bps) in an off-cycle move. This brought the benchmark interest rate to a 16-year high of 6.5%. The BSP has hiked interest rates by a total of 450 bps since May 2022.
Modest growth in cash remittances may continue in the coming months as families still need to cope with high inflation, Mr. Ricafort said.
The central bank expects remittances to grow by 3% this year. — Keisha B. Ta-asan