Remittances

February 2018

Released on 31 May 2018 | Download the complete release |  200 KB

Monthly receipts for family support remained above $20 million

The total monthly remittances fluctuate on a monthly basis but has remained above $20 million since February 2016. In February 2018, remittances continued to decline by $1.4 million (5.7%) to $23.6 million yet much higher than what was recorded in the same period of previous years. The monthly trend was driven by a decline in private transfer receipts particularly for family support and compensation of employees outweighing a slight increase in receipts for social benefits. Remittances accounted for 33.0% of the total Overseas Exchange Transactions (OET) receipts in February compared to 45.0% in the previous month. The big drop in the share was attributed to the receipt of Tropical Cyclone (TC) Gita Relief Fund which was classified under private capital transfers. The US dollar (USD) remained the most popular currency for remittances as family abroad benefited from the favourable exchange rates. USD receipts has a monthly share of 36.0%, followed by a 30.5% and 24.9% share of total remittances being receipts in Australian dollar (AUD) and New Zealand dollar (NZD) respectively, among others.

Total remittances however continued to rise over the year to February 2018 by $35.8 million (12.1%) and again to a new record high of $332.5 million supported by the events that took place during the year as well as higher receipts of family support sent from families, relatives and friends staying abroad. Additionally, two new Foreign Exchange Dealers (FEDs) that commenced business during the year may have contributed to this new high record.

FEDs continued to be the preferred channel for receiving of remittances. Over the month, 86.8% share of total remittances were received via FEDs compared to 86.7% share recorded last month and 86.6% a year ago. This reflected using of FEDs for sending money are still more convenient than banks, as FEDs have more access points and their services are much quicker.

Private Transfers

Total private transfers continued to decline by $1.4 million (6.3%) to $21.1 million due to lower family support received over the month. This is a similar trend for February over the last two years. Total private transfer receipts in NZD decreased the most by $1.2 million followed by USD and AUD receipts with a decline of $0.2 million and $0.1 million respectively. Receipts of private transfers continued to be the main purpose of remittances which accounted for 89.4% of total remittance receipts and 29.5% of total OET receipts. In year ended terms, the total receipts of private transfers however continued to rise by 12.1% to $306.2 million, due mainly to higher receipts for family support.

Employee Compensation¹

Compensation of employees slightly fell by $0.1 million (10.5%) to $1.1 million, which accounted for 4.8% of the total remittances received in February 2018. This was driven by a fall in the receipts from seasonal workers abroad and for wages and salaries over the month. In year ended terms, receipts for compensation of employees also declined by $1.9 million (10.0%) to $17.2 million, due to a fall in the receipts from seasonal workers abroad. Australia contributed the most seasonal workers’ receipts of $4.0 million while the seasonal workers from New Zealand only contributed $1.4 million. According to liaison with the Ministry of Internal Affairs, the seasonal workers send in-kind remittances to Tonga in the form of containers of goods supporting the decline in receipts.

Private capital transfer & Social Benefits

Total receipts for private capital transfers slightly increased by $0.1 million over the month due to rise in transfers for building, renovating and constructing of houses. In addition, private capital transfers and social benefits receipts accounted for 5.2% and 0.6% respectively of the total remittance receipts over the month. Over the year, private capital transfers rose by $4.7 million drove by project and working capital funds received during the year, whereas social benefits declined by $0.02 million.

Outlook

Remittance receipts are anticipated to increase in the following months due to expected support from families and relatives abroad following the aftermath of Tropical Cyclone Gita. Additionally, the expected rise in total remittance receipts in the near term is supported by the upcoming busy season particularly the family month of May and annual church conferences. 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 seasonal workers abroad, Tongan residents working short term overseas, and resident employees serving foreign organizations.

Remittances Releases

• Remittances Releases for 2018
• 2017
• 2016
• 2015

Remittances Releases for 2018

	January Released on 16 May 2018 | 220 KB		February Released on 31 May 2018 | 200 KB

2017

	December Released on 22 March 2018 | 430 KB		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