An economist forecasts the contraction in remittance inflows to the Philippines to continue in the early part of this year before improving amid the rollout of coronavirus disease (Covid-19) vaccination programs worldwide.
The Bangko Sentral ng Pilipinas yesterday reported a 1.7-percent year-on-year decrease of cash remittances from overseas Filipino workers (OFWs) to USD2.895 billion last January.
In a report, Rizal Commercial Banking Corporation chief economist Michael Ricafort said the negative turnout of remittances came following the seasonal surge during the Christmas holidays and the continued repatriation of OFWs because of the pandemic.
“For early part 2021, OFW remittances could still continue to contract year-on-year until some of the repatriated/retrenched/laid off OFWs restore/regain the jobs that they have lost in the same host country or in another host country; also until constraints ease further on travel/flights locally as well as to and from some of the host countries for OFWs,” he said.
This as some countries continue to experience upticks in Covid-19 infections, he added.
However, Ricafort is optimistic of a recovery of remittances as countries where OFWs work continue to roll out their respective Covid-19 vaccination program.
The vaccination program rollout, he said, “could help reduce new coronavirus cases and further improve economic recovery prospects that lead to more jobs/employment opportunities for OFWs than otherwise.”
While repatriation continues to be among the risks for remittances, with the latest figure already around 400,000, Ricafort said this is partly countered by demand for OFW frontline workers, especially in the medical field.
“Going forward, any further recovery in OFW remittances in the coming months would also largely depend/be a function of the further recovery of the economies of the major host countries around the world from Covid-19 lockdowns,” he added.*PNA