Money sent home through banks by the country’s overseas workers fell further in May mainly due to the limited operating hours of financial institutions during the lockdown period.
The Bangko Sentral ng Pilipinas (BSP) yesterday said cash remittances dropped by 19.3 percent to $2.106 billion in May, from $2.609 billion during the same month last year.
This is the third consecutive month that personal remittances posted year-on-year contraction amid the adverse effects of the coronavirus disease 2019 (COVID-19) pandemic on global economic activity, travel and employment.
May’s figure is the biggest contraction on record after April’s 16.2 percent.
BSP explained the decline in cash remittances was due to the limited operating hours of some banks and institutions that provide money transfer services during the lockdown.
BSP also noted that many overseas Filipino workers were repatriated in March, the start of the strict lockdown imposed by the government.
From January to May 2020, cash remittances amounted to $11.554 billion, 6.4 percent lower than the $12.349 billion registered in the comparative period last year.
This developed as remittances of both land- and sea-based workers fell by 7.2 percent and 3.6 percent, respectively.
By country source, the United States registered the highest share to total overseas Filipino remittances at 39.4 percent for January to May.
It was followed by Singapore, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Canada, Hong Kong, Qatar and Taiwan.
The combined remittances from these countries accounted for 78.8 percent of total cash remittances.
Meanwhile, the Asian Development Bank (ADB) said remittances across the world could decline by $108.6 billion this year as job losses mount and employers trim payrolls amid a COVID-19 pandemic that has devastated economies.
“The COVID-19 pandemic is expected to hit remittances hard in Asia and the Pacific,” the ADB report said.
Remittances to Asia, where about a third of migrant workers worldwide come from, could fall by $54.3 billion, or about a fifth of baseline remittances, ADB said.
Remittances to Asia and the Pacific, which amounted to $315 billion in 2019, help fuel the consumption-led growth for some of the region’s developing economies, including the Philippines.
ADB said the countries facing “more severe” effects are those where the share of remittances to the gross domestic product and per capita remittances are high, such as Tonga, Samoa and other Pacific nations.
Georgia, Kyrgyzstan and Tajikistan, which send a large number of seasonal and long-term migrants mainly to Russia and Europe, will also be hard-hit along with Nepal and the Philippines, ADB said.