OFW ‘ALTRUISM’ AFFIRMS BSP OUTLOOK
There are positive signs but I think that it bears watching further developments
The trajectory of remittance flows from overseas Filipino workers (OFW) affirms the Bangko Sentral ng Pilipinas’ (BSP) latest projection, a central bank executive said.
BSP Deputy Governor Francisco Dakila Jr. said the positive growth in OFW remittances seen in the last two months validates their view that altruism remains as OFW primary aim in sending their remittances.
“Remittances will contract by about five percent for the whole year. There’s already two months where we’ve seen cash remittances recovering year-on-year,” Dakila said.
“It validates our earlier analysis that there is a large altruistic component to overseas Filipino remittance flows,” he added.
According to Dakila, OFW tend to send more cash to their families for basic sustenance and other immediate needs, especially during this time of crisis.
“The cumulative number now is at minus 2.4 percent, but it would be good if for the whole year we are going to see a contraction less than what we had projected,” he explained.
“But still, there are developments that we need to look at, including the continued large repatriation of workers. As of September, the Department of Foreign Affairs has reported a total of 174,039 OFW that it has repatriated, of which about 36 percent are sea-based and the rest are land-based workers,” he added.
Still, the BSP executive noted the Department of Labor and Employment’s estimate of an additional 200,000 should the pandemic continue to worsen until the year-end.
“There are positive signs but I think that it bears watching further developments,” he said.
Latest data from the BSP showed remittances in July growing by 7.8 percent, slightly higher than the 7.7 percent expansion in the previous month, reversing the year-on-year contraction witnessed during the second quarter period.