REMITTANCE INFLOWS. Inflows from overseas Filipino workers (OFWs) continue to rise, with the February 2023 cash inflows up by 2.4 percent year-on-year to USD2.569 billion. While the latest cash inflows from Filipino working abroad are lower than the previous month's level, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said Monday (April 17, 2023) year-on-year growth remains resilient despite the impact of elevated inflation rate and possible recession in the US. (PNA file photo)
MANILA – An economist remains optimistic about the path of overseas Filipino workers’ (OFWs) remittances amidst the elevated inflation rate and concerns about the possible United States recession.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Monday showed a 2.4 percent year-on-year increase in cash remittances to USD2.569 billion in February this year.
Although the cash inflows last February were lower than the previous month’s USD2.76 billion, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the latest inflows are “still a good signal for the economy.”
“The slowdown in OFW remittances data may also have to do with the relatively higher prices/inflation/cost of living in major host countries for OFWs that fundamentally reduced the remittances sent back to the Philippines,” he said.
Ricafort said the weakening of the peso against the US dollar is also a factor for the lower remittances last February.
The peso weakness, he added, “also partly reduced the need to send more OFW remittances due to higher conversion rate for the US dollar vs. the Philippine peso.”
Ricafort said the risk of recession for the world’s largest economy may likely dampen OFW remittances due to slower global trade/exports, investments/FDIs (foreign direct investments), and other business/economic activities.
He also attributed the sustained year-on-year rise in remittances to the faster recovery of OFW-host countries.
Remittances from OFWs are among the growth drivers of the domestic economy as these boost consumer spending, which accounts for at least 75 percent of the economy.
“For the coming months, single-digit/modest growth in OFW remittances could continue as OFW families/dependents still need to cope up with relatively higher prices/inflation locally that would require the sending of more remittances, as well as some normalization of spending by consumers/households for both essential and non-essential as the economy reopened towards greater normalcy,” he added. (PNA)
