Transfers in Q1 up 1.5%
Remittances from sea-based and land-based workers with work contracts of less than one year grew by 2.7 percent from only $0.57 billion to $0.59 billion in the same comparable period
Despite a downswing in March, remittances for the first quarter was slightly better compared to figures in the same period a year ago, latest data from the Bangko Sentral ng Pilipinas (BSP) showed.
“Personal remittances from overseas Filipinos (OF) amounted to $2.65 billion in March 2020, lower by 5.2 percent than the $2.79 billion recorded in March 2019,” the BSP said.
“This brought the total remittances for the first quarter to $8.21 billion, 1.5 percent higher compared to the $8.09 billion posted in the same period last year,” it added.
According to the central bank, this development could be the result of a decline in remittances from land-based workers with work contracts of one year or more, amounting to just $2.01 billion in March 2020 from $2.15 billion a year ago.
Deployment drops
Still, remittances from sea-based and land-based workers with work contracts of less than one year grew by 2.7 percent from only $0.57 billion to $0.59 billion in the same comparable period.
Cash transfers coursed through banks contracted by 4.7 percent from $2.51 billion in March 2019 to just $2.39 billion in March 2020 owing to the drop in the number of deployed Filipinos abroad.
“The countries that registered the declines in cash remittances in March were mostly from oil producing countries (Saudi Arabia, United Arab Emirates and Kuwait) where demand for workers was affected by depressed oil prices in the world market,” the central bank explained.
“Notwithstanding the decline in March, cash remittances for the first quarter 2020 managed to post a modest increase of 1.4 percent to $7.4 billion from the $7.29 billion registered in the same period last year,” it added.
By country of origin, the US took the bulk or 39 percent of the total remittances for the month followed by Singapore, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Qatar, Canada, Hong Kong and Korea.
Weaker remittances likely
BSP Governor Benjamin Diokno earlier bared a revision in remittances outlook for the year, reversing a previous three percent growth outlook to a disappointing five percent contraction.
“This is due mainly to large repatriation of workers and major economic disruptions in host countries.
The OF remittances is expected to bounce back by 4 percent in 2021, however,” Diokno said.
Diokno noted expectation of lower remittances from overseas Filipinos (OF) given the massive repatriation of such from their host countries. “Despite being resilient in past crises, OF remittances is seen to contract by 5 percent, a reversal from the 3 percent growth in the November 2019 projection. This is due mainly to large repatriation of workers and major economic disruptions in host countries,” Diokno explained.
“The OF remittances is expected to bounce back by 4 percent in 2021, however,” he added. Outlook for foreign direct investments figures were reduced by more than half from $8.8 billion to just $4.1 billion for 2020 before surging to $6.5 billion by 2021.