The Bangko Sentral ng Pilipinas (BSP) announced on Wednesday that the personal remittances of overseas Filipinos (OFs) in January rose to 8.5 percent, which reached up to $2.4 billion (P120.8 billion).  BSP said that land-based workers continue to influence the increase, while remittances from sea-based workers declined by 8.3 percent.

BSP said that OF remittances from land-based workers with one year or more contracts transferred $1.9 billion (P95.5 billion) in January. This was 13.5 percent higher than the reported remittances last year of the same period. The contribution of sea-based workers with one year or more work contracts, however, declined by 8.3 percent due to stiffer competition in the supply of seafarers.

Seafarers’ deployment decline

The Philippine Overseas Employment Agency (POEA) confirmed the decline of deployment among Filipino seafarers since last year due to the slowdown in the global shipping industry. Initial data from the agency indicated that there were only 406,531 seafarers deployed in 2015 while only 304,329 seafarers were sent abroad last year. This was down by 25 percent.

 “Bulk carriers have been struggling immensely; even giants in the container industry have been reporting losses for the past years,” Sunstar reported Carl Martin Faannessen, managing director of Abojeb Company, as saying.  Faannessen said that the offshore market and the petroleum industries have suffered due to the decline in oil prices.

Faannessen added that the offshore market will continue to be problematic, but he said that the crisis also gave the opportunity for ship owners around the world to focus on the human element on board. He said that the demand for non-officers will still be stable. Aside from the Philippines, other top supplying countries for seafarers are India, China, Myanmar and Eastern Europe.

Major sources of remittances

BSP said the bulk of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Japan, Singapore, Hong Kong, Qatar, Kuwait, Hongkong, and Australia. The combined remittances from these countries accounted for more than 79 percent of total cash remittances.

The growth of personal remittances was also due to the major contributions from United States, Singapore, Qatar and Japan. Remittances from the US grew by 9.2 percent, contributing 3.0 percentage points to the 8.6 percent overall growth. Remittances from Singapore, Qatar and Japan rose by 19.7 percent, 57.8 percent, and 16.0 percent, respectively, with a combined 3.8 percentage points contribution to total growth in cash remittances.

OF remittances play a crucial role in the Philippine economy as it continues to drive household spending, which has been contributing up to 70 percent to the country’s Gross Domestic Product (GDP).

What do you think of BSP’s announcement on the January personal remittances of OFs? Let us know in the comments section below.