By means of Luisa Maria Jacinta C. Jocson, Reporter
CASH TRANSFERS of Overseas Filipino workers (OFW) rose 2.7% in October, the slowest growth in four months, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Central bank data shows remittances rose to $3.08 billion in October, up from $3 billion in the same month a year ago.
The growth in the number of remittances was the weakest since the 2.5% in June this year. October was also the first time in four months that growth fell below 3%.
“The expansion was reflected in remittances from both agricultural and maritime workers,” the BSP said.
Remittances sent by land-based workers rose 3.2% year on year to $2.48 billion, while money sent by offshore workers rose 0.6% to $602.35 million.
Personal remittances, including in-kind inflows, also rose 2.7% to $3.42 billion in October, compared to $3.33 billion a year ago.
Remittances from workers on contracts of one year or longer rose 3% to $2.68 billion, while money sent home by workers on contracts of less than a year rose 1.3% to $670 million .
In the January-October period, remittances grew 3% to $28.3 billion, compared to $27.49 billion a year earlier.
At the end of October, remittances from land-based workers rose 3.4% to $22.62 billion, while those from offshore workers rose 1.4% to $5.69 billion.
“The growth in remittances from the United States, Saudi Arabia, Singapore and the United Arab Emirates mainly contributed to the increase in remittances in January-October 2024,” the BSP said.
The US accounted for 41.2% or the largest share of total remittances in the ten-month period.
This was followed by Singapore (7.1%), Saudi Arabia (6.2%), Japan (4.9%) and the United Kingdom (4.8%).
Other major sources of remittances include the United Arab Emirates (4.3%), Canada (3.5%), Qatar (2.8%), Taiwan (2.8%) and South Korea (2.5%) .
Meanwhile, personal remittances rose 3% to $31.49 billion at the end of October, compared with $30.57 billion in the same period a year ago.
John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the latest data on remittances reflects global uncertainty.
“First, there are global economic uncertainties. Economic challenges in host countries, such as inflationary pressures or slower economic growth, may have reduced disposable income for OFWs, limiting the amount they can remit,” he said.
Geopolitical tensions in key remittance sources such as the Middle East, Europe and the United States also impacted remittance flows, he added.
Mr. Rivera said October typically sees slower growth in remittances “while OFWs prepare to send larger amounts closer to the holidays (e.g., November and December).”
Meanwhile, Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said the weaker peso during the month “would have required sending fewer OFW remittances to pay for the same amount of expenses in pesos, which in turn would have led to slower annual figures. year-on-year growth in OFW remittances.”
The peso devalued from P56.03 per dollar at the end of September to P58.1 against the dollar at the end of October.
Remittances will continue to rise for the rest of the year, especially during the holidays.
“In the coming months, growth may accelerate in November and December due to the holidays. Sustained demand for OFWs in high-income countries and potential easing of inflation globally could also support a recovery,” Rivera said.
On the other hand, Mr. Ricafort cited risk factors such as the new Trump administration’s strict immigration policies that could dampen remittances next year.
“Possible protectionist policies of newly elected US President Donald J. Trump, who takes office on January 20, 2025, that could tighten US immigration rules in an effort to create and protect more jobs for US citizens, potentially slowing immigration be delayed. OFW remittances from the US,” he added.
The central bank expects remittances to grow by 3% this year and in 2025.