Remittances down in January on pandemic job losses

The amount of dollars sent home by expatriate Filipinos declined slightly in the first month of 2021 as the coronavirus pandemic wore on—a marked departure from the trend of recent periods that saw strong remittance growth at the start of the year.

According to the Bangko Sentral ng Pilipinas, personal remittances from the country’s overseas citizens reached $2.9 billion in January 2021. This was 1.7-percent lower than the $2.94 billion in the same period last year.

The marginal decline in personal remittances during the month was attributed to the 2.4-percent drop in remittances from land-based workers with work contracts of a year or more to $2.22 billion from $2.27 billion in January 2020.

Remittances from sea-based workers and land-based workers with work contracts of less than a year increased by 1 percent to $609 million in January 2021 from $603 million a year ago.

Central bank records showed usually robust January remittance growth, having risen 9.8 percent in 2014, 3.3 percent in 2015, 3.6 percent in 2016, 8.6 percent in 2017, 9.7 percent in 2018, 4.4 percent in 2019 and 6.6 percent in 2020, just a few weeks before a global pandemic was declared.

More OFWs repatriated

Officially, the pandemic has caused more than 300,000 overseas Filipino workers (OFWs) to be repatriated by authorities last year, of which some 70 percent were land-based while the balance worked on ships. Unofficial estimates peg the number of Filipinos who have lost foreign jobs at as high as 500,000.

Meanwhile, overseas Filipinos’ cash remittances coursed through banks decreased by 1.7 percent to $2.6 billion in January 2021 from $2.65 billion in the comparable month a year ago.

In particular, cash remittances from land-based workers contracted by 2.4 percent to $2.04 billion while that of sea-based workers increased marginally by 1 percent to $558 million.

By country source, the United States registered the biggest share to total remittances at 40.9 percent, followed by Singapore, Saudi Arabia, Japan, United Kingdom, Canada, United Arab Emirates, Qatar, Malaysia and Taiwan. The combined remittances from these countries accounted for 78.2 percent of total cash remittances during the period.

Prolonged downtrend

According to the central bank, there were some limitations on the remittance data by source because a common practice of remittance centers in various cities abroad was to course these funds through correspondent banks, most of which are located in the United States.

At the same time, remittances coursed through money couriers could not be disaggregated by actual country source and lodged under the country where the main offices are located, which, in many cases, is in the United States.

Earlier, financial giant Morgan Stanley had expressed optimism that cash remittance flows to the Philippines this year would buck the projected prolonged downtrend and grow by as much as 7 percent to support a rebound in household spending. INQ