Economic Highlights (Philippines) - 16/05/2014

Overseas Remittances Accelerated In March

¨      Philippines’ cash remittances from overseas foreign workers (OFW) picked up by 6.5% y-o-y to USD1.883bn in March, after expanding by 5.6% in February and compared with 5.9% in January. This came in line with the median estimate of +6.5% y-o-y and marked the fastest pace in three months, suggesting that remittances are beginning to pick-up from a slow start to the year amid base effects.

¨      The acceleration in March’s OFW cash remittances was reflected in the increase in transfers from both land-based as well as sea-based workers. At the same time, the pick-up during the month was led by a rebound in the remittances from Europe and an acceleration in cash transfers from the Middle East. These were, however, partly offset by declines in remittances from the Americas and Oceania region, while transfers from Asia slowed during the month. This will likely help to support consumer spending in the country.

¨      Going forward, the ongoing demand for skilled OFW workers will continue to contribute to the steady flow of remittances. Likewise, the continued efforts of bank and non-bank remittance service providers to expand their international and domestic market coverage through tie-ups and establishment of remittance centers abroad to capture a larger share of the global remittance market will provide support to sustain the flow of remittances.

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