Remittances to Philippines could fall by up to 30% amid virus crisis

Remittances from Overseas Philippine Workers, which amounted to $33.5 billion last year, or roughly ten per cent of the country’s GDP, could fall by up to 30 per cent in 2020 as the coronavirus keeps people working abroad out of jobs and causes their salaries shrinking or even evaporating.

The 30-per cent drop, which would translate into $10 billion less cash coming in for mostly low-earning Philippine families, is the worst scenario named by economic planning secretary Ernesto Pernia in case tens of thousands OFWs lose their employment in foreign countries and are forced to return home.

A conservative estimate in a “best-case scenario” would be $4.5 billion less remittances sent this year, according to the ACTS-OFW Coalition of Organisations, a joint representative body for Filipinos working abroad.

The amount takes into account $1.5 billion of expected growth in remittances, which would not materialise in the current situation, and an actual drop of $3 billion due to job losses or salary cuts.

“The foreign labour markets for Filipino workers – except for medical professionals and technicians – will shrink considerably this year as the global economy declines,” said ACTS-OFW chairman Aniceto Bertiz.

He noted that OFWs in the shipping, aviation, travel, hotel and restaurant, gaming, oil, gas and energy sectors would likely be hardest hit by the global health crisis.

Oil price collapse adds to the problem

Aggravating the problem is the collapse in oil prices which will ease the demand for Filipino workers additionally in oil-exporting countries in the Middle East as many projects and developments there are expected to be put on hold and a lot of businesses will likely phase down their activities due to a lack of liquidity.

Bertiz said that ACTS-OFW was counting on the government to provide financial aid to OFWs who have lost income under the “no work, no pay policy” of their employers. The Overseas Workers Welfare Administration last week started accepting online applications for 10,000 pesos ($197) cash aid for Filipino workers abroad.

More than two million Filipinos head abroad for work each year, most as labourers or service and sales staff, while the country also supplies a quarter of the world’s merchant marine workforce.

In terms of remittances, the Philippines is the fourth-largest recipient of remittances globally, according to World Bank data. About 75 per cent of that money is spent for essentials like food, education and health care at home.

Remittances from Overseas Philippine Workers, which amounted to $33.5 billion last year, or roughly ten per cent of the country’s GDP, could fall by up to 30 per cent in 2020 as the coronavirus keeps people working abroad out of jobs and causes their salaries shrinking or even evaporating. The 30-per cent drop, which would translate into $10 billion less cash coming in for mostly low-earning Philippine families, is the worst scenario named by economic planning secretary Ernesto Pernia in case tens of thousands OFWs lose their employment in foreign countries and are forced to return home. A conservative estimate...

Remittances from Overseas Philippine Workers, which amounted to $33.5 billion last year, or roughly ten per cent of the country’s GDP, could fall by up to 30 per cent in 2020 as the coronavirus keeps people working abroad out of jobs and causes their salaries shrinking or even evaporating.

The 30-per cent drop, which would translate into $10 billion less cash coming in for mostly low-earning Philippine families, is the worst scenario named by economic planning secretary Ernesto Pernia in case tens of thousands OFWs lose their employment in foreign countries and are forced to return home.

A conservative estimate in a “best-case scenario” would be $4.5 billion less remittances sent this year, according to the ACTS-OFW Coalition of Organisations, a joint representative body for Filipinos working abroad.

The amount takes into account $1.5 billion of expected growth in remittances, which would not materialise in the current situation, and an actual drop of $3 billion due to job losses or salary cuts.

“The foreign labour markets for Filipino workers – except for medical professionals and technicians – will shrink considerably this year as the global economy declines,” said ACTS-OFW chairman Aniceto Bertiz.

He noted that OFWs in the shipping, aviation, travel, hotel and restaurant, gaming, oil, gas and energy sectors would likely be hardest hit by the global health crisis.

Oil price collapse adds to the problem

Aggravating the problem is the collapse in oil prices which will ease the demand for Filipino workers additionally in oil-exporting countries in the Middle East as many projects and developments there are expected to be put on hold and a lot of businesses will likely phase down their activities due to a lack of liquidity.

Bertiz said that ACTS-OFW was counting on the government to provide financial aid to OFWs who have lost income under the “no work, no pay policy” of their employers. The Overseas Workers Welfare Administration last week started accepting online applications for 10,000 pesos ($197) cash aid for Filipino workers abroad.

More than two million Filipinos head abroad for work each year, most as labourers or service and sales staff, while the country also supplies a quarter of the world’s merchant marine workforce.

In terms of remittances, the Philippines is the fourth-largest recipient of remittances globally, according to World Bank data. About 75 per cent of that money is spent for essentials like food, education and health care at home.

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