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Personal Remittances Hit US$2.5 Billion in October 2014; January-October Level Reaches US$22 Billion

12.15.2014

Personal remittances from overseas Filipinos (OFs) in October 2014 amounted to US$2.5 billion, increasing by 6.9 percent from the level sent in October last year. On a year-to-date basis (January-October), therefore, remittances grew by 6.7 percent to US$22 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1 Personal remittances continued to draw strength from the sustained rise in transfers from land-based workers with work contracts of one year or more (5.6 percent) as well as sea-based and land-based workers with work contracts of less than one year (8.1 percent).

Similarly, cash remittances from OFs coursed through banks in October 2014 increased by 7 percent year-on-year to US$2.2 billion.  This brought the cumulative cash remittances for the period January–October 2014 to US$19.9 billion, higher by 6.2 percent compared to US$18.7 billion last year. Cash remittances from land-based and sea-based workers reached US$15.2 billion and US$4.7 billion, respectively.  The bulk of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong, and Canada.2

The steady demand for skilled and professional Filipino manpower supported the growth in remittance inflows. Preliminary data from the Philippine Overseas Employment Administration (POEA) indicated that for the period January-October 2014, job orders reached 768,741, of which 39.8 percent were processed job orders intended for service, production, and professional, technical and related workers in Saudi Arabia, the United Arab Emirates, Kuwait, Taiwan, and Qatar.

In addition, the continued efforts of bank and non-bank remittance service providers to expand their international and domestic market coverage, and introduce innovations in financial products and services in the remittance market contributed to the sustained inflow of remittances.

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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. Also 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 the U.S. Therefore, the U.S. would show up to be the main sources of OF remittances because banks attribute the origin of funds to the most immediate source.  

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