Remittance hits $30M for the very first time
- Details
- Category: Economic Releases
- Created: 09 May 2017
Remittances December 2016
| * TOP $m |
Dec 16 |
Nov 16 |
Oct 16 |
Sep 16 |
| Remittance Receipts |
30.01 | 22.26 | 23.20 | 22.93 |
| Private Transfers |
28.75 | 20.30 | 21.23 | 20.68 |
| Employee Compensation |
1.08 | 1.32 | 1.36 | 1.76 |
| Private Capital Transfer | 0.10 | 0.59 | 0.54 | 0.43 |
| Social Benefits | 0.08 | 0.05 | 0.07 | 0.06 |
| * Month-ended |
||||
Remittance receipts hits a new monthly record of $30 million with a yearly record of $269.8 million in December 2016. In 2016, the monthly average for remittance was at $22.5 million.
Over the month, remittances rose by $7.8 million as both private transfers and social benefits increased by $8.5 million and $0.03 million respectively. Over the year, all categories of remittance increased with the exception of social benefits, as lower receipts of individuals’ pension benefits from abroad. Private transfers was the major contributor to the yearly trend rose by $38.3 million (18.4%). The rise in remittances over the year was supported by the celebrations during the year including Tupou College 150th anniversary, Queen Mother’s 90th birthday, Latter Day Saints Tonga Mission 100th anniversary, family reunions in addition to annual events such as Mother’s Day, church conferences, Children’s White Sunday, Heilala and Christmas festivities.
Although total remittances reached the highest level in December, total remittances for the month represented 33% of the total overseas exchange transaction (OET) receipts, compared to 43% in the previous month. This is due to the increase in other receipts particularly official grants.
Despite the weakening of the New Zealand dollar (NZD) and the Australian dollar (AUD) against Tongan Pa’anga (TOP) during the month, remittance receipts in all currencies rose over the year with the New Zealand dollar (NZD) increasing the most by $2.71 million (54.7%) followed by the Australian dollar (AUD) with $2.68 million (33.2%). Remittances to Tonga may not be sensitive to exchange rate fluctuations but driven by the basic needs of families and friends in the Tonga, major celebrations and annual events.
Remittances in United States dollar (USD) rose by $2.05 million (25.5%) supported by the strengthening of the USD against TOP over the month. In December, AUD continued to be the dominant currency for receipts of remittances with 35.8%, USD followed with 33.6% and NZD with 25.5%.
Foreign Exchange Dealers (FEDs) continued to be the preferred medium for transferring of remittances. In December 2016, 90% ($27.1 million) of the total remittance receipts during the month were received via FEDs, compared to 89% ($19.8 million) of the previous month and 91% ($24.5 million) in December 2015.
Private Transfers
Private transfers at $28.8 million, represented 96% of the total remittance receipts and 31% of the total OET receipts. Family support receipts via FEDs in AUD, NZD and USD rose by $3.0 million, $2.9 million and $1.8 million respectively.
Employee Compensation1
Compensation of employees fell by 18.0% ($0.2 million) to $1.1 million over the month, representing 4% of the total remittances. Receipts from Recognised Seasonal Employer (RSE) Scheme workers fell by $0.4 million (70.4%), whereas other wages and salaries rose by a $0.1 million (16.3%). In the 12 months to December 2016, employee compensation reached a total of $19.3 million. Total employee compensation over the year, was mainly for other wages and salaries (including Tongans working abroad and Tongan residents serving foreign organizations locally) at $10.70 million (55%) and the remaining 45% were from RSE.
|
Receipts from Seasonal Employees (RSE) over the last 5 years Total receipts from RSE over the last 5 years to November 2016 were at $34.8 million, with a monthly average of $0.6 million. In the 12 months period to November 2016, receipts from RSE recorded a monthly average of $0.7 million. Majority of the receipts were from New Zealand with an average of around 67% of the total RSE over the last 5 years, whereas around 95% of the total RSE were received via FEDs. RSE accounts for around 3% of the total remittances. The peak months for receiving funds from seasonal employees were mainly in May every year and also June and August 2016. May, the month for family which Tonga celebrates White Sunday, Mother’s Day and Father’s Day. In addition to the annual church conferences, the celebration of Tupou College 150th anniversary and Latter Day Saints Tonga Mission 100th anniversary also contributed to the high level of receipts in June and August 2016. |
Private capital transfer & Social Benefits
Other private transfers for capital expenditures fell by $0.5 million (83.2%) to $0.1 million in December. During the month, there were lower receipts by households for house construction and renovation related activities compared to the previous month. Social benefits on the other hand rose by $0.03 million (53.9%) over the month. Private capital transfers and social benefits accounted for only 0.6% of the total remittance receipts.
Outlook
Remittance receipts are expected to decline in the following months after the peak Christmas holiday season and festivities in December. The NRBT 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.
Download the full report:Remittances Report - December 2016
