Remittances likely to remain resilient for rest of 2025

Cash remittances are projected to remain resilient for the rest of the year, potentially surpassing the Bangko Sentral ng Pilipinas’ (BSP) 2.8% full-year growth target, analysts said.

However, they also warned of possible external shocks that could dampen remittance growth.

“We’re on track. First-half growth hit 3.1%, already above BSP’s 2.8% forecast,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said.

“If global labor markets stay resilient and the peso remains competitive, we could even beat the (BSP’s) 2.8% full-year target.”

Money sent home by overseas Filipino workers (OFWs) rose by 3.1% to $16.75 billion in the first six months of the year, with land-based workers contributing the bulk of the increase.

The BSP is targeting a 2.8% growth in remittances this year, and 3% growth for 2026.

Remittance inflows are expected to accelerate ahead of the holiday season, analysts said.

“We expect remittances to remain a constant and reliable source of foreign currency over the next few months, with a seasonal acceleration as we enter the fourth quarter of the year,” Metropolitan Bank & Trust Co. (Metrobank) Chief Economist Nicholas Antonio T. Mapa said.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the BSP’s full-year target of 2.8% remittance growth is “well within reach.”

“Remittance flows are expected to remain resilient, supported by seasonal inflows during the ‘ber’ months and improving global labor conditions,” he said.

Analysts warned the US government’s 1% tax on remittances, which will take effect on Jan. 1, 2026, will have a dampening effect on remittances from US-based Filipinos.

“However, the proposed 1% remittance tax in the US could pose downside risks in 2026. While the BSP’s 3% growth target remains achievable, the tax may dampen inflows from the US — currently the largest source — unless mitigated by digital remittance innovations or policy support,” Mr. Asuncion said.

The tax will be applied on cash-based remittance transfers from US-based senders, regardless of citizenship status.

BSP data showed the US remained the top source of remittances to the country in the first half, accounting for 40.1% of total remittances for the period.

“The proposed 1% US remittance tax could dampen inflows (from formal channels) slightly if implemented, but its real impact will depend on scope, implementation, and possible offsets from fintech cost reductions or regulatory responses,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in Viber message.

Mr. Ravelas said the proposed tax is a “red flag,” as it might encourage senders to use informal channels.

“That’s a red flag. The US sends over 40% of our remittances. A 1% tax could dampen flows or push senders to informal channels,” he said. “We’ll need to watch how it’s implemented and prepare support mechanisms for OFWs.”

Mr. Mapa said OFWs have been “creative” in finding ways to send money back home in the past.

“We could still expect remittance flows to remain robust in the near term,” he said.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted US protectionist policies and stricter immigration rules could weigh on remittances from the US.

“Trump’s threats of higher reciprocal tariffs and other America-first policies could also slow down global trade, investments, employment including some OFW jobs, and overall world economic growth,” he said in an e-mail. “This could also indirectly slow down the growth in OFW remittances from other countries around the world.”

Source: Business World

Remittances expected to drop next year, Visa survey finds

Overseas workers expect to cut down on their remittance over the next 12 months, with remittance recipients also expecting a drop-off, according to Visa, Inc., citing the results of a survey.

“All countries surveyed show a decline in expectations to send/receive remittances over the next 12 months,” Visa said.

Visa surveyed 44,000 remittance senders and receivers from 20 countries, including the Philippines.

Only 7% of Filipino respondents said they expect to send remittances over the next 12 months, while 44% expect to receive remittances.

In May, cash remittances coursed through Philippine banks rose 2.9% year on year to $2.658 billion.

This the lowest level of monthly remittances since May 2024.

Within the Asia-Pacific, China posted the steepest expected remittance decline, with those expecting to remit funds at 26%, down 25 percentage points, and those expecting to receive at 21%, down 15 percentage points.

The corresponding figures for Japan were send 3%, receive 4%; India send 18%, receive 28%; and Australia send 25%, receive 22%.

In the Philippines, 41% of respondents said they sent or received remittances due to unexpected needs, while 39% reported receiving regular remittances.

Digital apps remained the most popular method to send or receive remittances in the Asia-Pacific. In the Philippines, 74% of senders and 66% of receivers cited a preference for digital apps.

