OFW remittances dip for 2nd month in January

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CASH remittances sent by Filipino migrant workers declined by about $45 million in January 2021 compared to the level in the same month last year, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

Overseas Filipino workers’ (OFW) remittances hit $2.603 billion in January this year, posting a 1.7-percent decline from $2.648 billion in the same month in 2020.

This is the second consecutive month that remittances declined after consistently being in growth territory since September 2020—a trend that many had found remarkable, given how the Covid-19 pandemic gouged economies worldwide, cutting jobs of overseas Filipinos and forcing hundreds of thousands to return home.

The P2.603-billion January remittance level is also $287 million lower than the $2.89-billion level in December of 2020.

Broken down, the decline in cash remittances can be traced to the lower land-based workers’ remittances, which contracted by 2.4 percent to hit $2.044 billion during the month. Sea-based workers, meanwhile, slightly cushioned the blow to marginally increase by 1 percent and hit $558 million.

By country source, the United States registered the highest share to total remittances at 40.9 percent. This is followed by remittances from Singapore, Saudi Arabia, Japan, the United Kingdom, Canada, the United Arab Emirates, Qatar, Malaysia and Taiwan.

The combined remittances from these countries accounted for 78.2 percent of total cash remittances during the period.

Earlier this year, economists from the University of Asia and the Pacific (UA&P) and First Metro Investment Corporation (FMIC) said remittances are expected to bounce back this year as advanced economies, especially those in the Middle East, are expected to recover.

“OFW remittances will retake the positive territory even as the 2020 record showed only a slight 0.8-percent dip,” FMIC and UA&P analysts said in the latest issue of The Market Call.

FMIC said the expected recovery of remittances for this year will likely be driven by the recovery of Middle Eastern economies, most of which are havens for Filipino migrant workers.

“The nascent economic recovery in the advanced economies and the Middle East [due to higher oil prices] will provide the boost,” economists said.

Image credits: Bernard Testa