Remittances dip in August but remain higher year-on-year

Money sent home by overseas Filipinos (OFs) eased in August from July’s seven-month high, Bangko Sentral ng Pilipinas (BSP) data showed on Wednesday.

Personal remittances slid to $3.31 billion from $3.35 billion a month earlier. It was, however, 3.2 percent higher compared to the year-ago $3.21 billion.

Cash remittances alone totaled $2.98 billion, also 3.2 percent higher than the $2.89 billion in August last year but lower than July’s $3.18 billion.

The year-on-year gain, the BSP said, “developed on account of higher inflows from both land-based and sea-based workers.”

Land-based OFs were said to have accounted for $2.35 billion, while the sea-based OFWs added $626 million.

SMIC chief economist Dan Roces noted the pickup in cash remittance growth from July’s 3.0 percent, which he said “suggests that remittance flows have some resilience despite global headwinds, and reflects, in part, a lower comparative base or mild fluctuations in monthly flows.”

A weaker peso, he added, will likely boost remittances as recipients benefit from a more favorable exchange rate.

“Evidence from BSP studies has highlighted the positive role of exchange rate depreciation as a driver of remittances,” Roces said.

“The ‘ber’ months (September to December), when remittances traditionally rise, may buoy the remainder of the year,” he added.

Year to date, personal remittances were up 3.1 percent to $25.51 billion from $24.74 billion, while cash remittances also rose 3.1 percent to $22.91 billion from $22.22 billion in January-August 2024.

The United States remained the top source of cash remittances, accounting for 40.4 percent of the eight-month total. Singapore followed at 7.1 percent and Saudi Arabia at 6.3 percent.

Rounding up the top five were Japan (4.9 percent) and the United Kingdom (4.8 percent).

The BSP noted limitations on data by source, as remittance centers abroad normally send the money through correspondent banks that are mostly located in the US.

Also, remittances sent through couriers are recorded under the country where their main offices are located, which again in many cases is the US.

“Therefore, the US would appear to be the main source of OF remittances because banks attribute the origin of funds to the most immediate source,” the BSP said.

Source: Manila Times