“In all markets surveyed, second to digital apps (were) digital remittances from a physical location,” Visa said.

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Source: Business World

The danger of OFWs starting businesses

Overseas Filipino workers (OFWs) are rightfully called modern-day heroes. Their sacrifices have sustained countless families and propped up the Philippine economy through billions in remittances.

However, behind the success stories, many OFWs face heartbreaking realities—especially when it comes to starting businesses.

Entrepreneurship is often seen as the ultimate dream for OFWs, a way to finally come home for good and enjoy financial independence. While the intention is noble, the risk is real.

In fact, the danger is highest when OFWs attempt to start businesses while still working abroad.

Here are the reasons why:

1. Funding without leading

One of the biggest mistakes OFWs make is becoming “absentee entrepreneurs.” You provide the capital, but someone else runs the business.

In many cases, this person is a family member or friend. While there are exceptions, the sad reality is that trust doesn’t always translate to competence—or integrity.

You’re working 12-hour shifts abroad, sending your hard-earned money back home, and hoping your sari-sari store, tricycle business or mini grocery will grow.

But you’re not there to monitor the daily operations. You’re not seeing where the money goes. You don’t know if the earnings are being reinvested or spent.

I’ve heard countless stories where the OFW is left with nothing: the business folds, relationships are strained and years of sacrifice are lost.

Entrepreneurship requires hands-on leadership. Capital alone does not guarantee success.

2. Lack of business know-how

Many OFWs dive into business without the proper training or experience. They might be great at their jobs overseas—as nurses, engineers or technicians—but business is a different world. It demands knowledge in operations, marketing, accounting and more.

Starting a business just because a relative or friend suggests it—or because it worked for someone else—is not a wise strategy. Every business involves risk, and without education and preparation, that risk multiplies.

Before putting money into a venture, OFWs should invest first in financial literacy and entrepreneurial training.

Learn before you launch.

3. Over-romanticizing the ‘come-home-for-good’ dream

It’s natural for OFWs to dream of coming home for good.

But it must be backed by a solid plan, not just emotion. Many OFWs are so eager to return that they rush into business without counting the cost.

A business isn’t a magic exit from working abroad. In fact, it can create more stress, especially when it starts to fail. Instead of being a pathway to freedom, it becomes a trap of debt and regret.

The transition from employment to entrepreneurship should be gradual and well-planned. Don’t use your business as a ticket home unless it has already proven to be stable, profitable and sustainable.

4. Pressure from family and community

Let’s be honest. Many OFWs are pressured to support not just their immediate family but their extended relatives.

Often, the idea of starting a business is influenced by well-meaning—but sometimes entitled—family members who promise to “take care of it.”

This dynamic can lead to emotional manipulation:

“Kaya mo na ‘yan; ikaw na ang nasa abroad!” (You can take care of it; you’re the one based overseas.)

“Para naman makauwi ka na!” (It’s so that you can come home)

And so, out of guilt or desire to please, OFWs pour money into businesses they did not study or plan for.

Entrepreneurship requires objectivity. It cannot be driven by pressure or utang na loob (debt of gratitude).

Always remember: your hard-earned money deserves wise stewardship.

5. Starting with the wrong mindset

Another danger is the belief that entrepreneurship is the answer to all financial problems. It’s not. Most small businesses in the Philippines don’t last beyond three years. Success in business is not guaranteed.

Some OFWs pour everything they have—retirement money, savings, even borrowed funds—into one business venture. It’s an all-or-nothing move.

When it doesn’t work out, the result is devastating: no savings, no income and in some cases, no way to go back abroad.

If you are going to start a business, do it with the mindset of a steward, not a gambler.

Start small. Test the waters. Grow gradually.

Focus first on building a strong financial foundation. This means having an emergency fund, insurance, zero debt and savings set aside for capital, not borrowed money.

At the same time, educate yourself through business courses or mentors. Start small while abroad, and wait until you’re home or have a trusted partner before going all in.

I believe many OFWs can become great entrepreneurs. But it must be done wisely, not emotionally. Don’t let your years of sacrifice go to waste because of poor planning and misplaced trust.

Remember: A business can be a blessing—but only if built with vision, discipline and stewardship.

Source: Inquirer