Nomura sees OFW remittances rising 5.1% this year

MANILA, Philippines — Japanese investment bank Nomura expects a 5.1 percent increase in remittances from overseas Filipino workers (OFWs) this year with the reopening of economies in host countries amid the continued rollout of COVID-19 vaccines.

Euben Paracuelles, chief economist for Southeast Asia at Nomura, said the projected growth in remittances reflects low base effects last year as about half a million OFWs were displaced by the impact of the pandemic.

“The outlook for remittances is still uncertain in our view. While some host countries like the US are recovering, worker deployments from the Philippines may be slow to recover due to the local COVID situation.  The latest border restrictions in Taiwan and Singapore may pose additional headwinds in the near term,” Paracuelles said.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed personal remittances went up by 5.6 percent to $2.8 billion in March from $2.65 billion in the same month last year and by 2.9 percent to $8.45 billion in the first quarter of the year from $8.22 billion in the same quarter last year.

Personal remittances include all current transfers in cash or in kind by OFWs, as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines.

On the other hand, cash remittances coursed through banks also grew by 4.9 percent to $2.51 billion in March from $2.4 billion in the same month last year, and by 2.6 percent to $7.59 billion from January to March compared to $7.4 billion in the same period last year.

Remittances increased for the second consecutive month, reflecting the easing of travel restrictions, re-opening of borders to foreign workers, and progress in COVID-19 vaccine rollout in many advanced countries.

The BSP sees OFW remittances recovering this year with a four percent growth after slumping by 0.8 percent in 2020 from a record high in 2019.