GLOBAL REMITTANCE inflows could still grow this year, although some countries and sectors may see some impact from the pandemic, UniTeller said.
“In the past, remittances have been resilient but COVID-19 has been very different,” UniTeller CEO Alberto Guerra said in an online briefing on Wednesday.
“Corridors like Vietnam and the Philippines have not been affected as much, also Mexico. In particular, some countries in Latin America have been affected more,” he said.
The World Bank in April said global remittances could fall by 20% as the pandemic has affected economic activity in many countries due to lockdowns that have caused shutdowns of different industries.
Mr. Guerra said that the World Bank’s projection is “aggressively pessimistic” and will depend on various factors, including the country and industry sources for remittance inflows. He said the projected drop has not been observed so far, noting that some countries have seen declines but some have also seen growth.
“If you are going to ask me if Philippine remittances will go down by 20%….no, [it will not],” he said.
Bangko Sentral ng Pilipinas (BSP) data showed cash remittances to the Philippines in February grew by a slower pace of 2.5% year on year to $2.301 billion compared to the 6.6% expansion in January when inflows totaled $2.648 billion.
The BSP has already cut its growth projection for remittances to 2% this year from its 3% forecast before the virus hit.
Mr. Guerra said there will be varied impact depending on the source of remittances.
“Remittances coming from Hong Kong, Singapore, from the Middle East have been affected more than those from North America,” he said.
Aside from the pandemic, the decline in oil prices due to falling demand has affected some Middle East economies, which could in turn affect remittances from workers there.
“From Europe, we also have a mixed perspective — remittances from Spain, Italy, they have seen more impact more than other countries,” he added.
According to Mr. Guerra, industries that will be “dramatically hit” will be those in construction, cruise lines and travel-related industries, among others.
Meanwhile, he said those working in basic services as well as the healthcare sector will feel a minimal impact.
Lockdowns and political tensions have also affected remittances in the short term, Mr. Guerra said. In the case of domestic helpers in Hong Kong, he said although they continue to receive wages, the current turn of events has rendered them unable to go out to remit money.
Meanwhile, Mr. Guerra also said more migrant workers are opting to send remittances through digital means. He said many remittance companies have seen faster growth in online transactions versus traditional ones.
“The pandemic will just continue that process to grow…,” he said. — L.W.T. Noble