The Philippine economy is projected to weaken by 0.4% this year in part to the presumptive 5% contraction in remittances due to the ongoing COVID-19 global pandemic. However, the economy is currently projected to rebound at 4% in 2021.
In a virtual briefing held on Thursday, June 18, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the projected drop of inflows is due to job losses of overseas Filipino workers (OFWs).
Diokno explained that the 0.4%-projected slowdown of the economy is a rough computation since their forecasts “are subject to review again because we really don’t know the extent of the pandemic and what’s the outcome in the host countries.”
Further, Diokno noted that the outlook on remittances was based on projections that 200,000 to 300,000 OFWs who primary work in tourism-related services will lose employment.
As of today, less than 50,000 OFWs have been repatriated said Diokno.
“But as you know there are many Filipinos who are in the medical sector like nurses and doctors and looking forward, I think, we should continue to train medical workers here in the Philippines so that maybe in the next pandemic we’ll have a lot of Filipino workers abroad and also working here in the Philippines,” he added.
Initial growth projections of remittance for this year is an expansion of 3% but monetary officials downgraded this to 2% on expectations that there will be lesser inflows coming from Europe and the United States in consideration of the ongoing crisis brought on by the pandemic.
Diokno said they later changed the already revised projection to -5% after citing the job losses of sea-based workers or those working in the cruise ships and cargo ships.