OFW remittances plunge 6.4% in first five months
Ehda M. Dagooc (The Freeman) - August 4, 2020 - 12:00am

CEBU, Philippines — Money sent to the Philippines by Filipinos working abroad plunged by 6.4 percent in the first five months of 2020.

Report from the Bangko Sentral Ng Pilipinas (BSP) revealed that total remittances in Jan-May 2020 reached US$12.8 Billion, down by 6.4 percent compared to 2019’s US$13.7 billion.

Personal remittances from overseas Filipinos (OFs) amounted to US$2.341 billion in May 2020, 19.2 percent lower than the US$2.896 billion recorded in May 2019.

According to BSP, this is the third consecutive month that personal remittances posted year-on-year contraction amid the adverse effects of the COVID-19 pandemic on global economic activity, travel, and employment, resulting in the repatriation or deferment of employment of many OFWs.

This brought the total remittances for the first five months of 2020 to US$12.835 billion, a decrease of 6.4 percent from the US$13.707 billion recorded in the comparable period in 2019.

Personal remittances from land-based workers with work contracts of one year or more declined to US$1.77 billion in May 2020, 21.1 percent lower than US$2.244 billion recorded in May 2019.

Similarly, remittances from sea-based workers and land-based workers with work contracts of less than one year fell by 12.4 percent to US$519 million in May 2020 from US592 million a year ago.

Of cash remittances that are coursed through banks dropped by 19.3 percent to US$2.106 billion in May 2020 from US$2.609 billion in May 2019.

The decline in cash remittances was due to the negative effects of the continued limited operating hours of some banks and institutions that provide money transfer services during the lockdown and the repatriation of many OFWs in March 2020.

For the period January–May 2020, cash remittances amounted to US$11.554 billion, 6.4 percent lower than the US$12.349 billion registered in the comparative period last year.

This developed as remittances of both land- based and sea-based workers fell by 7.2 percent (to US$8.965 billion from US$9.664 billion) and 3.6 percent (to US$2.589 billion from US$2.684 billion), respectively.

By country source, the United States registered the highest share to total OF remittances at 39.4 percent for January–May 2020. It was followed by Singapore, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Canada, Hongkong, Qatar, and Taiwan.[1]  The combined remittances from these countries accounted for 78.8 percent of total cash remittances.

  There are some limitations on the remittance data by source. A common practice of remittance centers in various cities abroad is to course remittances through correspondent banks, most of which are located in the U.S.

Likewise, remittances coursed through money couriers cannot be disaggregated by actual country source and are lodged under the country where the main offices are located, which, in many cases, is in the U.S. Therefore, the U.S. would appear to be the main source of OFW remittances because banks attribute the origin of funds to the most immediate source.

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