OFW remittances may fall 5% in 2020

Overseas Filipino worker remittances are projected to decline by 5% in 2020, a reversal from the previously projected 3% growth, due to the COVID-19 pandemic's impact on global economies and labor.

The Bangko Sentral ng Pilipinas (BSP) estimates this will lead to a shortfall of $2.1 billion in dollar inflows, with total remittances possibly reaching only $28.6 billion for the year.

By 2021, the BSP expects remittances to recover and bounce back by 4%, potentially reaching $29.8 billion.

The primary causes for the projected decline include the large-scale repatriation of Filipino workers and significant economic disruptions in host countries.

The last time remittances saw an annual decline was in 2001, and the current projected contraction is the most significant since 1999.

In the first quarter of 2020, cash remittances totaled $7.403 billion, a slight increase of 1.4% year-on-year, supported by remittances from land-based and sea-based workers.

However, remittances dropped in March by 4.7% due to fewer Filipino deployments overseas and lower demand for workers in oil-producing countries like Saudi Arabia, UAE, and Kuwait.