Remittances likely recover in April — ING
Dutch financial giant ING Bank sees remittances recovering after booking its steepest decline in 15 years last March amid the continued repatriation of Filipino workers from the Middle East as well as fewer banking days due to the Holy Week.
Joey Cuyegkeng, senior economist at ING Bank Manila, said remittances likely recovered in April after recording near double-digit declines for both personal and cash remittances in March.
“We expect remittances to exhibit some resilience in April,” Cuyegkeng said.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed personal remittances fell 9.9 percent to $2.63 billion in March.
For the first quarter, personal remittances inched up 1.3 percent to $7.81 billion.
On the other hand, cash remittances coursed through banks dropped 9.8 percent to $2.36 billion. This was the biggest decline since April 2003 when remittances booked a double-digit decline of 10.9 percent.
Cash remittances inched up 0.8 percent to $7.01 billion from January to March.
The sharp drop was attributed to the continued repatriation of Filipino workers from Middle East countries. Preliminary data from the Department of Labor and Employment indicated that a total of 1,124 overseas Filipino workers were repatriated from Kuwait as of Feb. 8.
In February, the Department of Labor and Employment 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.
Further contributing to the decline was the fewer number of banking days in March due to the Holy Week.
He added the peso was relatively weak in March and traded weak at 52.39 to $1 and closed at 52.16 to $1.
“We had expected that remittances would more than cover the March trade deficit by $100 million. Instead remittances in March were $248 million short to cover the trade gap,” he said.
Cuyegkeng said the recent bout of peso weakness is a combination of this shortfall, low emerging market risk appetite, the dovish take of the BSP’s policy rate hike, and higher oil prices.