MANILA — The Bangko Sentral ng Pilipinas (BSP) announced on Thursday, February 15, 2024, that personal remittances from overseas Filipinos hit an unprecedented peak last year, propelled by a surge in the deployment of overseas workers.
According to data from the BSP, personal remittances from OFWs reached USD 37.2 billion, marking a notable 3% increase from the USD 36.1 billion recorded in 2022.
“The substantial influx of inward remittances reflects the escalating deployment of OFWs, driven by the sustained demand for foreign labor in host nations,” stated the BSP.
The BSP further disclosed that the full-year 2023 remittances accounted for approximately 8.5% of the country’s gross domestic product and 7.7% of its gross national income.
Cash remittances channeled through banks amounted to USD 33.5 billion last year, reflecting a 2.9% surge from the USD 32.5 billion recorded in 2022.
“The growth in cash remittances from key sources such as the United States, Saudi Arabia, and the United Arab Emirates (UAE) significantly bolstered the overall increase in remittances for 2023,” added the central bank.
The United States retained the largest share of overall remittances during the period, followed by Singapore, Saudi Arabia, Japan, and the United Kingdom.
Michael Ricafort, Chief Economist at Rizal Commercial Banking Corporation, highlighted that Philippine remittances from overseas workers consistently rank as the world’s fourth-largest, following India, Mexico, and China. He emphasized the pivotal role of remittances as a resilient pillar of the Philippine economy, driving growth for numerous years.
Ricafort also noted the seasonal trend of increased OFW remittances during the fourth quarter, particularly in the lead-up to the Christmas holiday season, to accommodate heightened spending. He underscored this pattern as a crucial factor in supporting the peso exchange rate.
Looking ahead, Ricafort anticipated continued modest growth in OFW remittances, attributing it to the necessity for OFW dependents to contend with rising prices, necessitating additional remittances. He also pointed out another seasonal increase in OFW remittances anticipated around July to August due to shifts in the school year.
However, Ricafort cautioned against potential risks to OFW employment opportunities, including economic slowdowns in the United States, softer growth in China and other European nations, and geopolitical conflicts such as the Israel-Hamas conflict.
(By el Amigo/MNM)
