MONEY SENT HOME by overseas Filipino workers (OFW) registered its eighth straight month of annual growth in September, signaling the start of a seasonal uptick in remittances ahead of the holiday season.
Cash remittances rose by 5.2% year on year in September to $2.737 billion from $2.601 billion in the same month a year ago, according to data released by the Bangko Sentral ng Pilipinas (BSP) on Monday.
Month on month, remittances also grew by 4.9% from the $2.609 billion in August.
“The expansion in cash remittances was due to the increase in receipts from land-based and sea-based workers, which rose by 6.2% (to $2.156 billion from $2.031 billion) and by 1.9% (to $581 million from $570 million), respectively,” the BSP said.
This brought nine-month remittance inflows to $23.117 billion, up by 5.6% from the $21.886 billion during the same period in 2020.
The uptick in remittances helped boost household consumption in September, despite the implementation of strict quarantine restrictions amid a Delta-driven surge in coronavirus disease 2019 (COVID-19) cases.
“As we saw in the third quarter, household consumption was up by 7.1% year on year despite a strict lockdown [for two weeks in August], likely supported by remittances as well,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
“A recovery in private consumption is key to the Philippines’ real gross domestic product (GDP) growth, as it accounts for around 75% of output,” he added.
In the third quarter, the economy expanded by 7.1% year on year and by 3.8% quarter on quarter.
The September remittance data is also starting to reflect the usual seasonal inflows as Christmas approaches, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.
The biggest remittance markets were the United States, Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar, and South Korea, which accounted for 78.9% of total inflows.
Meanwhile, personal remittances, which include inflows in kind, increased by 4.8% year on year in September to $3.026 billion.
This brought its year-to-date figure to $25.699 billion, up by 5.7% from the $24.302 billion in the same period of 2020.
Security Bank’s Mr. Roces said remittance inflows had already proven to be resilient last year and are only expected to recover further by 2022 when more economies reopen.
However, he said the spread of COVID-19 around the world will continue to be a risk.
“Risks remain until the World Health Organization declares the pandemic to be over. Despite the nascent recoveries we are seeing, we are not yet out of the woods and uncertainties remain,” Mr. Roces said.
The BSP in September raised its cash remittance growth projection for 2021 to 6% from 4% previously. — Luz Wendy T. Noble