Thread: Remittances to Mexico are rebounding - More than $23 billion in 2011

Remittances to Mexico are rebounding

By Ricardo Lopez, Los Angeles Times January 11, 2012, 5:40 p.m.

Mexican immigrants living in the U.S. sent an estimated 8% more money back to relatives last year compared with 2010, thanks to an improving U.S. job market.

Money transfer services have seen the end a three-year slump, as remittances to Mexico are expected to have topped $23 billion last year, an 8% increase from 2010. (Luis Sinco, Los Angeles Times / January 9, 2012)

Head to 4th Street and Broadway in downtown Los Angeles and you'll see signs of a labor market on the mend.

At a Continental Currency Services Inc. branch, a check-cashing and money-transfer business, housekeeper Maria Guadalupe Gutierrez waited patiently in line on a recent afternoon to wire $200 to her mother in Chiapas, Mexico.

Gutierrez used to send more before the economy tanked and clients stopped having their houses cleaned as frequently. But things have picked up lately, and she is getting more calls.

"I hope it keeps getting better," said Gutierrez, 38, before rushing off to finish errands downtown.

Ending a three-year slump, remittances to Mexico are finally on the upswing, thanks to an improving U.S. job market. Analysts expect that money sent home last year by Mexicans living abroad, most of them residing in the United States, will top $23 billion when Mexico's central bank releases annual figures this month. Although still below the peak of $26 billion in 2007, that would be a solid 8% increase over 2010.

Money transfer giant Western Union Co., whose revenue sagged during the recession, saw its remittance business strengthen in 2011. The Colorado company reported a 5% increase in revenue from its Mexico business in the third quarter compared with the same period in 2010. Its stock price is up more than 13% over the last three months.

The figures underscore falling unemployment rates in California and nationwide, where sectors such as construction, manufacturing, restaurants and hotels that employ large numbers of Latino immigrants are creating jobs.

"People are working more," said Jesus Hernandez, manager of the downtown Continental Currency branch, as he and another teller hustled through a line of 12 people. Money "wires are coming back up."

The uptick is also good news for Mexico. Remittances are the nation's second-largest source of foreign exchange, behind petroleum sales. And they're a lifeline for millions of low-income Mexicans who use the funds for basics such as food, education and housing.

Remittances are also crucial for infrastructure projects in hardscrabble rural areas of Mexico. Most state governments there have a "Three for One" program in which emigres' contributions are matched by local, state and federal governments to pay for schools, clinics and other public works projects. When remittances plunged, many projects were suspended or delayed.

"The rise in remittances will mean the Mexican economy will grow compared to the year before," said Alfredo Coutiño, Latin America director for Moody's Analytics. "Remittances are very important for the Mexican economy."

Conversely, he said, if the U.S. recovery slows, it could derail Mexico's progress.

Remittances to Mexico soared in the early 2000s as immigrants found abundant work swinging hammers and hanging drywall during the U.S. housing boom. At the peak, 1 in 5 Latino immigrants in the U.S. was employed in the building trades, according to some estimates.

But the housing bust and recession sent remittances tumbling after millions of jobs vanished. A crackdown on illegal immigrants has also take a toll. Tough new state laws aimed at undocumented residents in Alabama, Arizona and other states have forced some migrants to abandon their jobs. Others have changed their financial habits, holding on to cash in the event they're forced to relocate, experts said.

More stringent border enforcement, workplace raids and deportations by federal authorities have also affected remittances. Nearly 800,000 illegal immigrants were deported in the last two fiscal years, many of them from Mexico, according to data from U.S. Immigration and Customs Enforcement. Migration from Mexico to the U.S. is at a virtual standstill partly because of these tough measures and continued high unemployment in the U.S., Mexican census figures suggest.

