Evidence mounting for remittance collapse as repatriations top 100,000
OVERSEAS-WORKER repatriations during the pandemic have hit 102,000 so far, with even more due to return after losing their jobs due to weak global economies or even falling ill from coronavirus, an economist said.
Ateneo Center for Economic Research and Development (ACERD) Director Alvin P. Ang said in an Asian Development Bank (ADB) webinar Tuesday that around 300,000-400,000 OFWs could lose their jobs as a result of the pandemic, based on April estimates issued by ACERD.
The government estimate for further repatriations is for about 100,000 more returning home.
He said cash sent home by Filipino migrant workers is mostly used for food and other household needs, but a “significant portion” also went to paying for education, debt and medical expenses.
The ADB released a policy brief Monday estimating a worst-case remittance decline of 20.2%, equivalent to $5.789 billion in lost remittances, assuming that global economies normalize after about a year of pandemic containment efforts.
The bank estimated that in event of the worst case, the impact will be felt by 8.4% of all households receiving remittances.
According to the Bangko Sentral ng Pilipinas, remittances totaled $28.9 billion in 2018 and $30.1 billion in 2019.
The central bank announced that overseas Filipino worker (OFW) remittances dropped 19% year on year to $2.106 billion in May, the largest drop since a 33.5% fall in January 2001.
OFWs, according to Mr. Ang, are largely concentrated in the Middle East where 55% or around 1.262 million OFWs are based. The leading deployment destinations are Saudi Arabia, Qatar and United Arab Emirates.
In Asia, where remittance inflows are expected to drop by about $31.356-$56.968 billion, ADB Economic Research and Regional Cooperation Department Senior Economist James P. Villafuerte said around 54% or $16.8 billion will come from the Middle East, while the US will account for some 30% or $8.8 billion.
The impact varies among migrant workers, depending on the sector in which they are employed and the overall economic conditions of host countries, said Aiko Kikkawa Takenaka, an economist at the ADB, during the same webinar.
Ms. Takenaka said workers employed in leisure and hospitality sectors will be the most affected, as well as those in retail, wholesale, manufacturing, accommodation and food services.
“Recruited migrants are another hidden victim. The deployment of a new batch of workers is being suspended in many countries due to travel restrictions, although some countries such as the Philippines continue to allow out-migration under some conditions. Travel restrictions have serious consequences for migration,” she added.
Mr. Ang said the Philippines has been “proactive” in helping OFWs through repatriation flights and by providing some income support, but these are still not enough as the pandemic continues to escalate.
“Our view is that the Philippine government cannot do it alone; they have to negotiate with the destination countries if there are still a lot of workers (in host countries), especially those that are recovering right now, if it’s possible (to ask them) not to send back the workers yet,” he said.
OFW skills can be “retooled” for other jobs to allow them to continue working in their host countries, he said.
“This is a huge bilateral initiative that has to be done by the Philippines with a lot of destination countries… Many things need to be done in an international coordinated manner in this because a lot of workers are going to be affected. If it is possible, a multilateral approach to this challenge must be initiated soon,” he said. — Beatrice M. Laforga