Philippines may see US$35 billion OFW remittances fall by 20% this year

MANILA, April 23 (Inquirer Business/ANN) - Remittance flows to the Philippines may decline by more than a fifth this year as many Filipinos working and living abroad stand to lose employment while the global economy grapples with the COVID-19 pandemic, the Washington-based World Bank said.

“Year-on-year growth in remittances [to the Philippines] for January and February 2020 was 4.8 percent and 4.4 percent, respectively, suggesting little slowdown to date. However, the government is anticipating a 20-30 percent decline in remittances for 2020 and a corresponding growth rate of 2 percent due to the fallout from COVID-19, ” the World Bank said in its latest Migration and Development Brief for April 2020 titled “COVID-19 Crisis Through a Migration Lens” released on Wednesday.

Remittances from overseas Filipino workers (OFWs) rose by a faster 4 percent to $35.2 billion last year, the World Bank noted.

The World Bank nonetheless said that historically, countries hit by crises tended to receive more remittances as migrants supported their families back home.

“Migrants new and old increase the amounts they send home during times of crisis and hardship in their country of origin, a phenomenon [called] as the countercyclicality of remittances, ” it said.

“During a crisis in the host country, however, remittances can decline. For instance, during the global financial crisis, remittance flows to low- and middle-income countries declined by 5 percent in 2009, ” it added.

In the case of the Philippines, the World Bank noted: “[An] event study showed the countercyclical increase in remittance flows to the Philippines during the bird flu pandemic in November 2003, and a procyclical decline in response to the global financial crisis starting in September 2008.”