MANILA – Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno remains optimistic about the growth of remittances this year despite the repatriation of overseas Filipino workers (OFWs) due to the pandemic.
In a virtual roundtable at Lido Wednesday, Diokno said the slower inflows of remittances last February is understandable given the impact of the pandemic.
He said inflows from Filipino workers overseas posted steady growth for years now, and has been a key growth driver for consumption expenditures.
Diokno added remittance inflows could contract this year because some OFWs lost their jobs due to economic disruptions in host countries, but he discounts the possibility of a contraction, which the World Bank (WB) projects could be 20 percent globally this year and 13 percent for the Asia Pacific.
“It is important to point out that crisis or no crises, Filipinos abroad continue to send remittances to their families at home. It would appear that OFW remittances have an altruistic character. Furthermore, the adverse impact of Covid-19 (coronavirus disease 2019) on remittances may be temporary,” he said.
BSP data show that cash remittances last February grew by 2.5 percent year-on-year to USD5.566 billion over year-ago’s USD2.3 billion.
In the first two months this year, cash remittances went up by 4.6 percent, slower than the 6.6 percent in the previous month, to USD5.006 billion.
Remittances, which accounts for about 9 percent of the economy’s annual output, are targeted to expand by 2 percent this year, a downward revision from the 3-percent target earlier.
Diokno said the impact of the drop of remittance inflows on the economy can be countered by the expected increase of inflows to the business process outsourcing (BPO) sector due to the need for digitalization.
He added that the government’s infrastructure program may be tapped to employ OFWs from the Middle East who are into the construction sector.
Another employment option for workers is the need for contact tracers, which the government will tap to help its Covid-19 response.
Diokno said that while there are sectors that will be hurt by the crisis, opportunities also abound like the need for more medical workers and digitally-knowledgeable individuals.
“The world is really globalizing and, I think, because of our advantage, demographic advantage, we can develop our people,” he said, adding that the median age of Filipinos is 25 years old.
Diokno said most of these people are tech-savvy, which is highly needed around the world.
“Isn’t that nice that the quality of our exports will increase? And we will, as a result, will continue to benefit from overseas Filipino remittances,” he added. (PNA)