Remittances received by Acleda Bank and Western Union, two of Cambodia’s leading institutions for cross-border money transfers, increased significantly last year, consistent with the World Bank’s estimate for rapid remittance growth in 2015, new data shows.

Despite a decline in remittances from Malaysia and South Korea, the two financial institutions experienced a combined increase of $333.8 million in 2015, up 10 per cent over the previous year, according to So Phonnary, executive vice president of Acleda Bank.

She said that much of this growth could be attributed to a surge in money transfers by Cambodians working in Thailand.

The two financial institutions reported a combined $140.8 million in remittances from Thailand last year, up 47 per cent from the $95.5 million recorded in 2014.

Transfers from Malaysia and South Korea decreased 20 percent to $14.7 million, and 6 per cent to $178.4 million, respectively.

Phonnary said these declines did not necessarily reflect a drop in remittances, but rather how Cambodians were choosing to send their money home.

“We saw a drop from Malaysia and South Korea because our competitors are growing,” Phonnary said.

“There are more [financial] services provided by other companies in both countries, so our clients have other options to send money back home.

“However, we see the robust increase from Thailand because there are more people going to work in Thailand,” she continued.

“Apart from that, we have a lot of branches and services available along the borders, especially in Poipet, so it is easier for clients in both countries to use our service.”

The World Bank estimated in its Migration and Remittances Factbook 2016 that Cambodia would see its total remittances double to reach $731 million in 2015, up from $377 million in 2014.

Independent economist Teng Delux said that despite a robust flow of legal remittances, he suspects that illicit money has also been sent into the country using conventional money transfer services.

“This rapid growth of remittances does not seem to reflect the growth in the number of [migrant] workers,” Delux said.

“The fast growth should also be considered a risk and the relevant ministries need to be alerted.

The central bank needs to monitor whether the transfer is legal or not, while a rapid inflow of money can lead to inflation.”

As many as 300,000 Cambodians migrated overseas for work, according to a report prepared last month for the International Labour Organisation’s Bureau of Employers’ Activities.

Many of these migrant workers went to Thailand, South Korea and Malaysia, where they regularly send money home to support their families.

Delux said the flow of migrant workers could have a wider impact on Cambodia’s economy, which is better served by creating job opportunities at home rather than losing workers to overseas employers.

“Remittances can drop when the government is able to attract investors and create jobs at home so that workers come back to work in Cambodia,” he said.

“It is better to create jobs in the country rather than [rely on] remittances.”

Representatives of the Ministry of Labour and Wing Specialised Bank did not respond to interview requests.