The remittances of Overseas Filipinos (OFs) continued to rise in July 2024, reaching US$3.43 billion — a 3.2% increase from the previous month, according to data from the Bangko Sentral ng Pilipinas (BSP).
This sustained growth highlights the significant role that OFs play in supporting the Philippine economy, reinforcing the resilience of Filipino workers abroad.
According to the BSP, the increase in remittances was driven primarily by land-based workers overseas, who sent more money home to support their families amid rising living costs both locally and globally. The rise in cash remittances from the United States, Saudi Arabia, and the United Arab Emirates (UAE) significantly contributed to the upward trend in remittances during the first seven months of 2024.
The BSP’s July 2023 report, titled Traversing New Heights: The Future is Digital, noted that the share of digital payment transactions (e-payments) in the country has also surged from 42.1% in 2022 to 52.8% in 2023. This growth coincided with the rising remittances from OFs, underscoring their positive impact on the country’s shift toward a digital economy.
The increased adoption of digital payments, particularly through e-money accounts, aligns with the growth in fund transfers, as more Filipinos embrace digital transactions for sending and receiving money.
BSP Governor Felipe Medalla stressed the need to maintain momentum in the country’s digital payments journey, saying, “Achieving the target is not the end goal. What we would like to see are lives being transformed by our policies.”
BSP: Cumulative remittances hit U$21.53 billion in first seven months of 2024
From January to July 2024, cumulative remittances from OFs totalled $21.53 billion, marking a 3% increase from the same period in 2023. This growth is a positive sign for the Philippine economy, which has long depended on remittances to boost household consumption, provide foreign exchange, and reduce poverty.
The United States remained the largest source of fund transfers during this period, followed by Singapore and Saudi Arabia. The steady flow of fund transfers from these countries reflects the strong demand for Filipino labor abroad, particularly in industries such as healthcare, construction, and services.
In July alone, cash remittances — money sent through formal channels such as banks — reached US$3.08 billion, a 3.1% increase compared to the same month in 2023.
The rise was attributed to inflows from both land-based and sea-based workers, showcasing the diverse nature of the Filipino workforce abroad. From January to July, cash transfers reached US$19.33 billion, up 2.9% from the US$18.79 billion recorded in 2023.
US, Singapore, and Saudi Arabia lead as top sources of fund transfers
The increase in remittances during this period is largely driven by land-based workers in countries such as the United States, Saudi Arabia, and Singapore.
The United States accounted for the highest share of remittances during the first seven months of 2024.
Filipino workers in the US, benefiting from higher wages and strong demand for their skills, consistently sent substantial amounts of money back home.
Singapore also played a key role as a source of fund transfers, with many Filipinos employed in the services sector of the city-state’s thriving economy.
Meanwhile, the Kingdom of Saudi Arabia, with its large Filipino workforce in construction, healthcare, and domestic services, continued to be a major contributor to remittance inflows.
Impact of remittances on the Philippine economy
Remittances have long served as a lifeline for millions of Filipino families, supporting household consumption, education, healthcare, and housing investments.
In addition, they provide a stable source of foreign currency, helping stabilize the Philippine economy by funding imports, servicing debt, and bolstering the Philippine peso.
The continued growth in remittances also contributes to the country’s positive balance of payments position, cushioning the economy against global uncertainties.
With inflationary pressures and fluctuating export demand posing challenges, remittances from OFs offer a crucial buffer that helps sustain economic growth.
BSP’s outlook for the remainder of 2024
The BSP remains optimistic about the outlook for remittances in the remainder of the year, citing strong demand for Filipino labor abroad. Factors such as rising inflation in the Philippines and increasing interest rates in major economies may encourage OFs to send more money to support their families.
However, potential challenges such as tightening labor markets in host countries and geopolitical uncertainties could impact remittance flows in the latter part of the year. The Philippine government continues to strengthen its support for OFs through various initiatives, including financial literacy programs and incentives for investments in local businesses.
Overall, the steady growth in remittances reflects the resilience and dedication of millions of Filipino workers abroad. As remittances remain a vital pillar of the Philippine economy, they are expected to continue being a critical source of foreign exchange for the country in the years to come.