Personal remittances from overseas Filipinos (OFs) reached the highest monthly level to date at US$2.6 billion in December 2014, posting a 6.4 percent year-on-year growth. For the full-year 2014, personal remittances from OFs increased to US$26.9 billion, higher by 6.2 percent compared to 2013 and exceeding the BSP’s projection of five percent growth for the year, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1
The sustained increase in personal remittances during the year was underpinned by the steady rise of remittances from land-based workers with work contracts of one year or more (5.5 percent) as well as sea-based and land-based workers with work contracts of less than one year (6.9 percent).
Similarly, cash remittances from OFs coursed through banks registered a record high of US$2.3 billion, representing a 6.6 percent year-on-year increase in December 2014. For the full-year 2014, cash remittances reached US$24.3 billion, 5.8 percent higher than the level posted last year. Cash remittances from land-based and sea-based workers reached US$18.7 billion and US$5.6 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 robust growth of OF remittances continued to provide support to the country’s economy, with cash remittances accounting for 8.5 percent of gross domestic product (GDP) in 2014. Strong demand for skilled Filipino manpower contributed to the steady growth of remittances. Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that the number of deployed OF workers for the year totaled 1.6 million. Likewise, for 2014, the POEA reported that approved job orders reached 878,609 positions, indicating a 10.7 percent growth in job orders from the previous year’s level. About 43.6 percent of the processed job orders were intended for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, the United Arab Emirates, Taiwan, and Qatar. Meanwhile, as of end-2014, commercial banks’ tie-ups, remittance centers, correspondent banks, and branches/representative offices abroad reached 4,765.
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.