FILIPINO migrant workers deployed in the Middle East are sending less money back home, data from the Bangko Sentral ng Pilipinas (BSP) shows, as tighter labor conditions hound remittances from the region.
Remittances from the Middle East—the Philippines’s second-largest regional remittance source—have been indicating signs of steady decline, according to the Central Bank’s latest data on the breakdown of remittances per country source.
It was in 2018 when remittances from the Middle East snapped their growth streak to register a 15.3-percent decline of money sent back home year-on-year.
This decline in 2018, however, seems to be a brewing trend. In the first five months of the year, remittances from the Middle East were already showing a 6.6-percent decline from the level it has incurred in the same January-to-May period last year.
The struggle, according to ING Bank Manila economist Nicholas Mapa, seems to stem from the major country sources such as Qatar, Saudi Arabia and the United Arab Emirates.
Data from the Central Bank show that among these three countries with sizeable monthly remittances to the Philippines, Qatar posted the largest decline with 19.5 percent. Both the UAE and Saudi also posted declines in the first five months of the year.
Tighter labor conditions are being blamed for the region’s inability to generate more remittances for the country in recent years.
Mapa said the unfavorable employment developments from host countries in the Middle East, such as the Saudization or Nitaqat system—which prioritizes citizens over migrant workers in their respective countries—likely played a huge part in the declining remittance values of the region.
“In early 2019, the accreditation of foreign recruitment agencies and number of contracts were trimmed, perhaps to help improve the working conditions for Filipinos being sent abroad. Such a move may be carried out to help ensure the safety and well-being of our OFs but the cost, of course, is less remittances sent from those areas,” Mapa said.
“Workers in the Middle East may have also been receiving irregular salaries, leading to volatile amounts of remittances back home,” Mapa added.
The Middle East is second only to the Americas in terms of regional source of remittances to the Philippines. In 2018 Middle East remittances accounted for roughly 23 percent of all cash remittances sent to the Philippines. America accounted for about 38 percent, while Asia’s remittances account for roughly 20 percent of the total.