BSP: July remittances nearly flat due to weak peso

Growth of remittances from migrant Filipino workers in July slowed to a six-month low of 0.5 percent to $2.078 billion from $2.068 billion a year ago because of the US dollar’s strength against other currencies, data from the Bangko Sentral ng Pilipinas on Tuesday show.

It was the slowest growth since the 0.5 percent expansion in January this year.

The July figure brought cash remittances in the first seven months to $14.16 billion, or 4.8 percent higher than $13.5 billion posted in the same period last year. The bulk of cash remittances were secured from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong and Canada.

Growth of personal remittances, which include non-cash items, also slowed to a six-month low of 0.5 percent to $2.29 billion from $2.28 billion a year ago. It was the weakest level since the 0.2 percent expansion in January this year.

Personal remittances in the first seven months rose 4.6 percent to $15.67 billion from $14.99 billion on year.

“Personal remittances from land-based workers with work contracts of one year or more grew by 5.4 percent while those from sea-based and land-based workers with work contracts of less than a year rose by 2.9 percent,” Deputy Governor Nestor Espenilla Jr. said in a statement.

“This is partly due to the depreciation of currencies in their host countries against the US dollar, which reduced the dollar equivalent of their remittances,” Espenilla said.

Espenilla said the continued demand for overseas Filipino workers remained the key driver of sustained remittance inflows.

Preliminary reports from the Philippine Overseas Employment Administration showed that total job orders reached 526,345, of which 38.7 percent were processed, intended mainly for service, production and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan and the UAE.

The efforts of banks and non-bank remittance service providers to expand their international and domestic market coverage through their network of remittance business partners worldwide provided support to the steady remittance flows.

As of end-June 2015, commercial banks’ established tie-ups, remittance centers, correspondent banks and branches/representative offices abroad reached 5,541 from 4,675 a year ago.

Remittances fuel private consumption and one of the backbones of economic growth. Cash remittances in 2014 posted a record $24.308 billion, 5.8-percent higher than $22.968 billion in 2013. They also accounted for 8.5 percent of gross domestic product in 2014.

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