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Personal Remittances Continue to Breach US$2.0 Billion Mark in May, Reach US$9.7 Billion in January-May 2013

07.15.2013

Personal remittances from overseas Filipinos (OFs) exceeded the US$2.0 billion mark for the second consecutive month in May 2013, rising by 6.2 percent year-on-year to reach US$2.1 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today. 1  This brought cumulative remittances for the first five months of 2013 to US$9.7 billion, higher by 6.4 percent than the level registered in the comparable period last year.  The steady increase in personal remittances during the five-month period was driven largely by remittance flows from land-based OF workers (OFWs) with work contracts of one year or more. Remittances of OFWs with long-term contracts amounted to US$7.2 billion, accounting for about three-fourths (or 74.4 percent) of personal remittances for January-May 2013. On the other hand, remittances from sea-based and land-based workers with short-term contracts reached US$2.3 billion. The remaining US$0.2 billion of total personal remittances for the first five months of the year consisted of transfers from Filipinos who have migrated abroad.

Meanwhile, cash remittances from overseas Filipinos coursed through banks for the first five months of 2013 reached US$8.8 billion, 5.6 percent higher than the level posted in the same period last year.  Remittances from both sea-based (US$2.1 billion) and land-based workers (US$6.7 billion) expanded by 9.2 percent and 4.5 percent, respectively. Cash remittances during the January-May 2013 period came mostly from the U.S. (43.9 percent), Saudi Arabia (8.0 percent), the United Kingdom (5.4 percent), the United Arab Emirates (4.8 percent), Singapore (4.8 percent), Canada (4.3 percent), and Japan (3.1 percent).

Remittances remained robust due to sustained strong demand for skilled Filipino manpower overseas.  Latest reports from the Philippine Overseas Employment Administration (POEA) showed that one-third of the 431,394 approved job orders in January-June 2013 were already processed.  These processed job orders for services, production, and professional, technical and related workers were mainly intended for the manpower requirements of Saudi Arabia, United Arab Emirates, Kuwait, Hong Kong, and Qatar.  Meanwhile, efforts of bank and non-bank remittance service providers to expand their international and domestic market coverage has also supported the inflow of remittances.

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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., transfers of fixed assets and financial assets that arise from the migration of individuals from one economy to another).

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