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Sea-based OFWs remit $2.3 billion in Jan-May 2017, down 0.6 percent from 2016, says Bangko Sentral ng Pilipinas, but grew 3 percent to $500 million in May 2017

Remittances rise to $2.3B in May
Ben O. de Vera - July 17, 2017 http://business.inquirer.net/233355/remittances-rise-2-3b-may

Ahead of the opening of classes, Filipinos abroad sent home $2.31 billion in May, a 5.5 percent increase year-on-year, which kept monthly remittances above the $2-billion level for the 16th straight month.

Cash remittances sent through banks last May rose from $2.188 billion a year ago and exceeded the $2.083 billion in April, the latest Bangko Sentral ng Pilipinas data released Monday showed.

The growth in cash remittances that month reversed the 5.9-percent drop posted in April.

In a statement, BSP Governor Nestor A. Espenilla Jr. said remittances from land-based overseas Filipino workers in May rose 6.2 percent year-on-year to $1.8 billion, while those from sea-based OFWs grew 3 percent to $500 million.

Espenilla said the top contributors to the increase in cash remittances last May were the United Arab Emirates, Canada, Saudi Arabia and the United States.

From January to May, remittances totaled $11.346 billion, up 4.5 percent from $10.859 billion in the first five months of last year.

According to Espenilla, cash sent home by land-based OFWs as of end-May increased 5.9 percent year-on-year to $9 billion.

Sea-based OFWs, meanwhile, sent home $2.3 billion during the five-month period, down 0.6 percent from a year ago, Espenilla said.

The BSP said cash remittances from Canada, Germany, Japan, Kuwait, Qatar, Saudi Arabia, Singapore, the UAE, the United Kingdom and the US accounted for fourth-fifths of the end-May total.

Based on updated projections released last month, the BSP expects cash remittances from Filipinos working and living abroad to reach another record-high of $28 billion by yearend.

The BSP had kept the 4-percent remittances growth target for 2017, although the value of the updated forecast was higher than the earlier projection of $27.7 billion.
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Cash sent home by overseas Filipinos through banks hit a record $26.9 billion in 2016, up 5 percent from $25.6 billion in 2015.

Remittances are the country’s biggest source of foreign exchange income, helping insulate the domestic economy from external shocks by ensuring the steady supply of dollars into the system.

These cash transfers are also a major driver for domestic consumption, which contributes to robust economic growth. CBB

On a monthly basis, both cash and personal remittances recorded increases.

Personal remittances or the net compensation of OFWs’ personal and capital transfers, totaled $2.588 billion in May, it was 7.1 percent higher compared to the previous year’s $2.416 billion.

From January to May, personal remittances amounted to $12.613 billion, 5.2 percent more year-on-year or from $11.993 billion.

The BSP said personal remittances from land-based workers with work contracts of one year or more grew by 5.9 percent to “compensate for the 0.6 percent decline in remittances from sea-based and land-based workers with work contracts of less than one year on the same period a year ago.”

For 2017, the BSP still expects remittances to grow by four percent. While it changed the external sector estimates for the year such as balance of payments and its components, it has not revised projection for fund transfers due to a relatively improved outlook for global growth.

Remittance is one of key BOP-sensitive data the BSP is closely monitoring. The current projection for BOP is a deficit of $500 million for 2017 while current account balance – for the first time in 15 years – is expected to reverse to a deficit of $600 million this year.