Lower OFW remittances far from 2020 doomsday scenario, says upbeat BSP

MANILA, Philippines — The central bank remains upbeat on the prospects of dollar remittances from the Philippines’ estimated 10 million expatriates, including 2.2 million contract workers, despite the pandemic-induced slowdown this year.

In a message to reporters, Bangko Sentral ng Pilipinas (BSP) Governor Ben Diokno said that, although overseas Filipinos will be sending home fewer dollars this year, the final figure will be far from the worst case scenario planners were earlier bracing for.

“Year to date, remittances from Filipino workers contracted by 2.6 percent,” Diokno said on Friday. “That’s good news. That’s lower than BSP’s revised forecast of negative 5 percent.”

Diokno noted that other analysts had predicted that dollar remittances from overseas Filipino workers would contract by as much as 20 percent – a pessimistic view that is now unlikely to play out, given the latest numbers.

“With four months to go before the end of the year, there is a strong likelihood that the 2020 overseas Filipino remittances would shrink by less than 5 percent,” the central bank chief said.

On Thursday, the central bank reporters that Filipinos sent home fewer dollars in August, ending a two month rebound, as overseas job losses due to the coronavirus pandemic mounted.

The regulator said personal remittances from overseas Filipinos in August 2020 declined year-on-year by 4.2 percent to $2.756 from $2.875 billion recorded in the same period last year.

This brought the cumulative remittances for the first eight months of the year to $21.414 billion, a slight decrease of 2.6 percent from the $21.995 billion recorded in the comparable period in 2019.

Personal remittances from land-based workers with work contracts of one year or more declined to $2.118 billion in August 2020, 4.6 percent lower than $2.221 billion recorded in August 2019.

Similarly, remittances from sea-based workers and land-based workers with work contracts of less than one year fell by 2.2 percent to $580 million in August 2020 from  $593 million a year ago.

Cash remittances coursed through banks declined by 4.1 percent to $2.483 billion in August 2020 from $2.589 billion in August 2019.

For the January to August period, cash remittances amounted to $19.285 billion, 2.6 percent lower than the $19.808 billion registered in the comparative period last year.

“This was due to the decline in remittances from both land-based and sea-based workers, which fell by 1.9 percent to $15.183 billion from $15.476 billion, and 5.3 percent to $4.101 billion from $4.332 billion,” the central bank said.

JPV