Philippines: Growth in remittances slows to almost five-year low
January 14, 2015
In November, cash remittances from Overseas Filipino Workers (OFW) increased 2.0% over the same month of the previous year, reaching USD 2.1 billion. The print came in markedly below October’s 7.0% expansion and marked the lowest pace of growth since January 2009. According to Central Bank Deputy Governor Diwa Guinigundo, the depreciation of the Philippine peso against the US dollar might have been behind November’s slowdown in remittances’ growth as workers tend to adjust their remittances to exchange rate fluctuations in order to send a broadly stable peso value. The overall trend however improved slightly as remittances totaled a record-high USD 24.2 billion in the 12 months up to November, which was up from October’s USD 24.1 billion. The increase represented a 6.1% expansion over the same period of the previous year but fell short of October’s 6.7% rise.
Remittances, which account for approximately 9.0% of GDP, are an important source of income for many Filipino families and thus a key driver of private consumption. According to the Central Bank, land-based workers accounted for the largest share of remittances, while a smaller proportion of remittances came from sea-based workers. Remittances mainly came from the United States, Saudi Arabia and the United Arab Emirates.