OFW Remittance Set Record $26.9 Billion in 2016

Filipinos based overseas has sent a new record high $2.56 billion cash through banks in December amid improving global economy that sent the country’s growth rate exceeding government’s target.

Bangko Sentral ng Pilipinas’s released data showed cash remittance from abroad in December was the highest monthly inflow to date, up 3.6% from the $2.47 billion during the same period in 2015.

According to BSP Deputy Governor and officer-in-charge Diwa C. Guinigundo, a significant portion of remittance during the peak Christmas season were from Japan, Qatar and the United States.

Overall, cash remittances in 2016 reached record-high $26.9 billion, up 5% from $25.61 billion in the entire of 2015.

This growth trend in remittance flow to the Philippines continues to be a major driver of domestic demand, Guinigundo said, adding that personal remittances such as money transfers that did not involve banks and remittance couriers accounted for 9.8% of gross domestic product in 2016.

The Philippines’ gross domestic product grew by 6.8% in 2016.

According to Guinigundo, remittances from land-based overseas Filipino workers rose 7.6 percent year-on-year to $21.3 billion last year. On the contrary, cash sent home by sea-based OFWs slid 3.8 percent to $5.6 billion in 2016.

“This may have been due partly to stiffer competition in the supply of seafarers, particularly from East Asia and Eastern Europe,” Guinigundo explained.

Higher amounts of remittance money coming from Kuwait, Oman, Qatar and the United Arab Emirates drove the overall cash remittance sent in from the Middle East to grow 12.7% last year.

Remittance from Asian economies also increased by 7.4% mainly due to growth in money transfers from China, Japan, Singapore and Taiwan.

From the Americas, cash remittances posted 3.8-percent increase, buoyed by the 6.2-percent growth coming from the US.

However, remittances from Europe fell 8.4 percent in 2016 “owing to the decline in cash transfers from the United Kingdom (partly due to the depreciation of the pound sterling vis-à-vis the US dollar), Italy and the Netherlands,” Guinigundo said.

The top 10 sources of cash remittances last year, which accounted for more than four-fifths of the total, were Germany, Hong Kong, Japan, Kuwait, Qatar, Saudi Arabia, Singapore, the UAE, the UK and the US.