Reflecting the impact of the resurgence of COVID-19 infections in several countries, the remittances from overseas Filipino workers (OFW) declined in February to hit the lowest level in three months, according to the data released by the Bangko Sentral ng Pilipinas (BSP) last April 18, 2022.
The data from the BSP showed that cash remittances—money transfers coursed through banks—rose 1.3% to $2.509 billion in February, which is up by 1.3% from $2.476 billion in February 2021, but lower than the $2.668 billion in January from $2.476 billion a year earlier. (Check our Personal Remittances Articles on BitPinas.)
Moreover, personal remittances—the sum of transfers sent in cash or in-kind via informal channels—stood at $2.793 billion, a 1.2% higher from $2.759 billion last year, but still lower than January’s $2.966 billion.
“The growth in personal remittances in February 2022 was slower, however, compared to that in January at 2.5% due in part to the reimposition of restrictions in OF (overseas Filipino) host countries and the Philippines amid a resurgence in COVID cases across the globe,” the BSP wrote.
These numbers are the smallest monthly inflow in three months since the $2.502 billion drag in November last year.
On the other hand, the central bank noted that remittances sent by land-based workers went up 1.2% to $2.007 billion, while those sent by sea-based workers rose 1.6% to $501 million.
“OFW remittances could improve further in the coming months that support the country’s economic recovery prospects from COVID-19, as the global economic recovery would still improve further as more countries, especially those that host large numbers of OFWs, around the world would reach herd immunity in the coming months, fundamentally entailing the creation of more job/employment opportunities for OFWs,” – Michael Ricafort, Rizal Commercial Banking Corp. (RCBC) Chief Economist
He also noted that inflows could increase moving forward as countries reopen.
However, despite the ray of hope brought by the countries’ recovery from the pandemic, Ruben Carlo O. Asuncion, Chief Economist of UnionBank of the Philippines, brought up the ongoing war in Europe that could still affect the country’s remittance economy.
“(February remittance data) has yet to capture any impact from the Ukraine invasion which may impact remittances from Europe and those host countries near Ukraine and Russia,” – Ruben Carlo O. Asuncion, Chief Economist of UnionBank of the Philippines
Nevertheless, the BSP has stated that both Russia and Ukraine have minimal contribution to total remittance inflows.
However, the central bank warned that a war that would involve Europe and Western countries like the United States, that are major remittance sources, could mean a bigger impact for inflows.
This article is published on BitPinas: OFW Remittance Growth Slows in February
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