Money transfer services felt the pinch. Western Union, for example, with its ubiquitous yellow-and-black logo, saw remittances to Mexico sag during the U.S. recession, which stretched from December 2007 to June 2009. The largest decline came in 2009, when the company's Mexico revenue slipped 15% from the previous year, to $306 million.

Still, an estimated 11 million Mexican immigrants, both legal and undocumented, reside in the U.S. For many, ties to their families in Mexico remain strong. Studies have shown foreign-born workers are more likely to accept lower wages and to relocate to find work during tough times than native-born workers. That resourcefulness is helping fuel the recent boost in remittances, experts said, even though U.S. unemployment remains relatively high.

"The migrant population [is] resilient, even with the slowdown in sectors," said Natasha Bajuk of the Inter-American Development Bank. "If they lost their job in construction, they'll find one in services.... One of the main motivations of having migrated is to provide for families back home. They're, by definition, a population that is willing to take risks."

A weakened Mexican currency is helping as well. Before the recession, a U.S. dollar bought about 11 pesos. Currently, a dollar buys 13.6 pesos, meaning dollars earned in the U.S. are stretching further south of the border.

"Immigrants have more of an incentive to send money to families even if they are having savings or unemployment problems," said Rodolfo Garcia Zamora, an economics professor at the Autonomous University of Zacatecas, Mexico.

Pedro Morales, a 21-year-old laborer who works in construction, said that times have been tough in recent years. He and his middle-age father, who share a room in Eagle Rock, have struggled to find work. But they've stayed put because they're supporting Morales' three sisters and mother in Mexico.

Morales said he used to send them as much as $700 every couple of weeks. Now he's lucky if he can scrape together half that to help buy food and pay for his sisters' school uniforms. Still, he said every dollar counts.

"You do what you can," Morales said in Spanish. "But you make more money here" than in Mexico.

Source: Remittances to Mexico are rebounding - latimes.com

I just sent this to my "Representatives" and asked for an explanation.

Thanks Steve for the contact list.
http://www.alipac.us/f9/congressiona...atives-248063/

That's $23 billion taken out of the U.S. economy.

US signs historic deal with El Salvador and Honduras for remittance securitization

From: USC, Universtiy of Southern California, El Coligio de la Frontero Norte

• ABOUTThe Mexican Migration Monitor is produced through collaboration between USC’s Tomás Rivera Policy Institute and El Colegio de la Frontera Norte. The Monitor presents timely information on migration flows between the U.S. and Mexico.

Remittances: Steady Growth

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SUMMARY

After two years of steady growth, the flow of remittances to Mexico has recouped much of the ground it lost during the Great Recession, according to data collected by the Banco de Mexico, the central bank of Mexico.
In the second quarter of 2012, family remittances sent to Mexico totaled $6.5 billion, which is still below the peak of $6.9 billion registered during the same period in 2006. But the amount of money sent to relatives in Mexico by immigrants, primarily in the United States, had substantially recovered from the second-quarter low point of $5.6 billion in 2009 (Figure 1).
The pace of improvement in the remittance figures was somewhat slower in the first two quarters of 2012 than in the last two quarters of 2011, suggesting that a sluggish performance of the U.S. labor market coupled with a relatively strong Mexican economy (see accompanying article: Employment) had slightly dampened this trans-border flow of money. In both July and August 2012 remittance receipts were smaller than in the same months the previous year. The drop was only 2.1 percent in July, but the 11.6 percent decline in August was the largest since the remittance flow began its post-recession recovery in early 2010.
THE DATA

The Banco de Mexico keeps detailed accounts of money sent to an individual in Mexico from a person outside of the country. Categorized as “family remittances,” almost all of these funds—$22.8 billion in 2011—originate with Mexican migrants living in the United States and are sent to relatives. In 2003, the central bank began requiring all financial institutions that processed currency exchanges and international transfers to provide transactional data on a monthly basis. The imposition of formal reporting requirements has aided the monitoring of remittance flows and provided more accurate estimates of monetary transactions across national borders. In addition to total dollar amounts, the bank tracks the number and average size of transactions.
The flow of remittances consistently follows seasonal patterns, with greater sums sent in the second and third quarters (April to June and July to September, respectively) quarters than in the first (January to March) or the fourth (October to December). These patterns generally reflect greater employment in the spring and summer. As such, annual changes in the flows are effectively measured by comparing a given quarter to the same quarter in the previous year.
FINDINGS

