Philippines: Remittances in August shrink for first time in over 12 years
October 15, 2015
In August, cash remittances from Overseas Filipino Workers (OFW) contracted 0.6% over the same month last year, dropping to USD 2.0 billion. The reading marked the first contraction since April 2003 and contrasted July’s modest 0.5% increase. According to the Central Bank, August’s contraction partly resulted from the fact that the U.S. dollar appreciated against several regional currencies, which, “reduced the dollar equivalent of remittances sent from host countries.” The overall trend remained stable, as cash remittances totaled USD 25.0 billion in the 12 months up to August, matching July’s print, which had represented a record high. The increase marked a 4.7% expansion over the same period last year, which was down from July’s 5.2% rise. Remittances, which accounted for approximately 8.5% of GDP in 2014, are an important source of income for many Filipino families and thus a key driver of private consumption.FocusEconomics Consensus Forecast panelists expect private consumption to grow 6.0% in 2015, which is up 0.2 percentage points from last month’s projection. For 2016, the panel expects private consumption to expand 5.6%, which is up 0.1 percentage points from last month’s estimate.