OF remittances to improve this year

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    SB Equities Inc. expects overseas Filipino (OF) remittance last year to settle at $29.18 billion, a contraction of 3 percent, before improving to $31 billion this year.

    The Bangko Sentral ng Pilipinas (BSP) has reported that November remittances stood at $2.37 billion, up 0.3 percent. The BSP expects OF remittance to contract by 2 percent.

    SB Equities however noted a 13 percent contraction in cash remittances month-on-month, down from October’s $2.74 billion.

    “The month-on-month easing could partly be attributed to new lockdown measures imposed in the host countries, necessitating some need to create fund reserves on the part of the sender and thus some pullback in money being sent home,” it said.

    “Some European countries including the United Kingdom and Germany reimposed lockdowns in November to curb a surge in COVID-19 cases. This trend could likely continue with the December data, where further lockdowns were imposed,” SB Equities added.

    In the 11 months of 2020, remittance amounted to $27.01 billion, down 0.8 percent.

    “Remittances for 2021 are expected to be higher, notably those coming from the US which is the largest source, as larger stimulus measures are poised to be implemented under the Biden administration. This and possible reopening in host countries as vaccine rollouts progress should contribute to the levels and accrue to household consumption that should transmit positively to growth,” SB Equities said.

    The United States remained the biggest source of OF remittances at 40.1 percent of total, followed by Singapore, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Canada, Hong Kong, Qatar and Korea.