Personal remittances from overseas Filipinos (OFs) amounted to US$2 billion in June 2012, rising by 4.2 percent from the level posted in the same month a year ago, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1 On a cumulative basis, remittances for the first half of the year reached US$11.3 billion, higher by 5.3 percent than the level registered in the same period last year. The steady uptrend recorded during the six-month period was supported by higher personal remittances from land-based OF workers (OFWs) with work contracts of one year or more (by 2.7 percent), as well as sea-based workers and land-based workers with short-term contracts (by 13.7 percent).
Meanwhile, cash remittances from OFs coursed through banks totaled US$10.1 billion in the first half of 2012, posting a year-on-year growth of 5.1 percent. Fund transfers from land-based workers at US$7.8 billion and sea-based workers at US$2.3 billion registered increments of 2.8 percent and 13.6 percent, respectively. During the six-month period, the countries which largely contributed to the continued growth in cash remittances were the U.S., Japan, Germany, the United Arab Emirates, and Hong Kong. While cash remittances from most countries in the euro area (e.g., Greece, Ireland, Spain, Portugal, among others) posted downtrends as a result of the interlocking sovereign debt and banking crisis, higher remittances were registered in some countries in the non-euro area, notably the United Kingdom.
In terms of the share to total remittances in the first six months of the year, the leading country sources were the U.S. (42.8 percent), Canada (9.6 percent), Saudi Arabia (7.6 percent), Japan (5.0 percent), the United Kingdom (4.8 percent), Singapore (4.2 percent), and the United Arab Emirates (4.1 percent).
The sustained growth in the deployment of OFWs was the key contributory factor to the upswing seen in remittance flows. Preliminary data from the Philippine Overseas Employment Administration (POEA) revealed that for the period January-December 2011, the number of workers deployed overseas increased by 14.8 percent to 1,687,831 from 1,470,826 in the same period a year ago. Nearly 80 percent of the total number of deployed OFWs were land-based workers (1,318,727), more than 25 percent of which were newly hired workers (437,720). The leading destinations of the land-based workers (new hires and rehires) were Saudi Arabia, the United Arab Emirates, Singapore, Hong Kong, and Qatar. Data from the POEA also showed that in January-July 2012, approved job orders aggregated 472,261, of which about 35 percent consisted of processed job orders for services, professional, technical, and production and related workers. The bulk of processed job orders were intended for the manpower requirements in Saudi Arabia, United Arab Emirates, Qatar, Kuwait and Taiwan.
Another factor that helped shore up OF remittances was the continued expansion of bank and non-bank remittance providers that enabled the wider capture of a larger share of the global remittance market.
1 The BSP started the release of data on personal remittances in June 2012. As defined in the Balance of Payments Manual, 6th Edition (BPM6), personal remittances represent the sum of net compensation of employees (i.e., gross earnings of overseas Filipino (OF) workers with work contracts of less than one year, including all sea-based workers, less taxes, social contributions, and transportation and travel expenditures in their host countries), personal transfers (i.e., all current transfers in cash or in kind by OF workers with work contracts of one year or more as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines), and capital transfers between households (i.e., transfers of fixed assets and financial assets that arise from the migration of individuals from one economy to another).