Personal remittances from overseas Filipinos (OFs) breached the US$2 billion mark for the seventh consecutive month in October to post an all-time high of US$2.3 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1 This represented an 8.8 percent year-on-year rise in personal remittances, the highest annualized monthly growth rate recorded in 2013. On a cumulative basis, personal remittances from OFs reached US$20.5 billion in January-October 2013, higher by 6.8 percent than the level recorded in the comparable period last year. The sustained rise in personal remittances was driven mainly by the 5.5 percent increase in remittances from land-based workers with work contracts of one year or more, accounting for more than three-fourths (75.5 percent) of total transfers for the first ten months of the year. Transfers from sea-based workers and land-based workers with short-term contracts likewise rose by 7.5 percent.
Similarly, cash remittances from OFs coursed through banks grew robustly by 7 percent year-on-year to reach record-high level of US$2.1 billion in October. For the period January-October 2013, cash remittances totaled US$18.5 billion, or 6 percent higher than the level registered in the same period in 2012. Cash transfers from both land-based (US$14.2 billion) and sea-based workers (US$4.3 billion) grew by 5.5 percent and 7.5 percent, respectively. The major sources of cash remittances were the United States, Saudi Arabia, the United Kingdom, the United Arab Emirates, Singapore, Canada, and Japan.2
Sustained demand for skilled and professional Filipino manpower overseas supported the steady rise in remittances for the first ten months of the year. Preliminary data from the Philippine Overseas Employment Administration (POEA) indicated that approved job orders totaled 675,966 for January-October 2013, of which about two-fifths (39.7 percent) were processed job orders mainly for services, production, professional, technical, and related workers. The main countries of destination were Saudi Arabia, the United Arab Emirates, Kuwait, Taiwan, Hong Kong, and Qatar. Moreover, the continued presence of bank and non-bank service providers in foreign countries through tie-ups and remittance centers contributed to strong remittance flows.
1 As defined in 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 of capital purposes, such as for construction of residential houses, between resident and non-resident households without anything of economic value being supplied in return).
2 Data may not be truly reflective of the actual source of remittance of OFs. The common practice of remittance centers in various cities abroad is to course remittances through correspondent banks mostly located in the U.S. On the other hand, remittances coursed through money couriers cannot be disaggregated into their actual country source and are lodged under the country where the main offices are located, that is, Canada. Therefore, U.S. and Canada appear to be the main sources of OF remittances because banks attribute the origin of funds to the most immediate source.