REMITTANCES — a key pillar of the Philippine economy — will likely post slower growth as global uncertainties weigh on overseas employment and income prospects, a Bangko Sentral ng Pilipinas (BSP) official said.
“Remittances are still expected to grow in the next two to three years, albeit at a slower pace amid global uncertainties,” BSP Deputy Governor Zeno Abenoja told The Manila Times.
“The main risks to remittance growth are weaker labor demand in host economies and geopolitical tensions, particularly in the Middle East,” he added.
The outlook carries significant implications for the Philippines, where remittances are equivalent to around eight percent of gross domestic product (GDP), helping sustain household spending and providing a steady source of foreign financing.
Data from the BSP’s third-quarter 2026 Consumer Expectations Survey showed that food and other household expenses were the most common uses of remittances, with 98 percent of remittance-receiving households reporting that they used the money for these needs.
Education and healthcare were also among the main uses.
Abenoja said the importance of these inflows extended beyond immediate consumption.
“Remittances not only help households meet their day-to-day needs but also contribute to investments in human capital and long-term financial well-being,” he said.
Among the principal risks to remittance growth are reduced demand in host countries and geopolitical tensions, particularly in the Middle East.
“Slower economic growth in host countries, tighter immigration policies, and workforce localization initiatives may reduce hiring opportunities for overseas Filipinos and limit wage growth,” Abenoja said.
“These developments could also raise the need for evacuation, repatriation, and reintegration support for affected workers,” he added.
Remittance growth has slowed since the war in the Middle East broke out in March. While July saw a rebound, the rate remains below the 3.0 percent and above seen prior to the conflict.
Based on latest BSP data, overall remittances grew by 2.0 percent to $3.6 billion in July, with cash remittances in particular up by 1.9 percent to $3.37 billion.
Year to date, personal remittances expanded 2.3 percent to $22..73 billion, with cash remittances also 2.3 percent higher at $20.39 billion.
The central bank expects remittances to grow by 2.7 percent and reach $36.6 billion this year.
Abenoja said the Middle East was of particular concern “given its importance as a destination for overseas Filipinos.”
“While remittances have historically shown resilience and a countercyclical nature, the current contraction in deployment highlights vulnerability to geopolitical shocks, which could weigh on remittance flows,” he added.
Beyond geopolitical tensions and slower growth in host economies, Abenoja said technological changes could also reshape overseas employment over the medium term.
“Over the medium term, advances in artificial intelligence and automation could also change the nature of work,” he said, “especially in occupations involving routine tasks while increasing demand for higher-level technical skills.”
This presents a longer-term challenge for Filipino workers and the remittance-dependent households they support.
“Overall growth is likely to be modest, hinging on diversification of migrant corridors and adaptation to shifting global labor needs,” Abenoja said.
As labor markets evolve, the BSP official said the types of skills sought by overseas employers could change, affecting employment opportunities and the potential for wage growth.
“The goal is for remittances to contribute not only to current consumption, but also to long-term economic security,” Abenoja said.
