Personal remittances from Overseas Filipinos (OFs) reached US$7.8 billion in the first quarter of 2018, registering 1.3 percent year-on-year growth, BSP Officer-in-Charge Diwa C. Guinigundo announced today.1 The bulk (77.5 percent) of personal remittances was from land-based workers with work contracts of one year or more, which summed up to US$6.1 billion (growing by 0.4 percent), while 20 percent derived from sea-based and land-based workers with work contracts of less than one year, amounting to US$1.6 billion (rising by 2.2 percent) for the same period. However, personal remittances in March 2018, at US$2.6 billion, were 9.9 percent lower than the level posted in the same month last year.
In the first three months of 2018, cash remittances from OFs coursed through banks stood at US$7.0 billion, posting 0.8 percent growth from the level posted in the same period a year ago. Cash remittances sent by land-based workers and sea-based workers aggregated US$5.6 billion and US$1.4 billion, respectively, with growth of 0.4 percent and 2.3 percent. In March alone, total cash remittances fell by 9.8 percent year-on-year to US$2.4 billion. This was attributed to the 9.7 percent drop in cash remittances from land-based workers and 10.2 percent decrease in transfers from sea-based workers. The countries that registered the biggest declines in cash remittances in March were Saudi Arabia, United Arab Emirates (UAE), Qatar, and the United States (US). The negative growth during the month was primarily due to base effect following the sharp increase in remittances in March 2017 at 10.7 percent. Further contributing to the decline was the lesser number of banking days in March 2018 compared to the same month in 2017 since the celebration of the Holy Week happened during the last week of March as opposed to April in 2017. Moreover, the continued repatriation of OF workers from the Middle East countries could have affected the inflows of cash remittances. Preliminary data from the Department of Labor and Employment indicated that as of 8 Feb 2018, a total of 1,124 OF workers were repatriated from Kuwait.
Cash remittances coming from the US, UAE, Japan, Singapore, United Kingdom, Canada, Qatar, Germany and Hong Kong comprised 80.1 percent of total cash remittances in the first quarter of 2018.2
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.