Bangko Sentral ng Pilipinas Governor Benjamin Diokno dismissed the projections of some analysts that remittances will contract this year by up to 20 percent because of the impact of the world health crisis to the global economy.
Diokno, in a message to reporters Friday, reacted positively to the latest data showing cash remittances declined just 2.6 percent in the first eight months to $19.285 billion from $19.808 billion a year ago.
“That is good news. That is lower than BSP’s revised forecast of negative 5 percent. Other analysts predict that OF remittances would contract by as much as 20 percent,” Diokno said.
“With four months to go before the end of the year, there is a strong likelihood that the 2020 OF remittances would shrink by less than 5 percent,” Diokno said.
Cash remittances in August fell 4.1 percent to $2.48 billion from $2.589 billion in the same month last year on lower inflows from both land-based and sea-based workers.
By country source, the decline in remittances was observed from Saudi Arabia, Japan and the United Arab Emirates. These were partly offset by growth from the US, Siingapore and Malaysia.
Personal remittances, which include non-cash items, also declined 4.2 percent in August to $2.756 billion from $2.875 billion a year ago.
Cash remittances rose 4.1 percent in 2019 to a record $30.133 billion and surpassed the conservative 3-percent growth target of the BSP.
The BSP expects remittances to rebound by 4 percent next year, on expectations that the pandemic would be over by that time.