Cash remittances fall 2.6% at the end of August

Cash remittances sent by Filipinos abroad through the banking system fell to $ 19.285 million at the end of August, down 2.6 percent from the same period last year of $ 19.808 million, it reported Thursday. the Bangko Sentral ng Pilipinas (BSP).

During the month of August alone, remittances channeled by banks fell by 4.1 percent to $ 2.483 billion from $ 2.589 billion at the same time in 2019.

The BSP attributed the lower remittances to the decrease in transfers of funds from both land and sea workers. Remittances from land fell 1.9 percent to $ 15.183 billion at the end of August from $ 15.476 billion. Remittances sent home by workers at sea decreased by 5.3 percent to $ 4.101 billion from $ 4.332 billion.

Personal remittances, previously called remittances through the “padala” system, amounted to $ 21,414 million, also 2.6 percent less than in the same period last year of $ 21,995 million. For the month of August alone, personal remittances decreased 4.2 percent to $ 2,756 from $ 2,875 billion.

According to the BSP, personal remittances from land workers with one-year employment contracts decreased 4.6 percent over the eight-month period to $ 2.118 billion from $ 2.221 billion. Both land and maritime workers with employment contracts of less than a year sent home $ 580 million, 2.2 percent less than last year’s $ 593 million.

The BSP said declines in August were seen in countries such as Saudi Arabia, Japan and the United Arab Emirates. “These were partially offset by the observed growth in remittances from the US, Singapore and Malaysia,” he added.

The BSP also said that in terms of cumulative share, the US recorded the highest share of cash remittances at 40.2 percent, yet the US will naturally emerge as a large source of remittances because the centers Remittances in various cities abroad transact with correspondent banks based in the US.

Other countries such as Singapore, the United Kingdom, Japan, Saudi Arabia, the United Arab Emirates, Canada, Hong Kong, Taiwan and Qatar, all together, accounted for 78.9 percent of total cash remittances.

The BSP announced on October 8 and this week revised its remittance outlook for 2020, that instead of declining by five percent, they now forecast a two percent drop in cash remittances after they recovered in June and July. By 2021, the BSP expects remittances to return to an annual growth rate of four percent.

ING Bank economist Nicholas Mapa said the return to lower remittances went against market expectations after two months of positive numbers, and believes that remittances will contract worse than two percent, but will actually decline. between five and 10 percent by 2020.

“In the coming months, we expect remittance flows to experience directional trade, but by the end of the year it was down by 5-10 percent, and overseas Filipinos still face challenging labor markets in their jurisdictions (cases of COVID-19 are increasing in Europe and the United States), while the population of Filipinos abroad is reduced by approximately 300,000 after large-scale repatriations, ”said Mapa. “The loss of support for remittances for household consumption is likely to feel good in 2021, weighing on prospects for growth recovery.”

The Bank of the Philippine Islands (BIS), meanwhile, said that during the lockdown months, particularly in its tightest period from March to May, it was difficult for Filipinos abroad to send cash home due to limited operations.

“During the previous ECQ (Enhanced Community Quarantine) period there were also lockdowns in several countries. Remittances have been affected since our moorings with brick and mortar branches were closed. Therefore, sending money to the Philippines became a challenge for our overseas Filipino clients, ”said Reggie Cariaso, head of strategy, products and corporate banking support at BPI.

Cariaso said that BPI has strengthened its remittance links for the “convenience and security of digital banking services” and this also included waiving fees for online and mobile banking to “make it easier for our customers to send money to the Philippines.” .

BPI has nine remittance partners who waived the fees and also offered discounts and preferential rates for foreign currency exchange “whenever possible,” Cariaso said. For Filipinos abroad, BPI also offers BPI PamanaPadala and BPI PadalaMoneyger.