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Personal Remittances Reach US$5.6 Billion in January-March 2013

05.15.2013

Personal remittances from overseas Filipinos (OFs) continued to rise in March 2013, registering a 3.7 percent year-on-year growth to reach US$1.9 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1 This brought the cumulative remittances for the first quarter of 2013 to US$5.6 billion, higher by 6.2 percent than the level registered in the comparable period in 2012.  The steady increase in personal remittances during the quarter was driven by robust remittance flows from both land-based OF workers (OFWs) with work contracts of one year or more (US$4.2 billion), as well as sea-based workers and land-based workers with short-term contracts (US$1.3 billion).

Meanwhile, cash remittances from overseas Filipinos coursed through banks for the first three months of 2013 reached US$5.1 billion, 5.6 percent higher than the level posted in the same period last year.  Remittances from both sea-based (US$1.2 billion) and land-based workers (US$3.9 billion) expanded by 6.1 percent and 5.4 percent, respectively.  Primary sources of remittances during the January-March 2013 period were the U.S.  (42.6 percent of total cash remittances), Canada (8.2 percent), Saudi Arabia (7.9 percent), the United Kingdom (5.7 percent), the United Arab Emirates (4.5 percent), Singapore         (4.2 percent), and Japan (3.7 percent).

Remittances remained strong partly on account of sustained demand for skilled Filipino workers overseas.  Latest reports from the Philippine Overseas Employment Administration (POEA) indicated that approved job orders totaled 292,483 in  January-April 2013, of which about 27 percent consisted of processed job orders mainly for services, production, and professional, technical and related workers.  These processed job orders were largely intended for the manpower requirements of Saudi Arabia, United Arab Emirates, Qatar, Hong Kong, and Kuwait.  Continued efforts by the government to promote the welfare of OFWs are expected to boost remittances further.  The Department of Labor and Employment (DOLE) reported that the POEA and the German Federal Employment Agency entered into a bilateral labor agreement on 18 March 2013 regarding the placement of Filipino health care professionals for employment in Germany.  The agreement provides, among other things, for favorable working conditions for Filipino health care professionals, similar with those granted to comparable German professionals.

The expanding operations of remittance service providers across the globe are also expected to allow a broader capture of remittances through the formal channels.  As of end-March 2013, commercial banks’ established tie-ups, remittance centers, correspondent banks and branches/representative offices abroad reached 4,750 from 4,732 in the comparable period last year.

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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., the provision of resources for capital purposes, such as for construction of residential houses, between resident and non-resident households without anything of economic value being supplied in return).

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