2013 remittances reach $22.8 billion
Cash remittances from overseas Filipinos amounted to $22.8 billion in 2013, 6.4 percent higher compared to the previous year, according to the Bangko Sentral ng Pilipinas (BSP).
Remittances exceeded the BSP’s forecast of five percent increase for 2013. Last year’s remittances growth was also higher than end-2012’s 6.3 percent over 2011. For 2014, the central bank is keeping the five percent growth projection but also sees it climbing up to six percent if the developed economies’ recovery pushes through.
The BSP said that cash remittances — these are fund transfers coursed through the banking channels — for the month of December alone recorded its highest level of $2.2 billion, up 9.1 percent year-on-year.
The BSP noted that cash transfers from both land-based and sea-based workers grew by six percent and 7.9 percent, respectively. “Moreover, cash remittances from land-based workers accounted for more than three-fourths (77.1 percent) of total cash transfers,” it added. Countries such as the US, Saudi Arabia, the United Kingdom, the United Arab Emirates, Singapore, Canada, and Japan continue to contribute the biggest source of remittances.
The central bank also reported that in 2013, overseas Filipinos’ personal remittances grew 7.6 percent to $25.1 billion. For the month of December alone, this grew 12.5 percent to $2.4 billion. Personal remittances are coursed through so-called informal channels including the “padala” system.
The BSP said the “sustained rise in personal remittances during the year was driven by the robust growth in remittances of land-based workers with work contracts of one year or more (6.1 percent) and transfers of sea-based workers and land-based workers with short-term contracts (7.8 percent).”
As a consumption-led economy, the strength of remittances continue to support economic activity. The BSP said in 2013, remittances ratio to GDP was 8.4 percent. “Remittances remained robust on the back of strong demand for skilled Filipino manpower abroad, particularly in the Middle East,” it said.
Data from the Philippine Overseas Employment Administration (POEA) showed that last year, the number of deployed workers totalled 1.8 million while approved job orders reached 793,415 of which 40.9 percent were processed job orders mainly for services, production, and professional, technical, and related workers. “These job orders were intended for the manpower requirements of Saudi Arabia, the UAE, Kuwait, Taiwan, Hong Kong, and Qatar,” the BSP cited POEA data. In a January report, British bank Standard & Chartered Bank said the local economy could expect stronger support from remittances this year as overseas Filipinos increase the amount of funds they send home.
“We expect remittance growth to accelerate in the near term (and also) expect stronger global growth to boost the incomes of Filipinos overseas and thus their ability to remit more to the Philippines,” Stanchart economists said.