Cash inflows from overseas Filipino workers (OFWs) rose by 3.7 percent year-on-year to USD2.48 billion last April, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
The central bank attributed the rise in cash remittances, coursed through banks, to strong growth of remittances both from land-based and sea-based workers.
Data released by the BSP showed that cash inflows from land-based workers rose by 4 percent year-on-year to USD1.94 billion, while those from sea-based workers rose by 2.7 percent to USD55 million.
In the first four months this year, cash remittances reached USD10.49 billion, 3.2 percent higher compared to the USD10.17 billion same period last year.
Bulk of these inflows came from the United States, Singapore, and Saudi Arabia.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said cash remittances last April is lower than the nearly USD2.4 billion in the same period last year.
He attributed the lower inflows partly to the risk of recession in the US and its impact on global growth and employment opportunities.
“The continued slowdown in OFW remittances data may also have to do with the still relatively higher prices/inflation/cost of living in major host countries for OFWs that fundamentally reduced the remittances sent back to the Philippines,” he added.
Ricafort said weakening of the Philippine peso against the US dollar likely contributed to the decline in cash remittances in the fourth month this year.
Despite the decline in cash remittances last April, Ricafort continues to consider inflows from Filipino workers overseas as among the bright spots for the economy given its robust growth despite the challenges.
Remittances from OFWs are among the main drivers of domestic growth since these allow more Filipinos to have spending capacity.
“Going forward, any further recovery in OFW remittances in the coming months would also largely depend/be a function of the further/faster recovery of the economies of the major host countries around the world from COVID-19 lockdowns, for some OFWs to be able to work again, as well as the pace of restoring/regaining jobs lost by some adversely affected OFWs in the same or different industry/host country,” he added.*PNA