Overseas Filipinos’ remittances coursed through the banks rose 2.9 percent in January from a year earlier, but fell 13.6 percent from December 2024, the Bangko Sentral ng Pilipinas (BSP) said yesterday.
In dollar terms, total remittances in January 2025 increased to $2.92 billion from $2.84 billion in January 2024, the BSP said.
On a month-on-month level, however, January’s remittances declined 13.6 percent from December 2024’s $3.38 billion. Analysts attributed this to the seasonal effects of the usual splurge during the holidays and the eventual slowdown in the succeeding months.
Remittances coursed through informal channels, such as those sent into the country through homecoming relatives and friends, grew 2.9 percent to $3.24 billion in January 2025 from $3.15 billion in the year-earlier period. Such remittances in January 2025 dropped 13.1 percent from $3.73 billion in December 2024.
US biggest source
The BSP said Saudi Arabia, the US, Singapore and the United Arab Emirates all contributed to growth in remittances.
“In terms of country sources, the US accounted for the largest share of overall cash remittances in January 2025,” the central bank said.
The BSP clarified that the ranking of country-sources had some limitations. A common practice by money centers is to course remittances through correspondent banks, most of which are in the US, the BSP said.
Most money couriers also have their main offices in the US.
“Therefore, the US would appear to be the main source of overseas Filipinos’ remittances because banks attribute the origin of funds to the most immediate source,” the BSP said.
The BSP also noted that the increase in cash and personal remittances was observed from land-based and sea-based workers.
Seasonal highs/lows
Remittances were seasonally at their highest in the last quarter of the year. In December 2024 alone, both cash and personal remittances were highest on record on a per-month basis.
Full-year 2024 total hit an all-time high of $38.34 billion. This amount represented 8.3 percent of the country’s GDP and 7.4 percent of the gross national income, the BSP said.
Jonathan Ravelas, BDO lead strategist, said the slight decline “is not alarming.”
“(The month-on-month decline was) more of seasonal effects as the bulk of remittances are in the fourth quarter,” Ravelas said, adding that he is still seeing full-year 2025 remittances rising by 3.1 percent.
Economist Victor Abola from the University of Asia and the Pacific said year-on-year growth is normal.
“Month-on-month, it will usually decline since December reports very high remittances,” Abola said.
“Remittances posted a steady expansion again in January, highlighting the robust nature of these flows,” Nicholas Mapa, Metrobank chief economist, said in a Viber message on Monday.
Forex fluctuations
“In dollar terms, growth may have been muted. However, in peso terms, remittance flows grew 6.8 percent, indicating an increase in the peso purchasing power of beneficiaries,” Mapa said.
Matt Erece, an economist from Oikonomia Advisory and Research, said the slowdown in remittances is “expected as the holiday season came to a close.”
He said that this year if global economic uncertainty persists due to trade wars and geopolitical tensions, “remittances might slow down as OFWs try to mitigate the risks of higher living costs abroad.”
“Other factors that we may have to monitor include the exchange rate. If the US Fed becomes more cautious of their monetary policy, the peso may slightly depreciate, which can entice OFWs to remit more of their earnings to the country amid the elevated peso value of the dollar. We may have to monitor these factors to see the outlook of remittances this year,” Erece said.
