An economist forecasts the contraction in remittance inflows to the Philippines to continue in the early part of 2021 before improving amid the rollout of the coronavirus disease (Covid-19) vaccination programs around the world.
The Bangko Sentral ng Pilipinas (BSP) on March 15 reported a 1.7% year-on-year decrease of cash remittances from overseas Filipino workers (OFWs) to USD2.895 billion last January 2021.
In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the negative turnout of remittances were the result of the seasonal surge during the Christmas holidays and the continued repatriation of OFWs because of the pandemic.
“For early part 2021, OFW remittances could still continue to contract year-on-year until some of the repatriated/retrenched/laid off OFWs restore/regain the jobs that they have lost in the same host country or in another host country; also until constraints ease further on travel/flights locally as well as to and from some of the host countries for OFWs,” he said.
This comes as several countries continue to see huge spikes in Covid-19 infections.
However, Ricafort is optimistic of a recovery of remittances as countries where OFWs work continue to roll out their respective vaccination programs.
The vaccination program rollout, he noted, “could help reduce new coronavirus cases and further improve economic recovery prospects that lead to more jobs/employment opportunities for OFWs than otherwise.”
While repatriation continues to be among the risks for remittances, with the latest figure already hovering around 400,000, Ricafort said this is partly countered by demand for OFW frontline workers, especially in the medical field.
“Going forward, any further recovery in OFW remittances in the coming months would also largely depend/be a function of the further recovery of the economies of the major host countries around the world from Covid-19 lockdowns,” he added.