Remittances to Philippines Increase after 9 Month Fall

March brought with it some positive news for those who regularly send money to the Philippines, with remittance flows to the island-nation rebounding after a nine-month fall. The news was reported by Bangko Sentral ng Pilipinas on Monday 15th May and showed that cash remittances or bank transfers flowing through banks and formal channels hit $2.671 billion in March 2023, a marked increase on the $2.569 billion recorded in February 2023, and even up on the $2,594 billion recorded in March 2022.

This strong performance pushed the first-quarter remittances for 2023 to $8.002 billion, which is 3% higher than the $7.771 billion recorded in Q1 2022. Year-to-date personal remittances also climbed by 3%, moving from $8.646 billion to $8.905 billion.

The US Sends the Highest Share of Remittances to the Philippines

The United States is leading the charge on rising remittances to the Philippines, posting the highest share during the period at 41.4%, followed by Singapore at 7.3%, Saudi Arabia at 5.8%, Japan at 5.1% and the United Kingdom at 4.4%.

While the United States sends five times more money than its closest competitor, significant sums come in from across the globe, and many will be asking: what is the best way to send money to Philippines?

Jonathan Merry, CEO of MoneyTransfers.com explains that as one of the most popular remittance corridors in the world, customers sending money from the United States to loved ones in the Philippines can benefit from a wealth of options:

Although the best way to send money to the Philippines depends on your own personal circumstances, we would usually recommend using a money transfer operator, which tends to be faster, cheaper and more reliable than using a bank. Most MTOs have paired with banks in the Philippines to allow them to move money quicker and for a lower fee”

Jonathan Merry, CEO of MoneyTransfers.com

The Weakness of the Peso Caused the Rebound

The rebound in remittances to the Philippines is undoubtedly good news, but some may wonder what lies behind the positive development and whether it represents a trend that is here to stay. Economist Ruben Carlo O. Asuncion believes that the weakness of the peso against the US dollar may have propelled the charge, with US-based Filipino workers jumping at the opportunity to send their hard-earned cash to families back home while exchange rates are favourable.

China Bank’s Chief Economist, Domini Velasquez, has also theorised that these favourable conditions in advanced economies are fuelling the growth in remittances. The United States, for example, now looks set to be heading for a soft landing, with a robust labour market and recession only expected in the fourth quarter, while the Eurozone and the United Kingdom are also both projected to avoid recessions entirely this year.

At the same time, high-levels of inflation and higher prices in many of the host countries of Filipino workers may have been reducing the amount of cash available to be sent overseas, contributing to the dip in remittances over the preceding year.

Remittances from Both Land and Sea Workers Increases

As the economic pressures on these workers begin to ease – whether because of wage growth or a slowdown in inflation – the prospect of more money passing to the Philippines increases. The signs of this are already showing, with Bangko Sentral ng Pilipinas reporting that remittances from land-based workers jumped by 3.7% in March 2023, moving from $1.94 billion last year to $2.02 billion this year, while those from sea-based workers increased by 1.3% over the same period, moving from $566 million to $573 million.

We at Moneytransfers.com are optimistic that the worst of the economic headwinds are now behind us, and the future is beginning to look brighter for inbound remittances to the Philippines.