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MANILA, Philippines – Expatriate Filipinos sent home fewer dollars in August, ending a two-month rally as job losses abroad due to the COVID-19 pandemic increased, according to new data from the Bangko Sentral ng. Pilipinas (BSP).
In a statement, the central bank said that personal remittances from Filipinos abroad in August 2020 declined year-on-year by 4.2 percent to $ 2,756 from $ 2,875 billion in the same period in 2019.
This brought cumulative remittances during the first eight months of 2020 to $ 21.414 billion, a slight decrease of 2.6 percent from the $ 21.995 billion recorded in the comparable period in 2019.
Nicholas Mapa, a senior economist at ING Manila, said the spike in remittances in June and July was due to overseas Filipinos sending much-needed funds home immediately following blockages on their overseas publications, which which helped drive remittances back to expansion in those months. This phenomenon, however, has corrected itself.
“In August, the pent-up flows finally faded and Filipinos faced challenging overseas labor markets, while overseas Filipinos’ shares declined significantly, causing the contraction,” he said.
Personal remittances from land workers with employment contracts of one year or more decreased to $ 2.118 billion in August 2020, 4.6 percent less than the $ 2.221 billion recorded in August 2019.
Similarly, remittances from maritime and land workers with employment contracts of less than a year fell 2.2 percent to $ 580 million in August 2020 from $ 593 million in 2019.
Cash remittances sent via banks decreased 4.1 percent to $ 2.483 billion in August 2020 from $ 2.589 billion in August 2019.
From January to August, cash remittances amounted to $ 19,285 million, 2.6 percent less than the $ 19,808 million registered in the comparative period of 2019.
“This was due to the decline in remittances from land and maritime workers, which fell 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.
By country source, the decline in remittances in August was observed from Saudi Arabia, Japan and the United Arab Emirates. These were partially offset by the growth in remittances from the United States, Singapore and Malaysia.
ING’s Mapa said it expects remittance flows by the end of the year to shrink by 5 to 10 percent, and workers abroad still face challenging labor markets where they are.
Meanwhile, the number of Filipino workers deployed abroad is expected to decline by approximately 300,000 after large-scale repatriations.
“The loss of support for remittances for household consumption will probably feel good in 2021, affecting prospects for growth recovery,” Mapa warned.
TSB
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