Remittances surge to fresh peak in 2019

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A surge in remittances in December led to a new all-time high in amounts sent by Filipinos abroad, the Bangko Sentral ng Pilipinas says. (FILE PHOTO)

Metro Manila (CNN Philippines, February 17) — Filipinos abroad sent more money to their families back home in December, hitting a fresh peak, the Bangko Sentral ng Pilipinas (BSP) said Monday.

Personal remittances grew by nearly 2 percent in December to $3.22 billion, the highest monthly inflow on record. Cash sent home by overseas Filipinos totaled $33.47 billion for 2019 -- 3.9 percent higher than the total amounts received in 2018.

This is a seasonal spike in remittances as those working abroad send more money to fund the celebrations and presents for their family and relatives during Christmas and New Year.

Remittances are a big source of disposable income among Filipino families, as the dollars that Filipinos send support food, daily expenses, and even luxuries of their loved ones in the Philippines. This boosts household spending, which props up the country's economic growth.

For the year, the cash which Filipinos remitted accounted for nearly a tenth of the local economy, the BSP added.

OFWs accounted for bulk of the remittances, with those with long-term contracts on land sending home $25.6 billion, the central bank said.

Meanwhile, those at sea as well as temporary workers transferred $7.1 billion worth of funds to their loved ones and beneficiaries in the Philippines.

The bulk of remittances came from the United States, which took a 37.6 percent share. Other major sources of funds were Filipinos in Saudi Arabia, Singapore, Japan, United Arab Emirates, the United Kingdom, Canada, Hong Kong, Germany, and Kuwait.

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However, an economist warned that remittances could hit a snag this year due to the novel coronavirus outbreak, which may limit global economic activity.

"The virus has spread across the globe and will likely affect both deployment and actual work of Filipinos based abroad," ING Bank Senior Economist Nicholas Antonio Mapa said in a commentary sent to reporters.

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"The recent plight of the cruise ships around the world will likely put pressure on cruise liners and the hospitality industry as a whole, making it difficult for Filipinos to send home remittances should their salaries be curtailed or they lose their jobs altogether," he added.

The Diamond Princess cruise ship has docked in Yokohama, Japan with its thousands of passengers and crew as they observe the 14-day quarantine period for the disease. There are over 500 Filipinos aboard the vessel, with the Philippine government now eyeing to evacuate nationals as the virus continues to spread.