MANILA – Cash remittances recovered in October to a two-month high, the central bank reported on Friday, as overseas Filipino workers (OFWs) took advantage of a weaker peso to get more out of their funds.
Money sent home by migrant workers reached $2.275 billion that month, up by 8.4% from $2.099 billion inflows in October 2016, the Bangko Sentral ng Pilipinas (BSP) said.
The amount is the biggest since August’s $2.499 billion — when remittances fell by 3% — and is the sharpest climb since a 10.7% increase in March.
This brought the 10-month tally to $23.056 billion, posting a 4.2% rise from the $22.124 billion during the comparable period last year. This is more robust than the 4% growth expected for remittances for the entire year, which would settle at $28 billion.
In a statement, the central bank attributed the pickup in remittances to a 4.2% increase in amounts sent by both land-based and sea-based workers.
In a press briefing, BSP Deputy Governor Diwa C. Guinigundo said OFWs “could have taken advantage” of the sustained depreciation of the peso during the period, as well as the continued deployment of Filipinos abroad.
October saw the peso trade at 11-year-lows, even hitting a peak of P51.77 to a dollar on Oct. 25. The local unit averaged at P51.3433 versus the greenback during the month, according to BSP data.
A weaker exchange rate meant dollars sent home by OFWs carry bigger values once converted to the local currency, arming their families with more money to spend.
“[T]his October 8.4% increase is very strong. I highly suspect that OFWs have been taking advantage of the weak peso,” added Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines.
“In terms of the BSP goal, I expect 2017 remittances levels will be higher than 2016. The momentum is there and I am quite confident the goal will be met.”
The remittances tally in October likewise rebounded from an 8.3% decline in the previous month, when more Filipinos in Saudi Arabia opted to go home under an amnesty program for undocumented workers.
A total of 8,467 OFWs availed of the repatriation program as of end-September, according to data from the Department of Foreign Affairs.
The United Arab Emirates is the biggest source of remittances in October, the central bank said. Other major sources of remittances are the United States, Saudi Arabia, Singapore, and Japan.
Remittances support domestic consumption, which in turn spurs overall economic growth.