The central bank said cash remittances or transfers via the banking system has declined by 6.4 percent year-on-year in the first five months of the year to $11.554 billion from $12.349 billion.
“The decline in cash remittances was due to the negative effects of the continued limited operating hours of some banks and institutions that provide money transfer services during the lockdown and the repatriation of many OFWs (Overseas Filipino Workers) in March 2020,” said the Bangko Sentral ng Pilipinas (BSP) in a statement Monday.
The cash remittances of land-based overseas Filipinos dropped 7.2 percent to $8.965 billion compared to same time last year of $9.664 billion. The remittances of sea-based workers also dipped 3.6 percent to $2.589 billion from $2.684 billion.
“By country source, the US registered the highest share to total overseas Filipinos remittances at 39.4 percent for January–May. It was followed by Singapore, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Canada, Hongkong, Qatar, and Taiwan,” the BSP said. “The combined remittances from these countries accounted for 78.8 percent of total cash remittances.”
For the month of May only, remittances sent through the banks decreased by 19.3 percent to $2.106 billion compared to $2.609 billion same time in 2019.
Also for the month of May, personal remittances fell by 19.2 percent to $2.341 billion versus $2.896 billion in May 2019.
Personal remittances from land-based workers with work contracts of one year or more slipped by 21.2 percent to $1.77 billion in May from $2.24 billion. Sea-based workers and land-based workers with work contracts of less than one year also declined by 12.4 percent to $519 million from $592 million in 2019.
According to the BSP, “this is the third consecutive month that personal remittances posted year-on-year contraction amid the adverse effects of the COVID-19 pandemic on global economic activity, travel, and employment, resulting in the repatriation or deferment of employment of many OFWs.”
For the cumulative January-May, personal remittances went down by 6.4 percent year-on-year to $12.835 billion from $13.707 billion. Personal remittances as defined by the BSP, is the “sum of net compensation of employees, personal transfers and capital transfers between households.”
For 2020, the BSP expects cash remittances to contract by five percent and end up with $28.6 billion and then recover next year, bouncing back to a four percent growth to $29.8 billion.
Last year, cash remittances reached $30.133 billion or up 4.1 percent from 2018, while personal remittances grew by 3.9 percent year-on-year to $33.467 billion.