July Remittances Pace Slows Down as Peso Depreciates

The weaker peso value against the dollar has allowed overseas Filipinos to send fewer dollars to their families in July.

This comes as data from the Bangko Sentral ng Pilipinas (BSP) show that cash remittances were lower this month compared to the growth recorded in June.

Cash remittances in June had a 4.4 percent growth year-on-year, while year-on-year cash remittances in July dropped to 2.3 percent.

Meanwhile, the BSP recorded a year-to-date cash remittance total of USD18.26 billion.

Remittances are receiving a boost as the peso plunges to all-time lows against a surging dollar due to aggressive interest rate hikes by the U.S. Federal Reserve as a lower peso value against the dollar equates families of overseas workers to being able to receive a greater amount of peso without the overseas worker sending a lot of dollars.

While the current exchange rate is beneficial to families, a surging dollar is pushing inflation rates in the country higher.

Remittances from overseas workers are considered one of the most important facets of the Philippine economy and are one of the government’s sources of dollars.

In 2021, remittances totaled USD31.42 billion, which is over 5 percent higher than the total remittances the country received in 2020 during the height of the COVID-19 pandemic. (GFB)