OFW remittances seen far from 2020 doomsday scenario

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) Gov. Benjamin Diokno said that, although overseas Filipinos would be sending home fewer dollars this year, the final figure would be far from the worst-case scenario planners were earlier bracing for.

“Year to date, remittances from Filipino workers contracted by 2.6 percent,” he 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 was 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 reported 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 $2.76 from $2.88 billion in the same period last year.

This brought the cumulative remittances for the first eight months of the year to $21.41 billion, a decrease of 2.6 percent from the $22 billion recorded in the comparable period in 2019.

Personal remittances from land-based workers with work contracts of a year or more declined by 4.6 percent to $2.12 billion in August 2020 from $2.22 billion a year ago.

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

Cash remittances coursed through banks declined by 4.1 percent to $2.48 billion last August from $2.59 billion in August 2019.

For the eight months to August, cash remittances amounted to $19.28 billion, 2.6-percent lower than the $19.81 billion registered in the comparative period last year.