Philippines: Remittances drop in April due to unfavorable exchange rates and repatriation of workers from Saudi Arabia
June 15, 2017
In April, cash remittances from Overseas Filipino Workers (OFW) dropped 5.9% from the same month of the previous year to USD 2.1 billion. The reading contrasted the notable 10.7% expansion recorded in the previous month.
The overall trend also deteriorated as cash remittances totaled USD 27.3 billion in the 12 months to April, marginally down from March’s multi-year high of USD 27.4 billion. The result was 5.1% higher than the same period of the previous year, but below the previous month’s 6.2% rise. Remittances, which accounted for approximately 9.8% of GDP in 2016, are an important source of income for many Filipino families and thus one of the main drivers of private consumption. The decline in remittances in April was mainly due to two different factors: the repatriation of workers under the Saudi Arabia Amnesty program and the depreciation of major host countries’ currencies against the US dollar—such as the euro, the pound sterling, the Australian dollar and the Singaporean dollar—which led to a lower US dollar value of remittances in April.