FILIPINO migrant workers continued to send more money back home in November last year despite the ailing global economic health brought about by containment measures for the pandemic, prompting the Central Bank chief to hail them for their “altruistic motives.”
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno reported that cash remittances are continuously closing the gap between the pre-Covid volume of remittances to the volume of money sent home in 2020.
Diokno said November cash remittances grew 0.3 percent to $2.379 billion in November 2020 from $2.372 billion in November 2019. Broken down, cash remittances from land-based workers rose by 0.5 percent to $1.852 billion, while that of sea-based workers declined by 0.2 percent to $527.3 million.
This pushed the cash remittance stock of the Philippines for the first 11 months of 2020 to $27.013 billion, representing a decrease of 0.8 percent from the $27.231 billion registered in the comparative period in 2019.
Remittance to the Philippines started contracting on a cumulative basis in April 2020 with a 3-percent decline from the previous year’s total remittances. This peaked in May when the total five-month remittances were already down 6.4 percent from the same January-to-May remittance level in 2019. The gap started to narrow since and has been registering a monthly growth output since June with the exception of August.
The outlier performance of remittances in a period when the global economy is down and job cuts are rampant was attributed to the “altruistic” nature of Filipino migrant workers.
“Thanks to our overseas Filipinos who I think, basically because of their altruistic motives, continued to send remittances to their families back home knowing that we have problems at home,” Diokno said.
By country source, cash remittances from Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Germany and Kuwait declined, while those from the United States, Singapore, Qatar, Oman, Hong Kong and Taiwan increased.
The US posted the highest share of the total remittances at 40.1 percent, followed by Singapore, Saudi Arabia, Japan, the UK, the UAE, Canada, Hong Kong, Qatar and Korea. The combined remittances from these countries accounted for 78.6 percent of the total cash remittances.
Despite being in the growth territory, November’s remittance growth of 0.3 percent is still lower compared to the previous month’s 2.9-percent growth.
ING Bank economist Nicholas Mapa said the tamer growth of remittances may be a result of a recent depletion in the stock of overseas Filipinos working abroad.
Mapa, however, said that the steady remittance support has been crucial in 2020 as recession grips the Philippine economy.
“Steady remittances coupled with implosion of import demand, lending support to the Philippine peso amidst the weak global US dollar narrative,” Mapa said.
“2021 could see a continuation of the trend of modest remittance gains although import demand may improve marginally, bouncing from the low base of 2020,” he added.
Image credits: Nonie Reyes