Remittances drop at steepest pace in 15 years
Remittances from overseas Filipino workers plunged by nearly 10 percent in March, the sharpest decline in almost 15 years due to the repatriation of Filipino workers and the fewer banking days in March due to the Holy Week, according to the Bangko Sentral ng Pilipinas (BSP).
BSP officer-in-charge Diwa Guinigundo said personal remittances declined by 9.9 percent to $2.63 billion in March from $2.91 billion in the same month last year.
For the first quarter, Guinigundo said personal remittances inched up by 1.3 percent to $7.81 billion from $7.71 bilion in the same quarter last year.
He said the bulk, or 77.5 percent, of personal remittances came from land-based workers with $6.1 billion, while the remaining 20 percent came from sea-based and land-based workers with $1.6 billion.
Personal remittances represent the sum of net compensation of employees, personal transfers, and capital transfers between households. It measures cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders.
On the other hand, cash remittances coursed through banks dropped by 9.8 percent to $2.36 billion in March from $2.61 billion in the same month last year.
Guinigundo attributed the decline to the 9.7 percent drop in cash remittances from land-based workers and the 10.2 percent decrease in transfers from seabased workers.
This was the biggest decline since April 2003 when remittances booked a double digit decline of 10.9 percent.
Guinigundo said the continued repatriation of Filipino workers from the Middle East may have affected the inflows of cash remittances.
Preliminary data from the Department of Labor and Employment indicated that a total of 1,124 OF workers were repatriated from Kuwait as of Feb. 8.
In February, the DOLE issued a total deployment ban as ordered by President Duterte due to a series of reports involving abuse and death of Filipino workers in Kuwait.
Things turned for the worst after Kuwait declared Philippine Ambassador Renato Villa “persona non grata” for leading the rescue of distressed Filipino workers from private Kuwait homes without proper coordination with local authorities.
Guinigundo said the countries that registered the biggest declines in cash remittances in March were Saudi Arabia, United Arab Emirates, Qatar, and the US.
“The negative growth during the month was primarily due to base effect following the sharp increase in remittances in March 2017 at 10.7 percent,” he said.
Further contributing to the decline, Guinigundo said was the lesser number of banking days in March due to the Holy Week.
Cash remittances coming from the US, UAE, Japan, Singapore, United Kingdom, Canada, Qatar, Germany and Hong Kong comprised 80.1 percent of total cash remittances in the first quarter.
Cash remittances grew by a paltry 0.8 percent to $7.01 billion in the first quarter from $6.95 billion in the same quarter last year.
Data showed cash remittances sent by land-based workers and sea-based workers aggregated $5.6 billion and $1.4 billion, respectively, with growth of 0.4 percent and 2.3 percent.
Personal and cash remittances reached record levels and exceeded the growth target set by the BSP last year, providing support to the country’s economy as a major driver of domestic demand.