FILIPINO migrant workers were able to pull through and send almost as much money back home during the pandemic as they did before the global health crisis, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The BSP announced on Monday that overseas Filipino workers’ (OFW) cash remittances to the Philippines hit $29.9 billion for the full year of 2020, only $230 million short of what they sent— $30.13 billion — when the global economy was not affected yet by the pandemic in 2019.
The 0.8-percent decline in remittances also exceeded the BSP’s expectations that remittances will decline by about 2 percent.
By source, cash remittances from Saudi Arabia, Japan, the United Kingdom (UK), the United Arab Emirates (UAE), Germany, and Kuwait declined, while those from the United States (US), Singapore, Canada, Hong Kong, Qatar, South Korea, and Taiwan increased.
The US posted the highest share of the total remittances at 39.9 percent, followed by Singapore, Saudi Arabia, Japan, the UK, the UAE, Canada, Hong Kong, Qatar, and South Korea. The combined remittances from these areas accounted for 78.6 percent of the total cash remittances during the year.
“Overseas Filipinos find a way again. Remittance flows bucked the general expectation for a substantial contraction in 2020 with Overseas Filipinos [OFs]
managing to send home much-needed funds despite the challenges faced on the economic and health front,” ING Bank economist Nicholas Mapa said.
“Initially, analysts had expected an alarming drop in remittances as the usual ‘hedge’ against a downturn was negated with the virus striking just about every country across the globe. Despite lockdowns, threats to health, the shutdown of the cruise line industry and repatriation due to widespread job losses abroad, remittances fell by only 0.8 percent, with OFs finding a way to send home much-needed funds to help support their loved ones,” he added.
In December, however, cash remittances coursed through the banks fell slightly by 0.4 percent to $2.89 billion from $2.902 billion in December 2019.
In particular, cash remittances from land-based workers fell by 0.7 percent to $2.297 billion, while that of sea-based workers increased by 0.8 percent to $593.2 million.
Future uncertain
Despite the Filipino migrant workers’ reputed “altruistic” and “heroic” nature in 2020, the performance of remittances and its contribution to the economy is still uncertain for this year as more and more OFWs are losing jobs and being repatriated due to the stale global economy.
According to Rizal Commercial Banking Corporation (RCBC) economist Michael RIcafort, remittances could still continue to contract year-on-year after the holiday season in 2020 until some of the repatriated, retrenched and laid-off OFWs restore or regain the jobs they have lost in the same host country or in another host country, or until constraints ease further on travel.
“Realities about increased number of OFWs repatriated back to the Philippines and reduced OFW remittances already started to set in, with more than 300,000 OFWs repatriated since February 2020 out of an estimated 500,000 adversely affected OFWs. This is amid risks of further lockdowns and travel restrictions in some OFW host countries brought about by the new coronavirus variants/strains that are more contagious,” Ricafort said.
What would be crucial, economists said, is the effectiveness of the vaccination rollout in host countries and its ability to restore the global economy for 2021.
“We expect remittance flows to remain flat—or only modest growt—in 2021 with the return of sea-based OFs helping offset the substantial number of OFs sent home over the course of 2020,” Mapa said.
“Meanwhile, with vaccination rollouts ongoing across the globe, job prospects may brighten for OFs in the coming months, which will be crucial in supporting sagging domestic incomes due to severe job losses and poor consumer confidence,” he added.
“An important positive offsetting factor is the increased development and deployment/rollout of vaccines for Covid-19 in many countries worldwide into 2021, especially in major host countries of OFWs, thereby [such] could help reduce new coronavirus cases and further improve economic recovery prospects that lead to more jobs/employment opportunities for OFWs than otherwise, resulting to improvement in OFW remittances data,” Ricafort said.
