Moody’s warns

fall would also hurt economic growth, given the importance of remittances to household incomes.

The report pointed out, however, that diversifying the vocations of overseas workers and their destination countries could help to mitigate this.

- ous oil price shocks had limited and short-lived effects on remittances to Asian countries, the current more pronounced and prolonged decline, because it is coupled with fiscal tightening in many oilexporting countries, is likely to hurt migrant worker earnings and consequently remittances.

“All the sovereigns in our analysis are net oil importers, meaning that a lower oil import bill should mitigate the impact of the decline - rent account,” it said.

The credit watchdog pointed out that 25 percent drop in oil prices since the start of 2015 is large, and it expects that future declines in remittances will be much lower than that in percentage terms.

“So, unless remittances decrease than we anticipate, their decline will dampen, but not completely offset, current account,” it noted.

Moody’s estimates that it would take a 10 percent to 30 percent fall in remittances to outweigh a 50 percent drop in net oil imports for most countries.

“Pakistan, Bangladesh, Sri Lanka and the Philippines have the highest proportion of remittances in their current account receipts. these sovereigns most,” it added

case of oil prices remaining lower for longer implies that the impact of weaker remittances will ultimately extend to more subdued consumption and economic growth.

Mitigation

Nevertheless, for the Philippines, India, and Vietnam, the diversified locations and vocations of their overseas workers could help reduce the overall decline in remittances, it said.

In the Philippines, it noted that between 2010 and 2013, growth in the number of Filipinos migrating

“But the proportion of remittance nearly equal, at 34 percent and 31.7 percent, respectively,” it said.

For the Philippine and Vietnam, remittances from the Gulf,

Another factor is the occupational

For both India and the Philippines, the relatively diverse occupations of their workers should provide a buffer against an oilrelated slowdown in remittances.

“Overseas Filipinos are engaged in a wide range of jobs, including domestic work, hospitality, medical services and engineering. Workers in such professions are much less likely to see an impact from the slowdown than those in the construction or oil and gas industries,” it said.

Lastly, Moody’s said several factors could also mitigate the impact on consumption, as domestic drivers of growth can help to pick up the slack that a fall in remittances could bring.

“In the Philippines, for instance, the business process outsourcing industry is a strong complement to remittances as a revenue generator,” it stressed. if the