Philippines: Remittances expand at the fastest pace in 9 months
October 15, 2012
In August, remittances from Overseas Filipino Workers (OFW) increased 7.8% over the same month last year to USD 1.8 billion, which was above the 5.5% expansion observed in July (previously reported: +5.4% year-on-year). In fact, the reading represented the fastest pace of expansion since November 2011. Despite the improvement, the trend points downwards, with remittances adding USD 20.8 billion in the last 12 months, a 6.3% expansion over the same period last year (July: +6.5% yoy). According to the Central Bank, "growth in remittances was sustained by higher personal transfers from land-based OF workers (OFWs) with work contracts of one year or more, as well as sea-based workers and land-based workers with short-term contracts". Remittances account for approximately 9% of GDP and are an important source of income for many Filipino families. Given its significance to the economy, OFW funds sent from abroad are one of the key drivers of private consumption in the country.