Philippines: Remittances inflows growth contracts in June
August 15, 2019
Cash remittances from Overseas Filipino Workers (OFW) rose a total of USD 2.3 billion in June, declining 2.9% over the same month of the previous year. The reading was down from the 5.7% increase registered in May (USD 2.6 billion) and marked the worst performance in a year.
On a cumulative basis, cash transfers in the 12 months up to June totaled USD 29.4 billion, down from May’s USD 29.5 billion 12-month sum.
Weaker cash remittances in June came on the back of a sharp decline in transfers from land-based workers, while higher sea-based worker inflows partially offset the drop. By origin, lower remittances from Saudi Arabia and Qatar caused the decline.
All told, cash remittances rose 3.2% in H1 over the same period in 2018, with over a third of remittances arriving from the United States. Remittances, which accounted for close to 9% of GDP in 2018, are an important source of income for many Filipino families. With economic slowdowns setting in in the U.S. and many European countries, remittances could take a beating in the quarters ahead, which could pass through to slower private consumption.
Author: Lindsey Ice, Economist