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Remittances dip as OFWs feel the pinch
Remittances from overseas Filipinos (OFs) experienced their first annual contraction in two decades, falling by 0.8% in 2020 to $29.903 billion.
This decline is attributed to some overseas Filipino workers (OFWs) losing their jobs and others conserving funds amid the pandemic.
The Bangko Sentral ng Pilipinas (BSP) had initially forecast a 2% contraction, making the actual decline better than expected.
However, when adjusted for exchange rate movements, remittances contracted by a steeper 4.8% in Philippine peso terms.
This is because the peso appreciated in 2020, requiring OFWs to send more dollars to cover fixed peso expenditures back home.
The total amount of remittances in 2020 was slightly lower than the $30.133 billion recorded in 2019.
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