Remittances at monthly high of $1.7B

The Bangko Sentral ng Pilipinas (BSP) on Monday reported that remittances sent home by  overseas Filipinos reached $1.74 billion (roughly P75 billion) in June, the highest recorded for a month, rising by 7 percent over the $1.62 billion recorded in the same month last year.

This brought total remittances in the first half of the year to $9.63 billion, up 6.3 percent from the $9.06 billion posted in the same period last year.

Major sources of remittances in the first six months of the year were the United States, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy and Germany.

Given the continued growth in remittances, central bank officials said they find no reason at this time to revise the official remittance growth forecast this year of 7 percent, noting that remittances in the second half could be even stronger despite the impact of uncertainties in the Middle East and Northern Africa and debt problems in Europe.

They added that other labor markets continue to demand Filipino labor.

The BSP also said the move of Philippine banks to expand offshore or forge tie-ups with remittance agents abroad has allowed Filipino workers abroad to easily send money, thus encouraging them to remit more funds.

Remittances are a closely watched indicator in the Philippines because money sent home by Filipinos living and working overseas fuels household consumption, which is in turn a significant economic growth driver.

For this year, the government wants the economy to grow by between 5 and 6 percent. It grew by 4.9 percent in the first quarter.

The sustained rise in remittances has also been credited for shoring up the country’s total reserve of foreign exchange, which is now at a record $70 billion.

Foreign exchange reserves determine the country’s ability to pay for imports, pay debts denominated in foreign currencies, and engage in other commercial transactions with the rest of the world.