Personal remittances from overseas Filipinos (OFs) rose by a double-digit rate (11 percent) in March 2015 to reach US$2.3 billion. This was the highest monthly growth registered in 15 months, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1 As a result, growth in cumulative remittances for the first quarter of 2015 accelerated to 5.1 percent from 2.1 percent in the first two months of the year. This brought the cumulative remittances level to US$6.4 billion. The continued increase in personal remittances during the quarter was driven by robust inflows from both land-based workers with work contracts of one year or more (5.3 percent), as well as sea-based and land-based workers with work contracts of less than one year (6.1 percent).
Cash remittances from OFs coursed through banks increased by 11.3 percent year-on-year to US$2.1 billion in March 2015. For the first three months of the year, cash remittances reached US$5.8 billion, 5.5 percent higher than the level posted in the comparable period in 2014. Cash remittances from land-based (US$4.4 billion) and sea-based (US$1.4 billion) workers expanded by 5.3 and 6.1 percent, respectively. Primary sources of cash remittances were the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong, and Canada.2
Remittances remained strong partly on account of sustained demand for skilled Filipino manpower overseas. Preliminary data from the Philippine Overseas Employment Administration (POEA) indicated that approved job orders reached 243,045 for the first quarter of 2015, of which 31.2 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 POEA reported that a total of 519,029 contracts were processed for the first quarter of 2015.
Similarly, the initiatives 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. As of end-March 2015, commercial banks’ established tie-ups, remittance centers, correspondent banks and branches/representative offices abroad reached 4,840 from 4,771 in the comparable period in 2014.
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.