Cash remittances slowed steeply in November last year amid the expected uptick of remittances nearing the holiday season.
The Bangko Sentral ng Pilipinas (BSP) said on Wednesday the money sent by millions of migrant Filipino workers aggregated $2.12 billion in November last year, representing growth of 2 percent compared to the same month the year before.
The surprise 2-percent uptick was the slowest in five years, or since January 2009, when remittances grew by just 0.1 percent.
This was also the steepest slowdown to date.
BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said volatility in the foreign exchange is partly to blame for the deceleration.
“In the past, when the dollar appreciates against the peso, the tendency is for overseas workers to adjust so that the peso value of their remittance will more or less be the same. So if the peso depreciates against the dollar, then they can afford to send a lower amount of dollar remittances, while the peso equivalent will be broadly the same,” Guinigundo told reporters at the sidelines of the Papal Commemorative Coin launch.
The peso traded at 44 to 45 against the US dollar in November last year, weaker compared to the 43 to 44 to a dollar band in November 2013.
“But if you look at the cumulative, it is still in excess of our target,” Guinigundo quickly added. The month’s actual remittance volume was also slower than the $2.22 billion reported in October 2014.
The remittances brought the 11- month aggregate to about $23 billion. While the remittance growth in the January-to-November period last year slowed to 5.7 percent from 6.2 percent in the January-to-October period, this was still within the government’s assumed rate of a 5.5-percent growth for 2014.
The BSP reported cash remittances from land-based workers hitting $16.9 billion, while remittances from sea-based workers hit $5.1 billion.
“The continued deployment of skilled manpower remained a key driver of the sustained growth of remittance flows,” the central bank said.
The top country remitters were from the United States, Saudi Arabia, the United Arab Emirates (UAE), the United Kingdom, Singapore, Japan, Hong Kong and Canada.
The central bank also cited the job orders data from the Philippine Overseas Employment Administration showing 855,357 approved job orders in January-to-November 2014, 38.3 percent of which were processed job orders intended for service, production and professional, technical and related workers in Saudi Arabia, the UAE, Kuwait, Taiwan and Qatar.
Guinigundo also said they expect to see a recovery in December as migrant workers historically send more in the final month of the year for the holiday expenses for beneficiary families.