Personal remittances from overseas Filipinos (OFs) increased by 5.2 percent year-on-year to US$2.1 billion in April 2014. On a cumulative basis, personal remittances rose by 6.2 percent reach US$8.2 billion in January – April 2014 relative to the same period last year, the Bangko Sentral ng Pilipinas announced today.1 The sustained growth in personal remittances during the first four months of 2014 was due mainly to the steady increase in remittance flows from both land-based workers with long-term contracts (5 percent) and sea-based and land-based workers with short-term contracts (8.3 percent).
Meanwhile, cash remittances from OFs coursed through banks grew by 5.2 percent year-on-year to US$1.9 billion in April 2014. This brought cash remittances for the first four months of the year to US$7.4 billion, higher by 5.8 percent than the level recorded in the comparable period in 2013. Cash remittances from both land-based (US$5.6 billion) and sea-based (US$1.8 billion) workers rose by 5 percent and 8.3 percent year-on-year, respectively, during the January-April 2014 period. The major sources of cash remittances were the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, and Hong Kong.2
Remittance flows remained robust on the back of sustained demand for skilled Filipino workers. Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that in January-April 2014, approved job orders totaled 319,888, of which 24.9 percent were processed job orders intended for service, production, and professional, technical and related workers in Saudi Arabia, the United Arab Emirates, Taiwan, Kuwait, and Qatar.
The continued expansion of the network of banks and non-bank service providers and innovations in financial products in the remittance market have likewise provided for the wider capture of fund transfers through formal channels, facilitating the increased inflows of cash remittances.
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.