MANILA – Sustained inflows of remittances from overseas Filipino workers (OFWs) amidst the pandemic is expected to be among the fuels of peso’s continued strength this year.
In a report, ING Bank Manila senior economist Nicholas Mapa cited the end-November 2020 cash remittances amounting to USD27.01 billion.
Personal remittance, which includes both cash and in-kind current transfers, amounted to USD29.988 billion during the same period, data released by the Bangko Sentral ng Pilipinas (BSP) Thursday showed.
The BSP reported a 0.3-percent growth of cash remittances last November while personal remittances, which include both cash and in-kind current transfers, rose by 0.1 percent.
End-November cash remittances, however, declined by 0.8 percent and personal remittances by 0.9 percent, which economists and authorities attribute to the impact of the pandemic.
Mapa traced the 0.3-percent rise of inflows from Filipino workers abroad last November to “recent depletion in the stock of OFs (overseas Filipinos) likely weighing on flows.”
This, after more than 300,000 OFWs have been repatriated since the start of the pandemic due to job losses.
Despite the drop in the number of OFWs to date, Mapa said the growth of remittances is “on track to close flat from last year.”
“Remittance support has been crucial in 2020 as recession grips the Philippine economy,” he said.
Inflows from OFWs are among the domestic economy’s growth drivers for decades now as these account for nearly 10 percent of annual output.
Mapa said the “steady remittances coupled with implosion of import demand, (is) lending support to the PHP (Philippine peso) amidst the weak global USD (US dollar) narrative.”
“2021 could see a continuation of the trend of modest remittance gains although import demand may improve marginally, bouncing from the low base of 2020,” he added. (PNA)
