MANILA, Philippines – As reported yesterday by the Bangko Sentral ng Pilipinas (BSP), strong growth was steadily recorded for remittances in January regardless of the ban ordered by the administration on Filipino workers’ deployment to Kuwait.
Nestor Espenilla, Jr., governor of the BSP, mentioned that personal remittances in January this year recorded a two-digit growth of 10.8 percent to 2.65 billion dollars from January 2017’s 2.39 billion dollars, which was faster compared to the 7.9 percent growth booked during the holidays in December last year.
He stated that the personal remittance growth was driven by increase in remittances of 8.4 percent from land-based workers having 1-year work contracts and above to 2.1 billion dollars and increase of 15.3 percent in the sum of money remitted by both land-based and sea-based workers having work contracts of below 1 year to 500 million dollars.
Personal remittances constitute the total of employees’ net compensation, capital transfers, and personal transfers between households. It determines cash as well as non-cash items that are coursed through both formal, or by wire transfer, and informal channels like money or goods transferred across borders.
Similarly, Espenilla noted that cash remittances transferred through banks increased to 2.38 billion dollars by 9.7 percent in January from 2.17 billion dollars last year of the same month. The increase was higher compared to the 7.1 percent recorded in December.
He also mentioned that land-based workers’ cash remittances increased to 1.9 billion dollars by 8.4 percent, while the remitted sum of money by sea-based workers hiked to 500 million dollars by 15.3 percent.
According to Espenilla, above 80 percent of January’s cash remittances were sent from the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Singapore, Japan, Canada, United States, United Kingdom, and Germany.
He said cash remittances coming from the United States increased by 14.3 percent and, thus, contributed to the total growth by 4.6 percent.
He also stated that remittances coming from the United Arab Emirates, Singapore, and Canada contributed to the overall cash remittance growth by 4.6 percentage points.
President Rodrigo Duterte has ordered a ban on OFWs’ deployment to Kuwait because of the deaths of seven Filipino workers.
Authorities have understated the ban impact, explaining that Kuwait accounts for only around 3 percent of the overall remittances, and noted Filipino workers’ resiliency who could secure employment from other countries.
The BSP has placed a target growth of 4 percent for both cash and personal remittances this year.
Personal remittances increased to 31.29 billion dollars by 5.3 percent in 2017 from 29.71 billion dollars in 2016. Cash remittances, on the other hand, rose to 28.06 billion dollars by 4.3 percent from 26.9 billion dollars.
The peso has been decreasing its value, making remittance value higher.
Remittances keep on improving personal consumption, which aid in maintaining stable progress. Personal remittances represented 10 percent of the gross domestic product (GDP) and 8.3 percent of the gross national income (GNI) in 2017.
The Philippines recorded an uninterrupted 76 quarters of growth with 6.6 percent increase of GDP in the fourth quarter from third quarter’s modified 7 percent.