The estimated 10 million Filipino citizens working abroad helped boost the Philippine economy just as trade numbers came out worse than expected. This data will give the Philippine central bank a boost of confidence in the economy and prevent it from entering into a worst-case scenario situation. Although 200,000+ Filipinos living overseas have returned to the Philippines due to the pandemic. The unexpected rise could also be due to the fact that before returning home Filipinos are sending their foreign savings into their local Philippine bank accounts. Whatever the exact region may be, the Philippine economy is still heavily dependent on foreign remittances repatriated back home.
Remittances are a big source of disposable income among Filipino families, as the dollars sent home provide for food, daily expenses, school fees, and even luxuries of their loved ones at home. This boosts household spending and supports economic activity, which has slumped due to local lockdowns.
In a statement, published by the Bangko Sentral ng Pilipinas (BSP) - remittances from overseas Filipino workers amounted to $2.8 billion in September 2020, which was higher by 9.1% than the $2.6 billion recorded in the same month in 2019.” This is the largest increase in over 2 years. As a result, total remittances for the first 9 months of 2020 amount to $24.3 billion, a 1.4% decline from 2019. The original forecast was for a 5% decline in remittances for 2020.
From January to September 2020, cash remittance amounted to P21.8 billion, a slight decrease of 1.4 percent from $22.1 billion in the same period in 2019.
By country source, cash remittance for the first nine months of 2020 from the
United States (40.1%)
Singapore
Qatar
Hong Kong
Taiwan
The remittances from the countries listed above account for 78.8% of total cash remittances.
Overseas remittance flows have swung between growth and contractions in the trailing months as the implementation and lifting of lockdowns in different parts of the world affect the economies where Filipinos sending money home live. As a result, remittances are still expected to be very volatile in the months ahead as the recovery in different parts of the world continues to face difficulty.
Analysts expect “remittance flows to be about 5% lower for the year and 300,000+ Filipinos returning home after losing their jobs abroad.”
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