Personal remittances from overseas Filipino workers (OFWs) witnessed a rise of 2.8%, reaching $3.1 billion in August, according to Banko Sentral ng Pilipinas (BSP).
This is a considerable increase from $3.02 billion during the same period last year.
The 2.8% growth rate in August represents the swiftest upturn since the 2.9% increase observed in May when the remittances totaled $2.78 billion. The central bank attributed this hike to the sustained growth in money transfers coming in from both land-based and sea-based OFWs.
For the period January to August 2023, the total inflows were reported at $24.01 billion, marking a 2.9% increase from $23.34 billion in the corresponding timeframe of 2022. This year’s eight-month growth rate was marginally behind the 3% seen in 2022.
Breaking down the August data further, bank-mediated transfers experienced a 2.7% rise, with figures moving from $2.72 billion to $2.8 billion. Analysts anticipate that a consistent inflow, which is set to peak in the last quarter, will counterbalance the existing “bleak outlook” on the Philippine peso. This prediction also considers receipts from business process outsourcing activities.
In terms of countries contributing to remittances, the United States took the lead in cash remittances directed towards the Philippines. Following the US were Singapore and Saudi Arabia. Cumulatively, from January to August, inbound cash transfers surged by 2.8% from $20.99 billion to $21.58 billion.
BSP’s current figures align with its forecast, projecting a 3% growth in full-year cash transfers from the $36.1 billion recorded last year. This would equate to an expected total of $32.2 billion for 2023.
Commenting on the Philippine peso’s market position, HSBC noted that the approach to the currency remains stable with a consistent US dollar bias. Currently, the peso stands below 57 against the US dollar, a stance which, as per HSBC, the BSP will likely uphold.
HSBC further commented, “Given the trade deficit’s expected steadiness, we anticipate a peso respite only when there’s a rise in services trade surplus and inward remittance, especially during the high seasonality months of October and December.”