Remittances hit 7-month high in July

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Metro Manila (CNN Philippines, September 15) — Overseas Filipinos sent more money home in July, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The BSP on Tuesday reported total remittances of $3.16 billion during the month - up 2.6% from the same month last year. This is the highest number tallied since December last year, when Filipinos abroad remitted $3.2 billion.

The central bank attributed the increase in July to higher remittances from land-based laborers with contracts of at least a year — growing by 1.6%. Remittances from short-term seafarers and land-based workers also expanded by 6.9%.

The recent figure brought overall remittances for 2021 to $19.78 billion so far - a 6% climb from the $18.65 billion registered from January to July last year.

The biggest bulk of money sent back to loved ones in the Philippines came from the United States, Malaysia, and South Korea for the seven-month period, the BSP added.

With the latest figures, economists expect remittances to continue growing in the months ahead.

The observed growth is "somewhat defying the pandemic," said RCBC chief economist Michael Ricafort, who cited host countries' efforts to further reopen their economies in light of wider vaccination rollouts.

"With job losses back home elevated and the economy in recession, we expect OF remittances to accelerate to pick up the slack and boost local spending," ING Bank senior economist Nicholas Mapa said.

Remittances are among Filipino families' sources of income — with money sent back home used to pay for basic commodities and utilities, along with luxuries. This boosts household expenditure and buoys economic activity, which quarantine restrictions and pandemic fears have weighed on.

The sustained entry of remittances — along with the recovery in business process outsourcing receipts — will help offset the country's ballooning trade deficit, Mapa added.