4 weeks ago
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Cash remittances coursed through the banking system amounted to $34.493 billion at the end of 2024, three percent higher than $33.491 billion in 2023, based on the latest data from the Bangko Sentral ng Pilipinas (BSP).
Remittances have consistently recorded a growth of three percent year-on-year in past years. The BSP annual remittances projection is based on cash remittances which are the total value of private income transfers sent back by Filipino overseas workers. It is a subset of personal remittances.
Cash remittances are more easily captured since it relies mostly on bank data. But both types of remittances are sent through formal channels such as money transfer operators and in the case of personal remittances, informal networks including relatives, friends and co-workers.
As of end-December 2024, personal remittances which includes personal transfers and capital transfers between households, reached $38.341 billion, also three percent higher than same period in 2023 of $37.21 billion.
It is the highest level to date, according to BSP on Monday, Feb. 17. Personal remittances accounted for 8.3 percent of gross domestic product in 2024, and 7.4 percent of gross national income.
Personal remittances on a monthly basis totaled $3.733 billion in December, also an all-time high. It is up by three percent from $3.625 billion of the previous year.
The increase was observed in remittances from both land-based and sea-based workers, said the BSP.
Last year, personal remittances from land-based workers with work contracts of one year or more amounted to $29.82 billion, up by 3.2 percent from $28.89 billion same time in 2023. Sea- and land-based workers with work contracts of less than one year went up by 2.1 percent to $7.66 billion from $7.51 billion.
Cash remittances also grew by three percent to $3.380 billion for the month of December versus $3.280 billion same time in 2023.
In 2024, cash remittances by land-based workers rose by 3.4 percent to $27.55 billion from $26.64 billion in 2023. Sea-based workers remitted $6.94 billion, up by 1.3 percent compared to $6.85 billion in the previous year.
The BSP noted that the bulk of cash remittances came from the US with 40.6 percent share of the total, followed by Singapore with 7.2 percent; Saudi Arabia with 6.4 percent; Japan with 4.9 percent; the United Kingdom with 4.7 percent; and the United Arab Emirates with 4.4 percent.
The US normally appears as the top country source of remittances because of a common practice of remittance centers coursing remittances through correspondent banks based in the US.
The BSP also explained that remittances via money couriers “cannot be disaggregated by actual country source and are lodged under the country where the main offices are located, which, in many cases, is in the US. Therefore, the US would appear to be the main source of remittances because banks attribute the origin of funds to the most immediate source.”
For 2025, the BSP forecasts cash remittances will grow by again, three percent to $35.5 billion.
The BSP has had several research papers, studies as well as surveys to determine the impact of remittances in supporting households and rural communities. One of these important data is the Consumer Expectations Survey (CES).
Based on the latest CES which was the fourth quarter 2024, about 95.2 percent of remittances are typically spent on food and other household needs such as medical, education expenses, dept payments, and savings.
