August remittances down as Ofwjob losses mount

Expatriate Filipinos sent home fewer dollars in August, ending a two-month rebound, as overseas job losses due to the coronavirus pandemic mounted, according to the latest data from the Bangko Sentral ng Pilipinas.

In a statement, the central bank said personal remittances from overseas Filipinos in August 2020 declined yearon-year by 4.2 percent to $2.76 from $2.88 billion recorded in the same period last year.

This brought the cumulative remittances for the first eight months of the year to $21.41 billion, a slight decrease of 2.6 percent from the $22 billion recorded in the comparable period in 2019.

ING Manila senior economist Nicholas Mapa said the rebound in June and July was due to overseas Filipinos sending home much-needed funds immediately after the lockdowns in their jurisdictions, helping bolster remittances back into expansion for those months. But this phenomenon has since corrected itself.

“By August, pent up flows finally faded with Filipinos facing challenging labor markets abroad while the stock of overseas Filipinos declined significantly, resulting in the contraction,” he said.

Personal remittances from land-based workers with work contracts of a year or more declined to $2.12 billion in August 2020, 4.6-percent lower than $2.22 billion recorded in August 2019.

Similarly, remittances from sea-based workers and landbased workers with work contracts of less than a year fell by 2.2 percent to $580 million in August 2020 from $593 million a year ago.

Cash remittances coursed through banks declined by 4.1 percent to $2.48 billion in August 2020 from $2.59 billion in August 2019.

For the January-to-august period, cash remittances amounted to $19.28 billion, 2.6-percent lower than the $19.81 billion registered in the comparative period last year.

“This was due to the decline in remittances from both landbased and sea-based workers, which fell by 1.9 percent to $15.18 billion from $15.48 billion, and 5.3 percent to $4.1 billion from $4.33 billion,” the central bank said.

Bycountry source, the decline in remittances in August was noted from Saudi Arabia, Japan and the United Arab Emirates. These were partly offset by remittance growth from the United States, Singapore and Malaysia.

ING’S Mapa said he expected remittance flows to end the year down by 5-10 percent with workers abroad still facing challenging labor markets. Meanwhile, the number of deployed Filipino workers overseas is expected to fall by roughly 300,000 after the wide-scale repatriations.

“The loss of remittance support to household consumption will likely be felt well into 2021, weighing on growth rebound prospects,” he warned.