April 28, 2020 – Because of the ongoing public health situation, the Bangko Sentral ng Pilipinas (BSP) foresees a decline in remittances to the Philippines this 2020.
Cash remittances will decline particularly those coming from sea-based OFWs. Many of them have been repatriated already. BSP Assistant Governor Iluminada T. Sicat said remittances will contract by 0.2 – 0.8 %.
Personal remittances from Overseas Filipinos have reached a record high of US$33 billion in 2019. The growth was primarily from land-based workers but there was also an upsurge in remittances from sea-based and land-based workers with less than one year in their contracts.
Money was mostly remitted through banks. Cash remittances amounted to US$30.1 billion, an all-time high. BSP noted remittances remained strong “despite political uncertainties” in 2019.
It’s a different story in 2020, however, as the Coronavirus that was first largely contained to an area in China became a pandemic. There is no vaccine for COVID-19, and the greatest defense is to maintain distance with each other. The difficulty to go out, partnered with skeleton workforce, and thousands of industries disrupted, many people have lost their jobs, and that includes OFWs. This will directly contribute to the decline in remittances in the coming months. The decline will continue as the pandemic continues.
Remittances account for almost 10% of the country’s GDP.
The decline in remittance will have a tremendous effect on consumption. With a tight budget, many will most likely buy only the necessities. This will be likely felt once the pandemic is over and businesses resume normal operations.
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This article is published on BitPinas: BSP: Remittances Will Drop This Year