Money sent home by Filipinos working overseas sank 19.3 percent in May from a year ago, the biggest contraction in almost two decades amid the COVID-19 pandemic that caused job losses in many countries.
The Bangko Sentral ng Pilipinas said remittances coursed through banks dropped to $2.106 billion in May from $2.609 billion a year ago. This was more steep than the 16.2-percent slump in April and 4.7-percent decline in March.
Data showed that this was the largest decline since the 33.5-percent contraction in January 2001.
Cash remittances in the first five months also went down by 6.4 percent to $11.554 billion from $12.349 billion in the same period last year.
“The decline in cash remittances was due to the negative effects of the continued limited operating hours of some banks and institutions that provide money transfer services during the lockdown and the repatriation of many OFWs in March 2020,” the BSP said in a statement.
The BSP said remittances of both land-based and sea-based workers fell by 7.2 percent to $8.965 billion from $9.664 billion, and 3.6 percent to $2.589 billion from $2.684 billion, respectively.
Personal remittances, which include non-cash items, also fell by 19.2 percent in May to $2.341 billion from $2.896 billion a year earlier, the third successive drop this year, bringing the year-to-date tally to $12.835 billion, down 6.4 percent from $13.707 billion a year ago.
Personal remittances from land-based workers with work contracts of one year or more declined 21.1 percent to $1.77 billion in May from $2.244 billion in May 2019.
Remittances from sea-based workers and land-based workers with work contracts of less than one year fell by 12.4 percent to $519 million in May 2020 from 592 million a year ago.
ING Bank said in an earlier report that remittances would likely decline by 6.9 percent this year, the first contraction in the past 19 years, on the impact of the COVID-19 pandemic to the employment of Filipino workers abroad.
ING said job prospects for OFWS remained bleak even after lockdowns were lifted as the majority of them were employed in sectors that were expected to struggle in a world of social distancing.
Based on a survey conducted for registered OFWs, 37.6 percent were employed in the so-called “elementary occupations,” that include domestic helpers and hotel/restaurant cleaning staff while 18 percent worked in services and sales sectors.
“This suggests that OFWs may continue to struggle to find employment as sectors such as hotels and restaurants may struggle to recover quickly due to social distancing, leading to less remittance flows from OFWs based in these professions” the bank said.
“Given these dire prospects, we now expect OFW remittances to fall by up to 6.9 percent in 2020, the first contraction since 2001,” the bank said.