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Remittance dampener

The diplomatic row with Kuwait has quickly taken its toll on the money sent home by Filipinos working overseas. Remittances declined 9.8 percent in March to $2.36 billion from a year ago, the biggest drop in 15 years, due in part to the repatriation of Filipinos from Kuwait.

The disappointing March figure, a reversal from the 4.5-percent growth in February, brought cash remittances in the first quarter to $7 billion, just up by 0.8 percent from $6.953 billion in the same period last year.

It would not be entirely correct to blame the lower March remittances to the decision of President Rodrigo Duterte in February to prohibit Filipino workers from heading to Kuwait after the discovery of domestic helper Joanna Demafelis’ corpse in a freezer in her employer’s home. The labor row worsened when Mr. Duterte declared on April 30 that the ban on Filipino workers leaving for the Gulf nation was permanent and urged Filipinos there to come home if they were being mistreated.

Bangko Sentral Deputy Governor Diwa Guinigundo said the negative remittance growth in March was primarily due to base effect following the sharp increase in remittances in March 2017 at 10.7 percent. But the official conceded that the continued repatriation of migrant Filipino workers from the Middle East countries could have affected the inflows of cash remittances.

Preliminary data from the Labor Department showed that some 1,124 workers were repatriated from Kuwait as of Feb. 8, 2018. The Foreign Affairs Department estimated that around 262,000 Filipinos work in Kuwait, nearly 60 percent of them domestic workers.

The Philippines fortunately on Wednesday lifted the ban on migrant workers heading to jobs in Kuwait. The decision followed the signing of an agreement between Kuwait and the Philippines to regulate and protect the hundreds of thousands of Filipinos seeking higher-paid employment in the wealthy Arab state.

Lessons were clearly learned from the diplomatic spat with Kuwait. The Philippines was right in protecting the interests of the Filipino workers in Kuwait. But it should not have opted for the rash decision to ban the deployment of workers to Kuwait or any other country for that matter. The stakes are just too high.

Topics: Philippines , Kuwait , Rodrigo Duterte , Joanna Demafelis , Diwa Guinigundo , Bangko Sentral ng Pilipinas , Department of Foreign Affairs
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