01.15.2014

Personal remittances from overseas Filipinos (OFs) rose by 9.5 percent year-on-year in November 2013 to reach the highest level to date of US$2.286 billion. This marks the eighth consecutive month in 2013 that personal remittances breached the US$2 billion mark, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today.1  On a year-to-date basis, personal remittances from OFs in January-November 2013 grew by 7.1 percent from the previous year's level to US$22.7 billion. The steady increase in personal remittances during the eleven-month period was driven largely by the 5.5 percent increase in remittances from land-based workers with work contracts of one year or more, accounting for more than three-fourths (75.6 percent) of total transfers for the said period. Transfers from sea-based workers and land-based workers with short-term contracts likewise rose by 8.2 percent. Other household-to-household transfers comprising largely of cash transfers from Filipinos who have migrated abroad also rose significantly.

Similarly, cash remittances from OFs coursed through banks rose by 7.5 percent year-on-year to US$2.063 billion in November, exceeding the record-high level of US$2.062 billion posted in October. For the period January-November 2013, cash remittances totaled US$20.6 billion, 6.1 percent higher than the level registered in the same period in 2012. Cash transfers from both land-based (US$15.8 billion) and sea-based workers (US$4.8 billion) grew by 5.5 percent and 8.2 percent, respectively. The major sources of cash remittances were the United States, Saudi Arabia, the United Kingdom, the United Arab Emirates, Singapore, Canada, and Japan.2

The steady deployment of OF workers remained the key driver of growth in remittance flows for the first eleven months of the year. Preliminary data from the Philippine Overseas Employment Administration (POEA) indicated that approved job orders totaled 731,254 for January-November 2013, of which about two-fifths (43.2 percent) were processed job orders mainly for services, production, and professional, technical, and related workers.

The said job orders were intended for the manpower requirements of Saudi Arabia, the United Arab Emirates, Kuwait, Taiwan, Hong Kong, and Qatar. Moreover, the presence of bank and non-bank service providers in foreign countries through tie-ups and remittance centers continue to provide support to the sustained flow of remittances into the country.

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1 As defined in Balance of Payments Manual, 6th Edition (BPM6), personal remittances represent the sum of net compensation of employees (i.e., gross earnings of overseas Filipino (OF) workers with work contracts of less than one year, including all sea-based workers, less taxes, social contributions, and transportation and travel expenditures in their host countries), personal transfers (i.e., all current transfers in cash or in kind by OF workers with work contracts of one year or more as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines), and capital transfers between households (i.e., the provision of resources of capital purposes, such as for construction of residential houses, between resident and non-resident households without anything of economic value being supplied in return).
2 Data may not be truly reflective of the actual source of remittance of OFs. The common practice of remittance centers in various cities abroad is to course remittances through correspondent banks mostly located in the U.S. On the other hand, remittances coursed through money couriers cannot be disaggregated into their actual country source and are lodged under the country where the main offices are located, that is, Canada. Therefore, U.S. and Canada appear to be the main sources of OF remittances because banks attribute the origin of funds to the most immediate source.


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