Remittance performance masked by low base effects<\/strong><\/p>\n\n\n\n Personal remittances of Overseas Filipinos (OF) in peso terms registered its second highest year-on-year (YoY) increase for 2023. We note however, that this spike was likely a result of low base effects as year ago remittance levels were at their lowest for 2022. <\/p>\n\n\n\n On a sequential basis, figures were less impressive as they were weaker compared to the inflows seen in March. Excluding Jan 2023 data as this was likely impacted by seasonality, remittances for the year have so far seesawed from month-on-month (MoM) gains to declines. What is important to note though, is that come Q3 to Q4 particularly in the months of September, October, and November, it will be difficult for remittances to eke out significant growth YoY given that this would be the same time last year that the USDPHP spiked to the 57 to 58 levels.<\/p>\n\n\n\n Implications to the economy<\/strong><\/p>\n\n\n\n Remittances have a notable contribution to the PH economy, accounting for 8.9% of GDP as of 2022. As such, the trend in remittances would be a key factor in driving growth, particularly when it comes to consumption. Currently however, sustained volatility in the sequential growth of inflows as well as the high base in Q3 to Q4 may dampen the impact of remittances to GDP expansion. <\/p>\n\n\n\n In turn, this may have negative implications to listed companies in the consumer sector, and even to those property companies whose target market is composed heavily of buyers who are reliant on money sent by OFWs.<\/p>\n\n\n\n