Remittances slide in March, may slip further
MONEY sent home by overseas Filipino workers (OFWs) in March decreased from a year ago, the Bangko Sentral ng Pilipinas (BSP) said, adding that such inflows could drop by 5 percent this year.
Data released by the central bank on Thursday night showed that personal remittances — personal transfers, whether in cash or kind, and capital transfers between households — totaled $2.65 billion in the third month, up 1.10 percent from $2.62 billion in February, but down 5.2 percent from $2.79 billion a year earlier.
The latest figure brought the first-quarter tally to $8.21 billion, a 1.5-percent growth from $8.09 billion in January to March 2019.
Personal remittances from landbased workers with work contracts of one year or more fell by 6.7 percent to $2.014 billion in March from $2.157 billion a year ago, the BSP said.
“Meanwhile, remittances from sea-based workers and land-based workers with work contracts of less than one year rose by 2.7 percent to $0.591 billion from $0.575 billion a year ago,” it added.
Cash remittances, which only
count money coursed through banks, declined by 4.7 percent to $2.39 billion in March from $2.51 billion a year earlier, but expanded by 1.65 percent from $2.35 billion in February.
In the first three months, cash remittances grew by 1.4 percent to $7.40 billion from $7.29 billion a year earlier.
Remittances from the United States were the largest at 39 percent, followed by Singapore, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Qatar, Canada, Hong Kong and South Korea.
“The combined remittances from these countries accounted for 79.1 percent of total cash remittances,” the Bangko Sentral said.
Also on Thursday, BSP Governor Benjamin Diokno announced an adjustment in the central bank’s OFW remittances growth estimate for this year.
“Despite being resilient in past crises, OF remittances are seen to contract by 5 percent, a reversal [of] the 3-percent growth in the November 2019 projection,” he said.
Diokno explained the revision “is due mainly to large repatriation of workers and major economic disruptions in host countries.”
Next year, remittances are expected to bounce back by 4 percent, he added.
Commenting on the latest data,
Rizal Commercial Banking Corp. economist Michael Ricafort said this would already reflect the impact of travel restrictions on industries that employs Filipinos, which resulted in their repatriation.
“In view of the recent repatriation of some OFWs, as displaced by [the] Covid-19 (coronavirus disease 2019) pandemic, OFW remittances could still continue to decline by at least single-digit levels in the coming months of 2020, with the bigger declines could be seen at the height of the lockdowns from April [to] May 2020, especially since the stay-athome orders/lockdowns in many countries around the world started [during this period], including the biggest host countries for OFWs, such as the US/North America and some countries in [the] Middle East, Asia, and Europe,” he added.
The economist also said the decline in OFW remittances could further weigh on the local economy, which already contracted largely due to the lockdown the government has imposed since mid-March.
OFW remittances account for about 10 percent of the local economy and are a significant contributor to consumer spending, which accounts for at least 70 percent of the local economy, he added.