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MONEY TRANSMITTED home by Filipinos overseas surged in June, reaching a six-month peak, propelled by remittances from land-based workers, the Bangko Sentral ng Pilipinas (BSP) reported.
Cash remittances channeled through banks rose by 3.7% year over year to $2.99 billion in June, up from $2.88 billion, the BSP noted on Friday.
This marked the highest level of monthly remittances recorded in six months, surpassing the $3.38 billion registered in December of the prior year.
The yearly growth rate also accelerated from the 2.9% observed in May, when remittances totaled $2.66 billion.
“Cash remittances sent to the Philippines continued to expand in June of this year, with contributions from land-based overseas Filipinos (OFs) rising more swiftly than those from sea-based OFs,” the central bank stated.
Funds sent home by land-based overseas Filipino workers (OFWs) increased by 3.7% annually to $2.43 billion in June, accounting for the majority of the total.
Remittances from sea-based OFWs also grew by 3.5% to $555 million that month.
“The growth in cash remittances resulted in an increase in personal remittances as well,” the BSP remarked.
Personal remittances, which encompass both cash routed through banks and informal methods as well as in-kind transfers, rose by 3.7% to $3.33 billion in June, up from $3.21 billion a year earlier.
Workers with contracts lasting one year or more recorded personal remittances totaling $2.63 billion, an increase of 3.6% year on year, while those with contracts shorter than one year sent home $610 million in cash and goods, jumping by 3.9% from the prior year.
FIRST HALF
In the first half of the year, cash remittances from migrant Filipinos increased by 3.1% to $16.75 billion compared to $16.25 billion logged in the same period the previous year.
Remittances sent home by land-based workers grew by 3.3% annually to $13.38 billion in the six months ending June, while contributions from sea-based OFWs rose by 2.2% to $3.38 billion.
The United States remained the leading source of cash remittances in the first half, representing 40.1% of the total.
This was followed by Singapore (7.1%), Saudi Arabia (6.2%), Japan (5%), the United Kingdom (4.9%), the United Arab Emirates (4.3%), Canada (3.3%), Qatar (2.9%), Korea (2.8%), and Taiwan (2.7%).
Meanwhile, personal remittances during the January-to-June timeframe reached $18.67 billion, an increase of 3.1% from $18.1 billion a year earlier.
Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., stated that the rise in cash remittances was “driven by persistent demand for Filipino labor abroad and enhanced remittance avenues.”
“The expansion was primarily led by land-based workers, especially in the Middle East and North America, where the labor market remains strong,” Mr. Asuncion noted.
“It illustrates ongoing resilience in global labor markets, particularly in the US and Middle East, alongside seasonal boosts related to school enrollment and mid-year expenditures,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, similarly indicated.
He added that more favorable exchange rates in destination countries might have encouraged overseas Filipinos to remit more funds back home.
The peso exchanged at the P55 to P57 range against the US dollar in June, sharply declining mid-month as tensions escalated between Israel and Iran, with US involvement also noted before a temporary ceasefire was established. Nevertheless, the strength of the dollar that month was tempered by dovish expectations regarding the US Federal Reserve.
The BSP projects cash remittances to grow by 2.8% this year. — Katherine K. Chan
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