MONEY sent home by overseas Filipino workers (OFW) climbed at its quickest pace in nearly two years in January as diversified deployments helped boost inflows amid global uncertainties.

Analysts, however, warned that the coronavirus disease 2019 (COVID-19) outbreak could dent remittances — which provide a boost to household spending that contributes about 70% to national output — in the coming months.

Cash remittances climbed 6.6% to $2.648 billion in January from $2.484 billion in the same month a year ago, data released by the Bangko Sentral ng Pilipinas (BSP) on Monday showed.

This was the fastest year-on-year growth in remittances since the 7.1% logged in February 2018.

However, inflows were 8.75% lower compared to the $2.902 billion seen in December, which was boosted by seasonal flows.

The BSP targets 3% growth in cash remittances this year.

Meanwhile, personal remittances grew 7.3% to $2.944 billion in January from $2.745 billion a year ago.

The central bank said the United States accounted for the highest share in overall remittances at 38.6%, followed by Japan, Singapore, Saudi Arabia, United Kingdom, United Arab Emirates, Qatar, Canada, Hong Kong and Korea, which together accounted for almost 80% of money sent home by OFWs.

The BSP said cash remittances from land-based workers rose 7.4% to $2.1 billion, while those from sea-based workers went up 3.8% to $550 million.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the quicker growth in cash remittances was supported by the peso’s strength versus the dollar early in the year or before COVID-19 affected investor sentiment.

“The relatively faster growth in OFW remittances may be partly attributed to the stronger peso exchange rate recently, that prompted some OFWs to remit more dollars,” Mr. Ricafort said in an e-mail.

BSP data showed the peso averaged at P50.8386 against the dollar in January.

Likewise, he said that the diverse locations of Filipinos across the world shielded remittances from fears of a global economic slowdown due to COVID-19.

“Increased deployment of OFWs to more countries around the world and improved business relations of the government with countries, somewhat defying the adverse effects of the global economic slowdown…and the lingering US-China trade war,” he added.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said remittance inflows in January are “historically high and comparable to December numbers” or when OFWs send home more money for the holidays.

ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa noted that cash remittances served as the country’s shield from economic downturns in the past, including the Asian and global financial crises.

“Unfortunately, remittances have the odds stacked against them, as the virus has spread across the globe, limiting the natural hedge of Filipino deployment in almost every corner of the globe,” Mr. Mapa said in an e-mail.

Lockdowns will not favor Filipinos, particularly those employed in the services sector, he added.

“Filipinos who are in the services sector will also be hardpressed to send home funds should their businesses be negated by social distancing or community lockdowns hinder business as usual,” Mr. Mapa said.

“In past crises episodes, Filipinos simply took on more jobs or ‘sidelines’ to make ends meet and send home more money but the nature of the virus will likely hinder this as well,” he added.

Security Bank Corp. Chief Economist Robert Dan J. Roces also has dimmer prospects for remittances in the coming months due to deployment ban in some areas where OFWs are employed.

“We think that remittance growth may slow this year due to temporary deployment ban on workers to China, Hong Kong, Taiwan and Macau. A larger slowdown could evolve relative to the duration of the outbreak,” Mr. Roces said in an e-mail.

COVID-19 has infected above 170,000 people around the world and resulted in the death of more than 6,000.

The Philippines had 140 confirmed COVID-19 cases and 12 mortalities as of March 15. — Luz Wendy T. Noble