February 26, 2021 – The Bangko Sentral ng Pilipinas (BSP) revealed that personal remittances from overseas Filipinos slid only by 0.3% year-on-year to $3.205 billion in December 2020 compared to December 2019’s $3.216 billion.
BSP also said cash remittances coursed through banks only fell by 0.4%, from $2.902 billion in December 2019 to $2.89 billion in December 2020. The central bank remarked that personal remittances remained a major source of the Philippines’ foreign exchange inflow. Personal Remittance is defined by the BSP as the total of net compensation of employees, personal and capital transfers.
That the money inflow from overseas Filipinos only slid by 0.3% have defied all known projections, like the World Bank’s bearish estimate that there would be a 13% decline in local remittances because of the pandemic.
“By country source, cash remittances from Saudi Arabia, Japan, the United Kingdom (UK), the United Arab Emirates (UAE), Germany, and Kuwait declined, while those from the United States (US), Singapore, Canada, Hong Kong, Qatar, South Korea, and Taiwan increased,” the BSP said in a statement.
Accounting for 78.6% of the remittances are the countries: U.S., Singapore, Saudi Arabia, Japan, U.K, UAE, Canada, Hong Kong, Qatar, and South Korea.
Still, analysts feel that the slight decrease should give a bearish outlook on what to expect this year. Nicholas Mapa, senior economist at ING Bank Philippines said, “For all the heroics displayed by our modern day heroes, we do note the fading punch packed by once very potent FX flows from abroad. We note that adjusted for exchange rate movements, remittances are actually down more substantially than the 0.8 percent recorded by the BSP.”
It is unclear whether or not this data from the BSP also includes remittances sent through cryptocurrencies. In its updated guidelines for virtual asset service providers, virtual asset transactions are treated as cross-border transfers. The value of virtual currency exchange transactions on licensed exchanges soared to $1.2 billion (Php 59 billion) according to the BSP from January to June 2020.
This article is published on BitPinas: Defying Bearish Projections, Cash Remittances Only Slid by 0.3 Percent