MANILA (UPDATE) - Cash remittances sent by overseas Filipinos coursed through banks grew 3.2 percent to $2.59 billion in March 2022, the Bangko Sentral ng Pilipinas said Monday.
"The expansion in cash remittances was due to the growth in receipts from land-based and sea-based workers," the BSP said in a statement.
On a year-to-date basis, cash remittances hit $7.77 billion in the first quarter, up 2.4 percent compared to a year ago, the central bank said.
Personal remittances, meanwhile, rose by 3.1 percent to $2.8 billion in March, which brought the first quarter level to $8.6 billion, the BSP said.
The United States, Japan, Singapore, Taiwan and Saudi Arabia contributed largely to the increase in remittances in the first quarter, data showed.
In terms of country sources, the US registered the highest share of overall remittances at 41.5 percent in the first quarter, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Canada, Taiwan, Qatar and Malaysia.
RCBC Chief Economist Michael Ricafort said he expects remittances to continue to be a bright spot for the Philippine economy.
"Global economic recovery prospects somewhat improved as many countries around the world also further re-opened their economies towards greater normalcy as fundamentally justified by the recent significant easing/reduction in new COVID cases since February-March 2022... thereby helping improve job/employment prospects for some OFWs,” Ricafort said.
Ricafort added that higher inflation could also prompt OFWs to keep sending more money home to help their families cope with higher prices.
Philippine inflation hit 4.9 percent in April from 4 percent in March and 3 percent in January and February.
However Ricafort says there are other factors that might weigh down or reduce remittances including the weakness of the Philippine peso against the US Dollar, and the effect of the Russia-Ukraine conflict on the global economy. He explains "the weaker peso exchange rate vs. the US dollar in recent months (peso among the weakest in 2.5 years or since August 2019) that could have somewhat reduced the amount of OFW remittances sent/needed to pay for the same amount of spending/expenses in pesos in the country.
Meanwhile he noted while Ukraine nor Russia are major sources of remittances, their conflict still has an impact on commodities and global economic activity, and this could be a negative for OFW deployment and job security.
Socioeconomic Planning Secretary Karl Kendrick Chua earlier said the remittances from overseas Filipino workers (OFWs) are crucial in achieving an upper-middle-income country rating.
The Philippines is unlikely to reach that milestone this year, as earlier projected, due to the COVID-19 pandemic that cut OFW jobs.
But with global economies reopening, Chua said he is hopeful that the Philippines could become an upper-middle-income country by 2023.
- With a report from Warren de Guzman, ABS-CBN News