OFW remittances to stay resilient despite global uncertainty — Maybank

STABLE GLOBAL labor conditions for Filipinos and diversified sources may help cushion the impact of global uncertainties on remittance flows to the country, according to Maybank Investment Bank.

Maybank Chief Economist Suhaimi Ilias and economist Azril Rosli said they still expect cash remittances to grow by 2.8% to $36.5 billion in 2026, noting signs of resilience in underlying remittance trends.

This is a tad faster than the central bank’s projected 2.7% climb in remittances to $36.6 billion this year. However, it will be weaker than the 3.3% growth to $35.6 billion seen last year.

“Moving forward, OFW (overseas Filipino worker) remittances are expected to remain broadly resilient over (the second half of 2026), supported by stable overseas employment conditions and continued demand for Filipino workers across key destination markets,” Mr. Ilias and Mr. Rosli said.

However, they also flagged potential risks from the over four-month long Middle East war, which they said may keep remittances growth subdued throughout the year.

“(W)e maintain our projection for 2026 remittances to grow by 2.8% year on year to $36.5 billion, although downside risks from heightened geopolitical tensions, particularly in the Middle East, remain elevated and may contribute to month-to-month volatility,” Mr. Ilias and Mr. Rosli said.

“Growth momentum is likely to remain modest amid softer global economic conditions and elevated geopolitical uncertainties,” they added.

The latest Bangko Sentral ng Pilipinas (BSP) data showed that growth in cash remittances remained at a four-year low of 2% to $2.713 billion in May. This is likewise the lowest inflows seen in a year or since the $2.658 billion in May 2025.

The United States remained the largest source of OFW remittances in May, accounting for over 39% of the total.

However, the BSP noted that this might only reflect the fact that most remitting banks are based there and that not all remittances recorded from the US were generated within the country.

Remittances from other top country sources such as the Philippines’ neighbors Japan and Taiwan, Middle Eastern nations Saudi Arabia and the United Arab Emirates, as well as Canada picked up month on month.

“Collectively, these trends point to continued resilience in remittance dynamics across key source markets,” Mr. Ilias and Mr. Rosli said.

“Although headline growth remained moderate, the broad diversification of remittance sources continues to provide an important buffer against external shocks, helping sustain overall remittance inflows amid heightened global uncertainty,” they added.

OFWs based in the Middle East sent home $447.73 million in May, 8.9% lower than the $491.569 million they remitted in April. Nearly 20% of all remittances flowing to the country are sourced from the region, which hosts over 2.4 million Filipinos.

Meanwhile, total money sent home by OFWs in the January-to-May period hit a record-high $14.11 billion, climbing by an annual 2.5% from $13.766 billion.

Mr. Ilias and Mr. Rosli said this means migrant Filipinos’ remittances have held up despite a “challenging external environment.”

This came even as the five-month remittance growth stood as the weakest since the onset of the COVID-19 pandemic in 2020, when remittances during the same period declined by 6.4%.

Meanwhile, the Maybank economists’ remittance forecast also comes on the back of its projection that the peso will settle at the P61 mark against the dollar by yearend.

Safe-haven demand for the greenback amid persistent uncertainties surrounding the ongoing Middle East war has weighed on the local unit, pushing it to test back-to-back historic lows.

From the P57- to P58-a-dollar prewar level, the peso has plunged to average over P61 versus the greenback in May and June. It hit a record-low of P61.75 to the dollar on May 18 and 19.

Maybank likewise projects the peso to finish at P61 against the dollar in 2027. — Katherine K. Chan