Personal remittances from overseas Filipinos (OFs) grew by 5.8 percent year-on-year in June 2015 to reach US$2.4 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1 This brought personal remittances for the first half of 2015 to US$13.4 billion, 5.3 percent higher compared to US$12.7 billion in the same period last year. The sustained growth in personal remittances for the first half of the year was boosted by the continued remittance inflows from land-based workers with contracts of at least one year (6.1 percent) and sea-based and land-based workers with short-term contracts (3.7 percent).
Meanwhile, cash remittances from OFs coursed through banks reached US$2.2 billion in June 2015, up by 6.1 percent from the year-ago level. On a cumulative basis, cash remittances for the period January-June 2015 totaled US$12.1 billion, higher by 5.6 percent than the US$11.4 billion posted in the comparable period in 2014. In particular, cash remittances from land-based (US$9.2 billion) and sea-based (US$2.8 billion) workers grew by 6.2 percent and 3.7 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
Remittances remained robust partly due to stable demand for skilled Filipinos abroad. Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that total job orders reached 454,263, of which 37.8 percent were intended mainly for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan, and the United Arab Emirates.
Similarly, stronger remittance inflows was supported by the continued initiatives of bank and non-bank remittance service providers to expand their international and domestic market coverage, and the introduction of innovations in their remittance products. As of end-June 2015, commercial banks’ established tie-ups, remittance centers, correspondent banks and branches/representative offices abroad reached 5,541 from 4,675 as of end-June 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 as the major source of OF remittances because banks attribute the origin of funds to the most immediate source.