Manila: Overseas Filipino Workers' (OFW) remittances soared to a record high in 2023, reaching $37.2 billion, according to official data released.
The Bangko Sentral ng Pilipinas (BSP) said the United States emerged as the leading source of remittances, followed by Singapore, Saudi Arabia, Japan, and the United Kingdom, and the UAE.
This surge in inward remittances was primarily fueled by the increased deployment of OFWs, reflecting the rising demand for foreign labour in host countries.
The BSP highlighted that these remittances accounted for approximately 8.5 per cent of the Philippines' gross domestic product (GDP) and 7.7 per cent of its gross national income (GNI) in 2023.
Top 10 Sources of Remittances to the Philippines 2023
Cash remittances channeled through banks amounted to $33.5 billion, marking a 2.9 percent increase from the previous year.
In terms of regional sources, BSP data shows that the Americas led with $15.38 billion, followed by Asia with $13.28 billion, and the Middle East with $5.82 billion.
Looking ahead, there is anticipation of continued modest growth in OFW remittances, particularly in response to the need for OFW dependents to cope with rising prices.
Seasonal increases in remittances are expected around the Christmas holiday season and during July to August, coinciding with changes in the start of the school year.
However, risks such as an economic slowdown in the US, softer growth in China and Europe, and geopolitical tensions could potentially dampen employment opportunities for OFWs.
Looking ahead
According to a December report by S&P Global Market Intelligence, remittance inflows from overseas workers, the rapid expansion of the IT-BPO sector exports, and the ongoing recovery of the tourism industry are anticipated to bolster economic growth throughout 2024.
Additionally, the report suggests that international visitor arrivals doubled in 2023 compared to 2022, propelling a notable resurgence in international tourism revenues.
Economic indicators reveal that the Philippine economy has sustained robust growth, with a year-over-year GDP expansion of 5.9 percent in the third quarter of 2023.
Furthermore, the latest S&P Global Purchasing Managers Index survey for November 2023 indicates that the manufacturing sector in the Philippines is among the fastest-growing among major economies globally.
The surge in OFW remittances underscores their pivotal role as a resilient and significant driver of the Philippine economy, providing crucial support to both household incomes and the national economy as a whole.
