Personal remittances from overseas Filipinos (OFs) rose by 6.8 percent year-on-year in January 2014 to reach US$2.0 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1 The robust growth in personal remittances was driven by the steady increase in transfers of land-based workers with long-term contracts (4.9 percent), and sea-based and land-based workers with short-term contracts (9.1 percent). The solid growth of remittances is expected to provide support to the continued strength of the current account.
Likewise, cash remittances from overseas Filipinos coursed through banks increased by 5.9 percent year-on-year to US$1.8 billion. This compares with the US$2.2 billion recorded a month ago, i.e., in December 2013. It should be pointed out however that the level of remittances typically drops after the year-end holiday season. Remittances from both land-based (US$1.3 billion) and sea-based (US$450 million) workers expanded by 4.9 percent and 9.1 percent year-on-year, respectively. Cash remittances during the month came mostly from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, and Canada.2
Remittance flows from overseas Filipinos remained resilient, underpinned by the sustained demand for Filipino manpower overseas, particularly the skilled workers. Preliminary reports by the Philippine Overseas Employment Administration (POEA) indicated that 32.1 percent (or 24,187) of the total approved job orders of 75,348 in January 2014 were processed during the period. Processed job orders were intended mainly for manpower demand for service, production, and professional, technical and related job categories in Saudi Arabia, the United Arab Emirates, Taiwan, Kuwait and Qatar.
Moreover, the efforts of bank and non-bank remittance service providers to expand their international and domestic market coverage through their network of remittance business partners worldwide continued to support steady remittance flows.
1 The BSP started to release 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).
2 There are some limitations on the remittance data by source. A common practice of remittance centers in various cities abroad is to course remittances through correspondent banks, most of which are located in the U.S. Meanwhile, remittances coursed through money couriers cannot be disaggregated by actual country source and are lodged under the country where the main offices are located, which, in many cases is in Canada. Therefore, the U.S. and Canada would show up to be the main sources of OF remittances because banks attribute the origin of funds to the most immediate source.