According to the latest media advisory from the Bangko Sentral ng Pilipinas (BSP), personal remittances from Overseas Filipinos (OFs) saw a notable increase of 3.1% in April 2024, reaching US$2.86 billion.
This growth continues to underscore the vital role of remittances in the Philippine economy, acting as a critical lifeline for many families and a significant contributor to the country’s overall financial health, as stated by the BSP in its June 2024 report.
BSP report underscores the vital role of remittances in the country’s economy
The uptick in remittances for April 2024 was driven by increased transfers from both land-based workers with contracts exceeding one year and sea- and land-based workers with shorter contracts.
These categories of Filipinos working abroad demonstrate remarkable dedication, consistently sending robust remittance flows that reflect the sustained demand for Filipino labor overseas and their unwavering commitment to supporting their families back home.
According to a recent DBP report, remittances can also serve as capital for starting businesses. Thus, such overseas cash flows can help raise the standard of living of recipient families. As one of the world’s largest recipients of remittances, the Philippines received roughly 12% of its gross domestic product through this channel in 2008.
Key contributors to remittance growth, according to BSP
According to the Bangko Sentral ng Pilipinas, personal remittances from Overseas Filipinos (OFs) grew by 3.1% to US$2.86 billion in April 2024, compared to US$2.77 billion in April 2023.
This increase was driven by both land-based workers with contracts exceeding one year and sea- and land-based workers with shorter contracts.
The BSP also reported a 2.8% rise in cumulative personal remittances for the first four months of 2024, reaching US$12.01 billion, up from US$11.68 billion in the same period of 2023. This highlights the resilience and selflessness of OFs in supporting their families and contributing to the Philippine economy despite global uncertainties.
The United States, Saudi Arabia, and Singapore were the main sources of remittance growth, consistently ranking as top destinations for Filipino workers due to better employment opportunities and wages. Strong economic ties and large Filipino communities in these regions bolstered remittance inflows throughout the first four months of 2024.
Cash remittances coursed through banks also saw an expansion, reaching US$2.56 billion in April 2024 from US$2.48 billion in April 2023. This growth reflects increased receipts from both land- and sea-based workers. On a year-to-date basis, January-April 2024 cash remittances amounted to US$10.78 billion, a 2.8% increase from US$10.49 billion in the same period of 2023.
In terms of country-specific contributions, the United States remained the largest source of remittances, followed by Singapore and Saudi Arabia. These three countries combined accounted for a substantial share of the overall remittances, demonstrating their importance as key destinations for Filipino workers.
Beyond remittances, a sign of economic optimism
In a related development, the BSP also reported an expansion in bank loans by 9.6% in April 2024. This growth signifies increased economic activity and financial intermediation, further fueling the country’s economic recovery and bolstering future growth prospects.
The ongoing increase in both remittances and bank lending underscores the vital role of financial stability and development in the region.
A robust financial system facilitates the flow of remittances, while a growing economy with increased access to credit (as indicated by bank loan expansion) empowers Filipinos, both at home and abroad.
The BSP report positions the continuous growth in remittances from Overseas Filipinos as a testament to their enduring legacy and contribution to the Philippine economy. As the country navigates economic challenges, the support from Overseas Filipinos remains a crucial pillar for many Filipino families.
The BSP’s data not only highlights the significant role of remittances but also emphasizes the importance of sustaining economic and financial policies that benefit both the Filipino diaspora and the domestic economy, fostering a mutually beneficial relationship.