Cash remittances hit 7-month high in July

Cash remittances from overseas Filipino workers (OFWs) grew 3.1% year-over-year to $3.08 billion in July 2024, the highest level in seven months, according to the Bangko Sentral ng Pilipinas (BSP).

This marked the first time cash remittances surpassed $3 billion in any month other than December, traditionally the peak season. The increase from $2.99 billion in July 2023 was driven by higher receipts from both land- and sea-based workers, the BSP said.

In the first seven months of the year, total cash remittances reached $19.33 billion, up 2.9% from $18.79 billion a year earlier. The United States, Saudi Arabia, and the United Arab Emirates were major contributors to this growth.

Personal remittances, which include funds sent outside the banking channels, also rose 3.2% in July to $3.43 billion from $3.32 billion a year ago. This was due to increased remittances from both sea- and land-based workers. For the first seven months, personal remittances rose 3% to $21.53 billion from $20.91 billion.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said that while single-digit growth in OFW remittances was expected to continue, higher prices would likely require more funds to be sent home. He also noted that the risk of economic slowdown or recession in major host countries, coupled with job losses, could negatively impact remittances. However, the reopening of China's economy could offset some of these pressures.

Ricafort added that the continued growth in OFW remittances could be attributed to higher local inflation, which would require more funds to be sent home. The relatively higher U.S. dollar-to-peso exchange rate since 2022 would also benefit OFWs and their families.