According to several measures, the remittance flow to Mexico has recovered much of the ground it lost in 2008 and 2009 during the severest part of the U.S. economic downturn, but it has yet to reach the pre-recession record. The data suggest that economic conditions for Mexican migrants in the United States have stabilized overall and perhaps have been improving for many migrants over the past two years.
The Great Recession, which lasted officially from December 2007 to June 2009, and its aftermath coincided with nine consecutive quarters (Q1-2008 through Q1-2010) in which remittance receipts declined compared with the same quarter in the previous year. Since a turnaround in mid-2010, the flow has registered nine consecutive quarters of growth (Q2-2010 to Q2-2012).
From a high of $6.97 billion in the third quarter of 2007, the dollar amount of remittances received in Mexico dropped by nearly a third to a low of $4.78 billion in the fourth quarter of 2009. With a slow but steady recovery since early 2010, the flow has climbed back over the $6 billion mark in three quarters, hitting $6.47 billion in the second quarter of 2012.



ANALYSIS

During the U.S. economic boom of the mid-2000s, remittance flows increased at a rapid pace, nearly doubling between 2003 and 2007. Growth in the size of the Mexican migrant population in the United States explains only part of that increase. In addition, sending remittances became easier, cheaper, and quicker during that period as digital transfer services became widely available in immigrant communities.
As Figure 2 shows, remittance activity started to cool as soon as home construction, a major source of employment for Mexican migrants, began to drop off in mid-2006. While still registering quarter-over-quarter increases, the pace of growth slowed and then went solidly negative with the onset of the Great Recession at the start of 2008. The effects of the downturn continued to be evident in the remittance flow until the spring of 2010, but then a clear and sustained recovery got underway and has continued through the end of the second quarter of 2012. Data from the first two months of the third quarter of 2012 suggest that the remittance flow may be leveling off or even weakening. This potentially reflects slowing demand in the U.S. labor market.
Throughout this period, the amount of money sent in individual transactions has followed the same pattern as the overall flow. The dollar value of the average remittance dropped sharply during the recession and then recovered but has not matched the levels recorded just prior to the downturn (Table 2).


http://www.migrationmonitor.com/remittances/

Remittances to Mexico fall over 9 pct in 2nd qtr.

Published August 01, 2013

Remittances sent by Mexicans living abroad fell 9.1 percent to $5.88 billion in the second quarter, compared to the same period in 2012, the Bank of Mexico said Thursday.

Remittances totaled $6.47 billion in the April-June 2012 period, with the average remittance being $332, the central bank said in its quarterly report.
A total of 19.8 million transactions, the majority of them electronic funds transfers, were registered in the second quarter of this year, with the average being $296.35, the Bank of Mexico said.

Remittances totaled $1.94 billion in June, down 7.2 percent from the same month in 2012.

June marked the 12th consecutive month, compared to the prior year, that remittances have fallen, the central bank said.

A total of 6.4 million transactions were registered in June, with the average remittance coming in at $303.50, down from the $332.60 average in June 2012, the Bank of Mexico said.

Remittances totaled $22.44 billion in 2012, down 1.57 percent from 2011.
Remittances sent by Mexicans living abroad are the country's second-largest source of foreign exchange and help cover the living expenses of millions of people. EFE

http://latino.foxnews.com/latino/new...ct-in-2nd-qtr/

With all the fraudulent child tax credit refunds, coupled with anchor baby enabled taxpayer benefits, the illegals have lots extra to send out of the country, it seems.