Overseas Filipino workers (OFWs) sent home $2.86 billion in April, marking a 3.1% increase from the same month last year, according to data from the Bangko Sentral ng Pilipinas (BSP). However, this figure represents the lowest level of remittances in 11 months.
According to a PhilStar report, the BSP data revealed that personal remittances in April grew from $2.77 billion last year, showing the fastest growth rate since December 2023’s 3.9% increase. Despite this growth, the total amount of net compensation of employees, personal transfers, and capital transfers between households was the lowest since May last year.
The increase in remittances was primarily driven by a 3% rise in funds sent by land-based workers with contracts of one year or more, which totaled $2.1 billion. Additionally, remittances from sea and land-based workers with contracts of less than one year grew by 3.6% to $620 million.
From January to April 2024, personal remittances increased by 2.8% to $12.01 billion, up from $11.68 billion in the same period the previous year. Cash remittances through banks rose by 3.1% to $2.56 billion in April, the lowest since May 2023, but also showed the fastest growth rate in four months.
The BSP highlighted the significant contributions to the increase in remittances from the United States, Saudi Arabia, and Singapore. The US accounted for the largest share of remittances at 41.2%, followed by Singapore at 7%, and Saudi Arabia at 6%.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the steady growth in remittances would support consumer spending in the Philippines. He anticipated a potential seasonal increase in remittances to fund school tuition around July and August. However, he warned that an economic slowdown in the US and other countries could impact remittances if job losses occur among OFWs.
The BSP projects a 3% increase in both personal and cash remittances for the year.
