Home Business Remittances increased by 3.3% in November

Remittances increased by 3.3% in November

by trpliquidation
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Remittances from Filipinos abroad

By means of Luisa Maria Jacinta C. Jocson, Reporter

MONEY SENT HOMEseas Filipino workers (OFW) rose 3.3% year-on-year in November due to the peso’s depreciation against the U.S. dollar, the Bangko Sentral ng Pilipinas (BSP) said.

Central bank data shows remittances through banks rose 3.3% to $2.81 billion in November, compared with $2.72 billion in the same month a year ago.

However, November’s remittances were the lowest in six months or since the $2.58 billion posted in May.

Month-on-month, remittances fell 8.7%, down from $3.08 billion in October.

BSP data shows remittances sent by land-based workers rose 3.9% year-on-year to $2.22 billion in November, while money sent by offshore workers rose 1% to $585,505 million dollars.

Meanwhile, personal remittances, including in-kind inflows, rose 3.5% to $3.12 billion in November, compared with $3.02 billion a year earlier.

Remittances from workers on contracts of one year or longer rose 3.7% to $2.4 billion, while money sent home by workers on contracts of less than a year rose 1.7% to $650 million.

PERIOD OF 11 MONTHS
In the January to November period, remittances rose 3% to $31.11 billion, compared to $30.21 billion a year earlier.

“Remittances are expected to increase by 3% for the full year 2024,” the central bank said.

Remittances at the end of November accounted for 90.2% of the BSP’s full-year projection of $34.5 billion.

“The growth in remittances from the United States, Saudi Arabia, Singapore and the United Arab Emirates (UAE) mainly contributed to the increase in remittances in January-November 2024,” the central bank said.

“In terms of country sources, the US accounted for the largest share of total remittances between January and November 2024, followed by Singapore and Saudi Arabia.”

The United States accounted for 40.9% of total remittances in the eleven-month period, followed by Singapore (7.1%), Saudi Arabia (6.3%), Japan (5%) and the United Kingdom (4.7%).

Other major sources of remittances were the UAE (4.4%), Canada (3.5%), Qatar (2.9%), Taiwan (2.8%) and South Korea (2.5%).

Personal remittances also rose 3% to $34.61 billion at the end of November, compared to $33.59 billion a year ago.

Analysts said the recent depreciation of the peso may have affected remittances during the month.

“For the month of November, the exchange rate between the US dollar and the peso largely fluctuated at the P58-59 level, compared to the P56-58 level in the previous month, slightly increasing the peso equivalent of OFW remittances,” says Rizal Commercial Banking Corp. chief economist Michael. said L. Ricafort.

Mr. Ricafort said this would “reduce the need to send more OFW remittances in US dollars/other foreign currencies to pay the same amount in pesos.”

The peso closed at P58.62 against the dollar at the end of November, weakening 52 centavos from the P58.10 at the end of October.

The local unit also fell twice during the month to a record high of P59 per dollar.

“The peso experienced a depreciation, which indicated more pesos for the same foreign currency,” said Leonardo A. Lanzona, an economics professor at Ateneo de Manila University.

“Remittances mainly come from recipients meeting their basic needs. The sender may have figured out that they don’t need to send more money to meet the needs of their family here,” he added.

Mr Ricafort also added that the higher cost of living in host countries of OFWs could have reduced remittances back home.

For December, Mr Ricafort said remittances were likely to increase during the holidays.

“OFW remittances could rise in December given the expected seasonal surge during the Christmas and New Year holidays, the largest household expenditure in a normal year,” he said.

The central bank expects remittances to grow by 3% in 2024 and 2025.

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