Cash re­mit­tances drop anew in Aug.

Business World - - Front Page - By Luz Wendy T. No­ble Re­porter

CASH RE­MIT­TANCES sent by Filipino work­ers abroad de­clined in Au­gust af­ter two straight months of re­cov­ery, as in­flows from the Mid­dle East and Ja­pan fell amid the coro­n­avirus pan­demic.

Money sent home by over­seas Filipino work­ers (OFWs) through banks stood at $2.483 bil­lion in Au­gust, 4.1% lower year on year, ac­cord­ing to data re­leased by the Bangko Sen­tral ng Pilip­inas (BSP) on Thurs­day.

“By coun­try source, the de­cline in re­mit­tances in Au­gust 2020 com­pared to the level in the same month last year was noted from Saudi Ara­bia, Ja­pan and the United Arab Emi­rates,” the BSP said.

How­ever, this was partly off­set by an “ob­served re­mit­tance growth” from the United States, Sin­ga­pore, and Malaysia.

For the first eight months of 2020, re­mit­tance in­flows dropped 2.6% to $19.285 bil­lion from the $19.808 bil­lion dur­ing the same pe­riod a year ago.

The BSP at­trib­uted the lower in­flows to the 1.9% de­cline in cash sent by land-based work­ers to $15.183 bil­lion, and the 5.3% drop in re­mit­tances by sea-based work­ers to $3.101 bil­lion.

The top source of re­mit­tances dur­ing the eight-month pe­riod is the United States, where 40.2% of the in­flows were sourced. It was fol­lowed by Sin­ga­pore, the United King­dom, Ja­pan, Saudi Ara­bia, United Arab Emi­rates, Canada, Hong Kong, Tai­wan, and Qatar. All to­gether, re­mit­tances from th­ese coun­tries ac­counted for 78.9% of the to­tal.

Mean­while, per­sonal re­mit­tances, which in­clude in­flows in kind, stood at $ 2.756 bil­lion in Au­gust, down by 4.2% from the $2.875 bil­lion logged a year ago.

Year to date, in­flows de­clined 4.2% to $21.414 bil­lion from the $ 21.995 bil­lion recorded in the first eight months of 2019.

Cash re­mit­tances have posted year- on-year growth in June and July, fu­el­ing hopes that the worst is over for re­mit­tances that sup­port the coun­try’s con­sump­tion- driven econ­omy. In May, re­mit­tances plunged 19.2%, re­flect­ing the im­pact of wide­spread lock­downs around the world.

“The loss of re­mit­tance sup­port to house­hold con­sump­tion will likely be felt well into 2021, weigh­ing on growth re­bound prospects,” ING Bank N.V. Manila Se­nior Econ­o­mist Ni­cholas An­to­nio T. Mapa said in a note to re­porters.

The Au­gust re­mit­tance fig­ures re­flect the im­pact of the con­tin­ued repa­tri­a­tion of OFWs amid the cri­sis, said Asian In­sti­tute of Man­age­ment Econ­o­mist John Paolo R. Rivera.

“Although the Philip­pines has also been de­ploy­ing OFWs abroad in the midst of the pan­demic, the re­turn­ing OFWs are still greater than de­ployed OFWs,” Mr. Rivera said in an e-mail.

More than 213,000 OFWs have been repa­tri­ated as of Oct. 11, ac­cord­ing to the Depart­ment of For­eign Af­fairs. The num­bers are ex­pected to reach 300,000 by December.

The In­ter­na­tional Mone­tary Fund had ear­lier warned that migrant work­ers may not be able to sus­tain giv­ing sup­port to fam­i­lies back home through their sav­ings if the re­ces­sion deep­ens in host coun­tries.

The lat­est data also showed OFWs com­mit­ting to sea­sonal ex­penses back home in the pre­vi­ous months, said UnionBank of the Philip­pines, Inc. Chief Econ­o­mist Ruben Carlo O. Asun­cion.

“It [ Au­gust in­flows] does con­firm that the June-July re­cov­ery combo may be be­cause of the house­hold re­quire­ments for school­ing, such as tu­ition fees, tech up­grade, etc.,” Mr. Asun­cion said in an e-mail.

Mr. Asun­cion said he ex­pects re­mit­tances in the next few months to re­main soft, with an “in­flows bo­nanza” by December due to the hol­i­days.

“The trend is be­com­ing un­usu­ally un­pre­dictable. Christ­mas is com­ing so we ex­pect a surge in re­mit­tances in the com­ing months, by virtue of al­tru­ism as mo­ti­va­tion for re­mit­tances,” Mr. Rivera said.

The BSP ex­pects cash re­mit­tances to fall by 2% this year amid the pan­demic cri­sis.

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.