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For Luz Wendy T. Noble, Reporter
REMITTANCES fell 0.8% in 2020, the to beFirst annual contraction in two decades as some Filipino Overseas Workers (OFW) lost their jobs while others tightened their belts amid the pandemic.
Cash remittances through banks stood at $ 29.903 billion last year, slightly lower than the record of $ 30.133 billion in 2019, according to data released by Bangko Sentral ng Pilipinas (BSP) on Monday.
Remittances experienced their first annual contraction since the -0.3% observed in 2001 and the worst since the -18.3% registered in 1999. However, the fall was better than the 2% contraction forecast by the central bank for all year.
For ING Bank NV Manila senior economist Nicholas Antonio T. Mapa, it is possible that remittances have declined more than the BSP data when they were adjusted for exchange rate movements.
“In terms of pesos, remittances have contracted by 4.8% despite the OFW struggling to find a way to send home more dollars to pay fixed expenses in pesos, such as tuition or mortgage payments,” said Mapa in a note.
In 2019, the peso surpassed the level of P50 per dollar and even reached P52 per dollar. By 2020, the peso appreciated to the level of P48 per dollar, meaning that OFWs needed to send more to support their families during the crisis.
The BSP said that inflows from economies like Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates (UAE), Germany and Kuwait declined last year.
On the other hand, the money sent home by OFWs in the United States, Singapore, Canada, Hong Kong, Qatar, South Korea and Taiwan increased.
This difference showed the “disparate effects” of fiscal support policies in host economies on the ability of OFWs to continue to support their families in the Philippines, said Security Bank Corp. chief economist Robert Dan J. Roces.
“For example, him to beThe injection of tax support into the US allowed foreign workers living there on a shipment basis to continue to ship which contributed to it as the largest source country. Compare this to other traditionally strong countries of origin, such as Saudi Arabia, which faltered when closures forced a work stoppage and sent workers home, ”Roces said in a text message.
BSP data showed that the United States had a share of 39.9% of total remittances in 2020. InFloridaFlows from the US, together with Saudi Arabia, Japan, the UK, the United Arab Emirates, Canada, Hong Kong, Qatar and South Korea accounted for 78.6% of the total.
In December alone, cash remittances fell 0.4% to $ 2.89 billion from $ 2.902 billion a year earlier. The entries, however, reached a 12-month high.
Money sent home by land-based OFWs fell 0.7% to $ 2.297 billion, while ship employees remitted $ 593.2 million, up 0.8%.
Personal remittances, which include inflows in kind, fell 0.8% year-on-year to $ 33,194 billion in 2020. In December alone, personal remittances fell 0.3% to $ 3,205 billion.
This year, the BSP projects that cash remittances will grow 4% due to the expected global economic recovery.
Mapa said that remittances will experience “moderate growth this year” as the peso strengthens and more workers are deployed at sea.
“With ongoing vaccine launches around the world, job prospects may improve for underage workers in the coming months, which will be crucial in supporting low national incomes due to severe job losses and low consumer confidence, ”he said.
Latest data from the Department of Foreign Affairs Affairs showed that more than 351,000 OFW have already been repatriated since the outbreak in February last year.
“That [number of OFWs retrenched] sends a strong signal that authorities mustffbe an alternative source of income toff“Emmanuel J. López, the dean of the Graduate School of the Colegio de San Juan de Letrán, said in an email.
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