BSP Governor Nestor A. Espenilla, Jr. announced today that personal remittances from Overseas Filipinos (OFs) rose by 6.8 percent year-on-year to reach US$2.8 billion in June 2017. This brought personal remittances for the first semester of 2017 to US$15.4 billion, higher by 5.5 percent than the level registered in the same period a year ago.1 Growth was boosted largely by the 5.5 percent increase in personal remittances from land-based workers with long-term contracts, whose remittances comprised 77.3 percent of total personal remittances. It was also supported by the 1.7 percent rise in remittances from sea-based and land-based workers with short-term contracts.
Similarly, cash remittances from OFs coursed through banks, amounting to US$2.5 billion in June 2017, went up by 5.7 percent year-on-year. Cash remittances from land-based workers (at US$1.9 billion) and from sea-based workers (at US$0.5 billion), posted a 3.8 percent and 13.3 percent growth, respectively, compared to the level reported in the same month a year ago.
The United States (US), United Arab Emirates (UAE), Hong Kong and Singapore were the major contributors to the growth in cash remittances during the month. Cash transfers from the US and UAE each contributed 1.9 percentage points to the 5.7 overall growth in cash remittances while those from Hong Kong and Singapore contributed a combined 1.1 percentage points.
By country source, the bulk of cash remittances came from the US, Saudi Arabia, UAE, Singapore, Japan, United Kingdom, Qatar, Kuwait, Germany and Hong Kong2. The remittances from these countries accounted for almost 80 percent of total cash remittances in the first semester of 2017.
The sustained increase in OF remittances was supported by stable demand for skilled Filipinos abroad. Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that for the period January-June 2017, the total number of deployed OF workers reached 1,140,226 which is already more than 50 percent of the total number of OF workers deployed for the year 2016 at 2,112,331.
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.