Security Bank Corp. expects remittances to hit $31 billion this year, up 4 percent from last year’s $29.9 billion and in line with government estimates.
Sanjiv Vohra, Security Bank president, said this will be likely as consumer confidence returns to pre-pandemic levels with countries around the world starting their massive vaccine rollouts.
“The infection is still widespread globally. The United States recently surpassed 500,000 deaths and the detection of the UK and South African variants of the virus has led to the resurgence of new cases in various parts of the globe. However, we have seen positive results from countries such as Israel that have reported great efficacy of the vaccine in preventing new COVID (new coronavirus disease 2019) cases,” said Vohra.
“Once more countries are able to roll out mass inoculations and prevent new infections, we will see consumer confidence go up gradually and we will see sequencing of recovery.
However, recovery will not be the same for everyone. We will see some industries recover faster than others,” he added.
Noel Reyes, Security Bank chief investment officer, said locally, the economy is also on the cusp of recovery, no small thanks to monetary officials’ response to the crisis.
“With the Philippines having the longest and tightest lockdown in the world, the economy has taken a huge blow due to high investor uncertainty causing a significant drop in the Philippine Stock Exchange Index (PSEi). Despite this, the peso has become Asia’s best performer with at least 5 percent growth against the US dollar by the end of 2020,” said Reyes .
Reyes noted the “swift response” of the Bangko Sentral ng Pilipinas (BSP) to circumvent the negative effects of the economy greatly helped in containing the damage even with the country posting the lowest GDP on record with -16.9 by the second quarter of last year.
It also helped the decline in remittances last year was minimal despite even after over 500,000 overseas Filipino workers returned home due to the pandemic.
“Full-year remittance growth only decreased by 0.8 percent year-on-year. The performance was even better than the central bank’s revised forecast of -2 percent and an earlier forecast of -5 percent during the peak of the pandemic. This was also better than the World Bank’s projection of -13 percent during Q2 (second quarter) 2020. With vaccination programs underway, this will continue to improve,” said Reyes.
“Opportunities for growth can also be taken to action as the Financial Institutions for Strategic Transfer bill has been signed by President Duterte and the Corporate Recovery and Tax Incentives for Enterprises bill is awaiting the president’s signature,” he added.