Philippines: Remittances slow as coronavirus pain looms

• May 15, 2020

MANILA, Philippines — A month before migrant workers began coming home in droves, money sent to their families showed some signs of slowdown in February as the country’s top dollar-earning sector begins to feel the bite of the pandemic.

Cash remittances coursed through banks stood at $2.36 billion in February, up 2.5% year-on-year from same period a year ago, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

While still growing, the latest expansion for remittances was slower than the 6.6% growth chalked up in January. For the first two months, cash remittances went up 4.6% annually to $5 billion.

Although appearing strong for the current reporting period, BSP Governor Benjamin Diokno indicated the central bank had already considered the worst is yet to come for remittances especially with “the emergence of the global health crisis” starting last March.

As of May 2, 24,422 overseas Filipino workers had been repatriated by the government, and the number is expected to swell to as much as 71,700 by June, putting at risk the robustness of remittances that serve as crucial dollar source for the Philippines used to pay for its external obligations like imports. 

As of 2018, government data showed there were 2.8 million Filipino workers abroad.

The pandemic is proving to be a formidable challenge for the resiliency of these inflows as workers get displaced by cities locked down to prevent the virus from spreading. But BSP is optimistic, revising a March forecast of as much as 0.8% contraction, which if realized would have been the worst performance in two decades, to a “conservative” 2% growth.

For the entire 2019, cash remittances grew 4.1% to a record-high of $30.13 billion.

“As you know, the government has now allowed Filipino overseas workers to leave the country, except health workers who are most needed at home,” Diokno said in a Viber message to reporters. 

On Friday’s report, BSP said the US continues to be main source of remittances for the first two months, accounting for 39% of the total amount. This is partly because, as BSP noted, most remittances are coursed through US-based banks even by migrant workers based elsewhere.

Following the US as top remittance source was Singapore, Japan, Saudi Arabia, United Kingdom, United Arab Emirates, Qatar, Canada, Hong Kong, and South Korea. Combined inflows from these countries were equivalent to 79.4% of the total, BSP said.

“Of course, BSP will continue to closely monitor the level of remittances send by Filipino overseas workers in addition other inflows of foreign currencies. And we will continue to release monthly data on such foreign trade and incomes numbers,” Diokno said.

Source: https://www.philstar.com/business/2020/05/15/2014212/remittances-slow-coronavirus-pain-looms