The Philippines remains one of the top five remittance recipient countries in 2020, even as total remittances posted a small decline year-on-year, a World Bank report released yesterday showed.
According to the latest Migration and Development Brief released by the World Bank, in current US dollar terms, the top five remittance destinations among low- and middle-income countries last year were India, China, Mexico, the Philippines, and the Arab Republic of Egypt.
“Defying earlier predictions of shrinking flows due to the pandemic, remittances to the Philippines fell by 0.7 percent in 2020. A key factor behind this resilience was the growth (by 5.5 percent) of inflows from United States, by far the largest source of remittances to the Philippines (almost 40 percent in 2020),” the report said.
The paper said the positive growth in remittances from the United States and Asia helped to mostly offset declines from the Middle East and Europe, which fell by 10.6 percent and 10.8 percent, respectively, in 2020.
“The decline from the Middle East reflects the absence of formal safety nets available to migrant workers in the face of the pandemic and the large repatriation of overseas Filipino workers,” the report said.
The paper said a weak oil price also affected the employment of migrant workers in the Gulf Cooperation Council (GCG) countries, and more recently, outward remittances from the region.
“Judging from the data reported by the Philippines, remittances from Saudi Arabia to this country declined by 36 percent from a peak of $2.8 billion in 2015 to $1.8 billion in 2020, and the decline was the steepest (14 percent) in 2020,” the report said.
“This gradual decline is consistent with the longer-term trends in oil prices as well as policy measures that encourage the hiring of nationals in Saudi Arabia as well as other GCC countries,” it added.
Meanwhile, despite the coronavirus disease 2019 (COVID-19), the World Bank said remittance flows remained resilient in 2020, registering a smaller decline than previously projected.
Officially recorded remittance flows to low- and middle-income countries reached $540 billion in 2020, just 1.6 percent below the 2019 total of $548 billion, according to its report.
The Washington-based agency said the decline in recorded remittance flows in 2020 was smaller than the one during the 2009 global financial crisis, which then posted a drop of 4.8 percent.
The World Bank said main drivers for the steady flow included fiscal stimulus that resulted in better-than-expected economic conditions in host countries, a shift in flows from cash to digital and from informal to formal channels, and cyclical movements in oil prices and currency exchange rates.
The true size of remittances, which includes formal and informal flows, is believed to be larger than officially reported data, though the extent of the impact of COVID-19 on informal flows is unclear, the bank said.
“As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” Michal Rutkowski, global director of the social protection and jobs global practice at the World Bank, said.
“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants,” he added – Angela Celis
