By Lee C. Chipongian
The central bank said cash remittances will contract by five percent this year but will recover in 2021 as the world gradually resolves the virus pandemic.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said for 2020, because of the health crisis which forced thousands of Overseas Filipinos to come home to the Philippines, they see remittances contracting by five percent.
For next year however, Diokno said the BSP expects remittances to “bounce back by four percent.”
The negative remittances growth for this year is mainly on account of the pandemic and the result of its containment and lockdown measures all over the world since March. Diokno said the “large repatriation of workers and major economic disruptions in host countries” were the main culprit for the decline in remittances.
“Despite being resilient in past crises, Overseas Filipinos remittances is seen to contract by five percent (for 2020), a reversal from the three percent growth in the November 2019 projection,” he said.
Last year, cash remittances totaled $30.1 billion, based on BSP data. For 2020, Diokno said they expect remittances to reach only $28.6 billion after a projected five percent contraction.
By 2021, the BSP estimates a four percent growth to $29.8 billion.
Overseas Filipinos sent home $7.403 billion worth of cash remittances – or transfers through the banking channels – in the first three months of 2020, up by 1.4 percent year-on-year or from $7.299 billion.
The BSP said in a report that the slight growth for the quarter was supported by remittances from land-based workers which sent home $5.79 billion, and sea-based workers with $1.613 billion. Land-based workers’ transfers were up by 1.3 percent and sea-based increased by 1.8 percent.
For the month of March, remittances via the banks dropped by 4.7 percent to $2.397 billion from $2.514 billion in 2019.
“The decline in cash remittances in March was largely due to the lesser number of Filipinos deployed overseas in the first three months of 2020 relative to the comparable level last year,” said the BSP. It was the oil producing countries such as Saudi Arabia, United Arab Emirates and Kuwait that had lower remittances since demand for workers were “affected by depressed oil price in the world market.”
For the first quarter, as far as personal remittances are concerned, these went up to $8.218 billion year-on-year from $8.098 billion, or up 1.5 percent.
The BSP said personal remittances from land-based workers with work contracts of one year or more were down 6.7 percent to $2.014 billion in March from $2.157 billion same time last year.
Remittances from sea-based workers and land-based workers with work contracts of less than one year, in the meantime, increased by 2.7 percent to $591 million from $575 million last year.
For the month of March only, personal remittances declined by 5.2 percent to $2.652 billion from $2.796 billion in 2019.