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Personal Remittances Sustain Growth in April 2015; January-April 2015 Level Totals US$8.6 Billion

06.15.2015

Personal remittances from overseas Filipinos (OFs) grew by 4.9 percent year-on-year in April 2015 to reach US$2.2 billion. On a cumulative basis, personal remittances for the first four months of 2015 totaled US$8.6 billion, higher by 5.1 percent than the level recorded in the same period last year, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1  The bulk of these inflows (74 percent) consisted of remittances from land-based workers with work contracts of one year or more which amounted to US$6.4 billion. About one-fourth (24 percent) of personal remittances came from sea-based and land-based workers with work contracts of less than one year (US$2.1 billion), while nearly 2 percent were other household-to-household transfers such as those from migrants sending money to their relatives in the Philippines (US$0.2 billion).

Cash remittances from OFs coursed through banks rose by 5.1 percent year-on-year to US$2 billion in April 2015. This brought cash remittances for January-April 2015 to US$7.8 billion, higher by 5.4 percent compared to the level posted in the same period in 2014. Cash remittances from land-based (US$5.9 billion) and sea-based (US$1.9 billion) workers increased by 5.3 and 5.6 percent, respectively.  The major sources of cash remittances were the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong, and Canada.2

The steady demand for skilled Filipino manpower overseas provided support to the continued growth in remittance inflows. Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that, of the total approved 310,727 job orders for January-April 2015, 33.8 percent were processed job orders that were intended mainly for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan, and the United Arab Emirates.

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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