Dollar flow from expat Filipinos defies doomsayers, slip by only 0.3 percent in 2020

MANILA, Philippines—Contrary to the most pessimistic projections at the start of the pandemic, the country’s estimated 10 million expatriate Filipinos came through in 2020 to send home dollars in amounts that were just a fraction less than 2019 levels.

In a statement, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said that “despite the global slump caused by the pandemic”, personal remittances from the country’s foreign-based citizens fell slightly by 0.3 percent year-on-year to $3.205 billion in December 2020 from $3.216 billion in December 2019.

This is in sharp contrast to bearish forecasts made in 2020 by the likes of the World Bank, which had predicted a 13-percent decline in annual remittances because of the public health crisis. Local economists and market watchers had also forecast declines in the amount of dollars Filipino overseas workers would send home that would range between 7 to 10 percent.

According to the central bank, 2020’s “slight decrease” was attributed to the 0.7 percent decrease in remittances from land-based workers with work contracts of one year or more to $2.494 billion from $2.512 billion recorded in December 2019.

Remittances from sea-based workers and land-based workers with work contracts of less than one year rose slightly by 0.8 percent to $647 million in December 2020 from $642 million in December 2019.

The full-year 2020 personal remittances from overseas Filipino reached $33.194 billion, lower by 0.8 percent than the $33.467 billion recorded in 2019.

Nonetheless, personal remittances remained a major source of the country’s foreign exchange inflows, with the 2020 level representing 9.2 percent of gross domestic product and 8.5 percent of gross national income.

Similarly, overseas Filipinos’ cash remittances coursed through banks fell slightly by 0.4 percent to $2.89 billion in December 2020 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.

The full-year overseas Filipinos’ cash remittances amounted to $29.903 billion, lower by 0.8 percent than the $30.133 billion registered in 2019.

The actual annual decline in 2020 was, however, lower than the earlier forecast contraction of 2 percent for the year made by the central bank.

By country source, cash remittances from Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Germany, and Kuwait declined, while those from the United States, Singapore, Canada, Hong Kong, Qatar, South Korea and Taiwan increased.

The US posted the highest share of total remittances with 39.9 percent, followed by Singapore, Saudi Arabia, Japan, the UK, the UAE, Canada, Hong Kong, Qatar and South Korea.
Combined remittances from these countries accounted for 78.6 percent of the total cash remittances.

TSB