Bangko Sentral ng Pilipinas Governor Benjamin Diokno expressed optimism that remittances will recover from the adverse impact of the COVID-19 pandemic.
Diokno said in a presentation titled “Transitioning Towards the New Economy Post-COVID” during an online forum Wednesday that money sent home by Filipinos working overseas were on a steady growth path and contributed to domestic economic expansion.
Diokno cited the latest data showing cash remittances rose 4.6 percent in the first two months of 2020 to reach $5 billion.
“With its strong contribution to consumption expenditure, we understand the growing concern on how the COVID-19 pandemic will impact on future remittances flows into the country,” Diokno said.
He said the BSP was closely monitoring the latest reports from the Philippine Overseas Employment Administration, Department of Labor and Employment and the Foreign Affairs Department on the deployment of OFWs, displacement and repatriation status.
The World Bank predicted that global remittances would decline by about 20 percent in 2020, with inflows to East Asia and Pacific expected to drop 13 percent, on the lower inflows from the United States, the largest source of remittances to the region.
“However, it is important to point out that crisis or no crisis, Filipinos abroad continue to send remittances to their families at home. It would appear that OFW remittances have an altruistic character. Furthermore, the adverse impact of COVID-19 on remittances may be temporary,” Diokno said.
The Bangko Sentral trimmed its growth forecast for remittances this year to a “conservative” 2 percent, slower than its previous forecast of 3 percent, taking into account the impact of the pandemic to the employment of overseas Filipino workers.
Money sent home by Filipinos working overseas rose 2.5 percent in February to $2.36 billion from $2.301 billion a year ago, at a time when countries were bracing for the global impact of the coronavirus disease 2019 pandemic.
The February expansion was slower than the 6.6-percent growth posted in January 2020. This brought the January-to-February cash remittances to $5.006 billion, up 4.6 percent from the $4.784 billion in the same period last year.
Cash remittances rose 4.1 percent to an all-time high of $30.133 billion in 2019 from $28.94 billion in 2018, according to the BSP.