Remittances

December 2017

Released on 22 March 2018 | Download the complete release |  208 KB

Christmas & festive season boosted the level of remittances to its highest

Friends and relatives abroad sending money to their loved ones here in Tonga during these festive season, boosted the level of remittances to its highest level in both the monthly and yearly records.

In December 2017, remittance receipts rose to $30.9 million (accounted for 45% of the total OET receipts), which was 23% higher than the previous month. All categories of remittances rose over the month with receipts from private transfers (mainly family support) being the highest, and the receipts from compensation of employees, social benefits and private capital transfers followed.

In year ended terms, total remittances reached $300.9 million, 11% higher than the previous year. This was mainly due to higher receipts for family support over the year in addition to receipts by individuals for house construction and renovation related activities.

The Australian Dollar (AUD) took over the United States dollar (USD) as the dominant currency in remittance receipts which accounted for 35% of the total remittances. The depreciation of Tongan Pa’anga (TOP) against the AUD over the month may have contributed to the trend. USD followed closely with a share of 33% and New Zealand Dollar (NZD) with a share of 27%. Over the month, remittance receipts in these major currencies rose with NZD increasing the most with $2.8 million in addition to the AUD and USD which rose by $1.9 million and $1.3 million respectively.

In December 2017, Foreign Exchange Dealers (FEDs) continued to be the preferred channel for receiving of remittances, which represented 89% of the total remittance receipts compared to 87% in the previous month and 90% in December 2016.

Private Transfers

Total private transfers rose over the month by 25% to $28.7 million. This was mainly due to higher receipts of family support via FEDs as it rose by $5.5 million over the month. The family support receipts in NZD increased the most by $2.4 million in addition to the AUD and USD receipts which rose by $2.0 million and $1.1 million respectively.

Total private transfers is the largest component of remittances which accounted for 93% of the total remittance receipts and 41% of the total OET receipts.

In year ended terms, private transfers rose by 12.5% to $277.6 million, particularly higher receipts of family support from friends and relatives abroad. The main events during the year including the family month of May, June’s festivities (churches’ annual conferences and schools’ anniversaries celebration – Tonga High School & Mailefihi Siu’ilikutapu College) and the Christmas and holiday festivities contributed to the trend.

Employee Compensation¹

Employee compensation rose by 8.6% to $1.5 million over the month which accounted for 5% of the total remittance receipts in December 2017. Receipts from other wages & salaries rose by $0.3 million whereas receipts from Recognised Seasonal Employers (RSE) declined by $0.2 million over the month.

Over the year to December 2017, total receipts from compensation of employees fell by $3.0 million, mainly due to lower receipts from RSE workers.

Private capital transfer & Social Benefits

In December 2017, social benefits and private capital transfers rose by $0.02 million and $0.01 million respectively. Both categories of remittances represented 2% of the total remittance receipts compared to 3% of the previous month.

In year ended terms, private capital transfers increased by $2.8 million whereas social benefits decreased by $0.03 million.

Outlook

Remittance receipts are anticipated to decline from this high monthly level in the following months as the Christmas and holiday season has reached an end. In year ended terms, the Reserve Bank is expected higher receipts of remmitances. The Reserve Bank will continue to closely monitor the remittance receipts given it is the largest source of foreign exchange inflow for the economy.

1 - Employee compensation is the sum of wages and salaries from the Recognised Seasonal Employer (RSE) program, Tongan residents working short term overseas, and resident employees serving foreign organizations.

Remittances Releases

• Remittances Releases for 2017
• 2016
• 2015

Remittances Releases for 2017

	November Released on 2 February 2018 | 208 KB
	October Released on 25 January 2018 | 204 KB		September Released on 27 December 2017 | 457 KB
	August Released on 27 November 2017 | 464 KB		July Released on 16 September 2017 | 214 KB
	June Released on 16 September 2017 | 205 KB		May Released on 15 August 2017 | 469 KB
	April Released on 10 July 2017 | 447 KB		March Released on 29 June 2017 | 450 KB
	February Released on 2 June 2017 | 488 KB		January Released on 2 June 2016 | 490 KB

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2016

	December Released on 9 May 2017 | 451 KB		November Released on 9 May 2017 | 534 KB
	October Released on 11 January 2017 | 438 KB		September Released on 11 January 2017 | 438 KB
	August Released on 25 November 2016 | 444 KB		July Released on 9 November 2016 | 441 KB
	June Released on 5 September 2016 | 227 KB		May Released on 28 July 2016 | 227 KB
	April Released on 15 July 2016 | 205 KB		March Released on 3 June 2016 | 208 KB
	February Released on 2 June 2016 | 208 KB		January Released on 4 May 2016 | 208 KB

2015

	December Released on 4 May 2016 | 213 KB		November Released on 4 May 2016 | 211 KB
	October Released on 1 February 2016 | 471 KB		September Released on 4 January 2016 | 413 KB
	August Released on 4 January 2016 | 429 KB		July Released on 22 December 2015 | 440 KB
	June Released on 9 October 2015 | 255 KB		May Released on 23 September 2015 | 296 KB
	April Released on 22 July 2015 | 224 KB