BANGKO SENTRAL ng Pilipinas Governor Benjamin E. Diokno on Tuesday said inflows from sea-based overseas Filipino workers (OFWs) may remain weak, as the coronavirus pandemic drags on.
Cash remittances from OFWs coursed through banks rose by 7.7% to $2.465 billion from a year ago, driven by a recovery in inflows from land-based workers, the central bank said.
“While land-based OFWs appear to have recovered, sea-based OFWs continue to face challenges as world trade remains sluggish while cruise-ship based tourism is moribund,” Mr. Diokno told BusinessWorld in a text message.
Year to date, cash remittances slipped by 4.2% to $14.079 billion.
“In a sense, the year-to-date 4.2% slippage in OF (overseas Filipino)remittances should be seen as a positive development. It is a big departure from the grim forecast that OF remittances would plunge by 20% or higher by some analysts,” Mr. Diokno said.
The BSP projects cash remittances to drop by 5% this year.
The Asian Development Bank said remittance inflows to the Philippines could plunge by as much as 20.2% this year under a worst-case scenario when the pandemic drags on for a year.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said countries where remittances continued to grow are those that have effectively dealt with the coronavirus, such as Taiwan.
He noted that countries in the Middle East were also suffering from the decline in global oil prices, leading to more job losses and reduced salaries for OFWs.
Asian Institute of Management economist John Paolo R. Rivera said remittances continue to increase from countries that employ OFWs in essential sectors like healthcare, education, production, manufacturing, and the service sector.
“Repatriating more OFWs in the future will affect our remittance inflow and would be a challenge for the government to provide alternative livelihood for them especially that there is no definite time when things will go back to normal,” Mr. Rivera said in an e-mail.
Against this backdrop, the government may have to rethink its policy of exporting labor.
“This crisis is an opportunity to reform and the ultimate goal has been to keep our human capital within our borders, to provide good and quality job opportunities here,” Mr. Asuncion said.
More than 135,000 OFWs have been repatriated as of mid-August, according to the Department of Foreign Affairs. — Luz Wendy T. Noble