Remittances for December 2018

Remittances rise during Christmas yet ended lower than last year 1


  TOP$ millions
  Month Ended Year Ended  
  Dec 18 Nov 18 Oct 18 Sep 18 Dec 18 Dec 17 Shares
of totals*

Remittance Receipts 32.6 30.6 28.2 27.7 350.8 327.8 100.0
Private Transfers 30.0 28.2 25.6 24.9 316.4 304.0 90.2
Employee Compensation 1.8 1.5 1.7 1.9 22.6 16.9 6.4
Private Capital Transfer 0.5 0.8 0.9 0.8 10.1 6.1 2.9
Social Benefits 0.3 0.1 0.1 0.1 1.7 0.9 0.5

*Based on year ended remittance receipts numbers
Note: Numbers may not add up precisely to the totals due to rounding errors.
Source: National Reserve Bank of Tonga | Banks | Foreign Exchange Dealers

As expected, total remittances increased in December reflecting the usual trend for December. Each category recorded an increase over the month except receipts of private capital transfers which declined.

This increase in remittances was largely attributed to higher private transfers which partially offset the overall movement (decline) in Overseas Exchange Transaction (OET) receipts. However, the share of total remittances (in the total OET receipts) rose to 42.1% in December from 37.6% last month. The lower OET receipts stemmed from other purposes (official transfers) and higher remittances. The USD currency for remittance receipts was the most favorable currency and recorded a rise to $11.5 million in December. This also coincided with the USD appreciating against the Tongan Pa’anga (TOP) in December which may have contributed to the rise. The AUD currency for remittance receipts followed as the second most favorable currency and recorded a total of $9.9 million which was lower than last month and corresponded with the weakening of the AUD currency against the TOP. The NZD currency for remittance receipts recorded a balance of $9.3 million which is an increase from last month and corresponding to an appreciation of the NZD against the TOP.

Over the year, total remittances increased due to rises in all categories. This resulted in a balance of $350.8 million and was supported by family support, major events, and other social occasions which took place throughout the year. The consistent rise in receipts for family support and from seasonal workers abroad continued to be key drivers in the yearly increase.

During December, the Foreign Exchange Dealers (FEDs) remained as the most popular channel for remittance receipts having accounted for 88.0% share of total remittances. This is higher than the share of 87.2% last month yet lower than the share of December 2017 which was 90.1%. However, the movements still reflect the convenience of sending money via FEDs compared to banks as they have more access points.

Private Transfers

Over December, total private transfer receipts increased by $1.8 million (6.5%) to $30.0 million. This mainly reflected higher receipts of private transfers as gifts, family support, and financial assistance for the festive season. Private transfers were mostly in USD which increased over the month recording a total of $10.9 million. The AUD followed with a total of $9.5 million. However, this was a decline from the previous month. The NZD recorded a total of $8.5 million and increased since last month. Private transfer receipts continued to be the primary purpose of remittances and accounted for 92.1% (about the same as last month) of total remittance receipts. Furthermore, private transfers recorded a share of 38.8% (higher than 37.6% last month) of total OET receipts in December reflecting the more significant increase in the receipts of private transfers. The total annual receipts of private transfers rose by $12.4 million (4.1%) driven mainly by receipts for family support.

Employee Compensation1

The total compensation of employees’ receipts increased over the month to $1.8 million from last month. This resulted mostly from increases in both the AUD and NZD receipts for December. Annually, the total receipts for compensation of employees continued to rise and by $5.8 million (34.2%). This indicates continuous financial assistance from workers abroad which are still being remitted to respective local families.

Private capital transfer & Social Benefits

The private capital transfer receipts decreased by $0.3 million. This was due to lower receipts of private grants for home and household projects (particularly for construction and renovation purposes by families). However, social benefits receipts rose by $0.2 million over the month. The private capital transfer and the social benefits receipts account for 1.5% and 0.9% respectively of the total remittances for December 2018. In year ended terms, the private capital transfers rose by $4.0 million resulting in higher receipts of the project and working capital funds as well as for construction purposes. The receipts for social benefits also rose over the year to November by $0.8 million.

Outlook

Remittance receipts are forecasted to remain at high levels in the upcoming months, however, to increase at a slower pace. This is expected to be supported by family expenses for the commencement of the New Year, the start of the school academic year, and more seasonal workers sent abroad on the Recognised Seasonal Employer (RSE) and Seasonal Worker Programme (SWP) schemes. The Reserve Bank will continue to closely monitor the remittance receipts given it is the largest source of foreign exchange inflow for the Tongan economy.


1 - Published December 2017 Remittances report shows $30.9m but revised data now shows $33.8m noting now that December 2017 recorded higher remittances receipt than that of December 2018.
2 - 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


pdfIcon November
Released on 5 April 2019 | 210 KB
pdfIcon December
Released on 1 May 2019 | 210 KB

pdfIcon September
Released on 7 February 2019 | 210 KB
pdfIcon September
Released on 7 February 2019 | 210 KB

pdfIcon July
Released on 23 November 2018 | 204 KB
pdfIcon August
Released on 23 November 2018 | 388 KB

pdfIcon May
Released on 20 August 2018 | 212 KB
pdfIcon June
Released on 10 October 2018 | 189 KB 

pdfIcon March
Released on 16 May 2018 | 220 KB
pdfIcon April
Released on 20 August 2018 | 192 KB

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

2017


pdfIcon December
Released on 22 March 2018 | 430 KB
pdfIcon November
Released on 2 February 2018 | 208 KB

pdfIcon October
Released on 25 January 2018 | 204 KB
pdfIcon September
Released on 27 December 2017 | 457 KB

pdfIcon August
Released on 27 November 2017 | 464 KB
pdfIcon July
Released on 16 September 2017 | 214 KB

pdfIcon June
Released on 16 September 2017 | 205 KB
pdfIcon May
Released on 15 August 2017 | 469 KB

pdfIcon April
Released on 10 July 2017 | 447 KB
pdfIcon March
Released on 29 June 2017 | 450 KB

pdfIcon February
Released on 2 June 2017 | 488 KB
pdfIcon January
Released on 2 June 2016 | 490 KB

2016


pdfIcon December
Released on 9 May 2017 | 451 KB
pdfIcon November
Released on 9 May 2017 | 534 KB

pdfIcon October
Released on 11 January 2017 | 438 KB
pdfIcon September
Released on 11 January 2017 | 438 KB

pdfIcon August
Released on 25 November 2016 | 444 KB
pdfIcon July
Released on 9 November 2016 | 441 KB

pdfIcon June
Released on 5 September 2016 | 227 KB
pdfIcon May
Released on 28 July 2016 | 227 KB

pdfIcon April
Released on 15 July 2016 | 205 KB
pdfIcon March
Released on 3 June 2016 | 208 KB

pdfIcon February
Released on 2 June 2016 | 208 KB
pdfIcon January
Released on 4 May 2016 | 208 KB

2015


pdfIcon December
Released on 4 May 2016 | 213 KB
pdfIcon November
Released on 4 May 2016 | 211 KB

pdfIcon October
Released on 1 February 2016 | 471 KB
pdfIcon September
Released on 4 January 2016 | 413 KB

pdfIcon August
Released on 4 January 2016 | 429 KB
pdfIcon July
Released on 22 December 2015 | 440 KB

pdfIcon June
Released on 9 October 2015 | 255 KB
pdfIcon May
Released on 23 September 2015 | 296 KB

pdfIcon April
Released on 22 July 2015 | 224 KB
   

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