Overseas Filipinos’ cash remittances reached $27.013 billion as of end-November 2020, down 0.8 percent year-on-year from $27.231 billion same time in 2019, the Bangko Sentral ng Pilipinas (BSP) reported Thursday.
The BSP had projected that cash remittances will contract by two percent in 2020 due to the impact of the COVID-19 pandemic. For this year, they estimate a return to its annual growth of four percent which was the usual growth projection before the global public health crisis.
“This is proof that remittances continue to be robust and thanks to our overseas Filipino remittances who I think — basically because of their altruistic motive — continue to send remittances to their families back home, knowing there are problems at home,” said BSP Governor Benjamin E. Diokno during his now weekly virtual “GBED Talks” with the media.
Diokno has been saying for months that their outlook on remittances were not as bad as initially projected. Some private sector analysts estimated a big drop by as much as 20 percent. But the BSP which earlier projected a decrease of four percent in 2020 stuck to its projections. Later this was revised to just two percent decline in remittances.
“This is again a big departure from the projections by many analysts that overseas Filipino remittances will contract or will go down by at least 20 percent. So, the decline is only 0.9 percent (for personal remittances) from January to November. That’s good news,” said Diokno.
For the month of November, the bank-channelled cash remittances went up slightly by 0.3 percent to $2.379 billion from $2.372 billion same time in 2019. The BSP said cash remittances from land-based workers rose by 0.5 percent to $1.852 billion while sea-based workers’ fund transfers dipped by 0.2 percent to $527.3 million.
ING Bank economist Nicholas Mapa said remittances is “on track to close flat from last year” and that its support “has been crucial in 2020 as recession grips the Philippine economy.”
“Steady remittances coupled with implosion of import demand, lending support to the peso amidst the weak global US dollar narrative,” he said. For this year, he added that “2021 could see a continuation of the trend of modest remittance gains although import demand may improve marginally, bouncing from the low base of 2020.”
For the 11-month period, cash remittances coming from Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates (UAE), Germany, and Kuwait were lower than previous numbers. Remittances from the US, Singapore, Qatar, Oman, Hong Kong, and Taiwan increased.
“The US posted the highest share of the total remittances at 40.1 percent, followed by Singapore, Saudi Arabia, Japan, the UK, the UAE, Canada, Hong Kong, Qatar, and Korea,” said the BSP. “The combined remittances from these countries accounted for 78.6 percent of the total cash remittances.”
The BSP also reported that as of end-November, personal remittances amounted to $29.988 billion, down 0.9 percent from $30.252 billion in 2019.
For the month of November, personal remittances slightly increased by 0.1 percent year-on-year to $2.643 billion from $2.639 billion in 2019.
According to the BSP, the “moderate growth was attributed to the 0.5 percent increase in remittances from land-based workers with work contracts of one year or more to $2.01 billion from $2 billion recorded in November 2019. Meanwhile, remittances from sea-based workers and land-based workers with work contracts of less than one year fell slightly by 0.3 percent to $575 million in November 2020 from $577 million a year ago.”