Personal remittances from overseas Filipinos (OFs) amounted to US$2.1 billion in February 2015, an increase of 4.0 percent compared to the same period in 2014. As a result, remittance inflows for the first two months of the year reached US$4.1 billion, posting a year-on-year growth of 2.1 percent, Bangko Sentral ng Pilipinas Officer-in-Charge Nestor A. Espenilla, Jr. announced today.1 For the period January-February 2015, personal remittances from land-based workers with work contracts of one year or more, and migrants’ transfers totaled US$3.1 billion. Meanwhile those from sea-based and land-based workers with work contracts of less than one year aggregated US$1.0 billion.
Cash remittances from OFs coursed through banks summed up to US$1.9 billion in February 2015, higher by 4.2 percent than the level posted a year ago. This brought cash remittances for the first two months of 2015 to US$3.7 billion, representing a 2.4 percent increase relative to the year-ago level. In particular, cash remittances from land-based and sea-based workers rose to US$2.8 billion and US$0.9 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 slowdown in growth in recent months could be due to base effect as remittances last year were relatively high given higher transfers from overseas Filipinos that were intended for the rehabilitation and rebuilding efforts in Eastern Visayas due to the damage caused by Typhoon Yolanda.
The steady deployment of OF workers remained a key driver in the sustained inflows of remittances. Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that approved job orders reached 164,525 for the period January-February 2015, of which 26.5 percent were processed job orders that were intended mainly for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Taiwan, Qatar, and the United Arab Emirates.
Likewise, the continued efforts of banks and non-bank remittance service providers to expand their international and domestic market coverage through tie-ups abroad as well as the introduction of innovations in their remittance products continued to provide support to the steady flow of 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. 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.