Personal remittances from overseas Filipinos (OFs) in December 2012 expanded by 9.7 percent year-on-year, the highest monthly growth registered in 2012, to reach US$2.2 billion, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. announced today.1 This positive development brought the full-year personal remittances to US$23.8 billion, higher by 6.4 percent compared to the level recorded in the same period of the previous year. Growth in remittances was driven by higher personal transfers from land-based overseas Filipino workers (OFWs) with work contracts of one year or more (by 13.3 percent), as well as sea-based workers and land-based workers with short-term contracts (by 11.6 percent).
Meanwhile, cash remittances from overseas Filipinos coursed through banks reached US$21.4 billion for the full year 2012, posting an annual growth of 6.3 percent and exceeding the BSP’s full-year growth projection of 5 percent. In particular, remittances from both sea-based (US$4.8 billion) and land-based workers (US$16.6 billion) grew by 11.4 percent and 4.9 percent, respectively. Primary sources of remittances were the U.S. (42.6 percent of total cash remittances), Canada (9.2 percent), Saudi Arabia (8.1 percent), the United Kingdom (5 percent), Japan (4.7 percent), the United Arab Emirates (4.5 percent), and Singapore (4.1 percent).
The resilience of overseas Filipino remittances continues to support the country’s economic growth and development. In 2012, cash remittances from overseas Filipinos coursed through banks represent about 6.5 percent of the country’s Gross National Income (GNI) and 8.5 percent of Gross Domestic Product (GDP). Remittances continue to draw strength from the increasing demand for a wider range of skilled Filipino workers abroad, mostly in the Middle East. In particular, preliminary reports by the Philippine Overseas Employment Administration (POEA) indicated that a total of 13,485 approved job orders for January 2013, that were mostly for service, production, and professional, technical and related workers, were processed in response to the manpower requirements in Saudi Arabia, the United Arab Emirates, Taiwan, Qatar, and Kuwait. The POEA also reported that workers with processed contracts and those awaiting deployment reached 1,737,087 for the first ten months of 2012, higher by about 8.6 percent than the level recorded in the same period last year.
Meanwhile, the expanding network of bank and non-bank service providers across the globe has improved the capture of remittances through formal channels and boosted remittance flows further. As of end-December 2012, commercial banks’ established tie-ups, remittance centers, correspondent banks and branches/representative offices abroad increased to 4,750 from 4,723 in the previous year.
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).