OFW remittances will be badly hit by pandemic

In the assessment of the nation’s economic losses from the ongoing COVID-19 pandemic, a big part is expected to come from the greatly diminished remittances of our overseas Filipino workers (OFWs). For weeks now, they have been returning by the thousands from countries around the world.

All returning Filipinos are required to undergo 14-day quarantine before they are allowed to go home. The Overseas Workers Welfare Association (OWWA) is overseeing some 110 quarantine facilities in Metro Manila and nearby provinces for returning OFWs. This month, some 86,000 OFWs were reported to have received government assistance in the amount of $200 each, but there are over pending 230,000 applications for aid.

And many more OFWs are streaming back into the country as the industries in scores of countries around the globe are hit by the pandemic. Some 45,000 more are expected to return home by the end of June. An estimated 300,000 to 400,000 have suffered layoffs and pay cuts, according to one estimate.

There are today about 10 million OFWs. In 2019, their remittances to their families in the Philippines reached $33.9 billion, about 10 percent of the nation’s Gross Domestic Product (GDP). This year, because of the pandemic, these remittances are expected to decline by 7 percent.

A big part of the loss is expected to be in the sea-based remittances. We may recall that among the earliest COVID-19 cases were those on the cruise ships Diamond Princess which was detained off Yokohama in Japan, and Grand Princess off San Francisco in the United States. Filipinos made up a big portion of the crews and services in both ships.

Falling world oil prices deeply hurt the economy of Saudi Arabia and other nations in the Middle East and this happens to be the largest source of OFW remittances today. The other major source of OFW remittances is the United States and it is now the epicenter of the pandemic.

An off-setting factor, according to one assessment, is the fact that many OFWs are in essential services and industries – doctors, nurses, medical technologists, engineers, and information technology experts. Medical frontliners are now at the center of the worldwide effort to end the pandemic and many Filipinos are in these areas.

But the overall assessment on remittances by overseas Filipino workers is grim because of the pandemic. To this day, there is no indication when it will cease to wreak havoc on the economies of nations around the world. We will have to accept the huge losses of our OFW remittance sector as among the worst impacts of the COVID-19 pandemic on our economy.