By Melissa Luz T. Lopez
REMITTANCES dropped in March to post the steepest fall in 15 years due to lower amounts sent by overseas Filipino workers (OFWs) based in the Middle East, the central bank reported yesterday.
Funds remitted by OFWs totalled $2.36 billion for the month, 9.8% lower than the $2.615 billion received in March 2017, the Bangko Sentral ng Pilipinas (BSP) said. However, the amount is still higher than the $2.267 billion in inflows tallied in February.
The decline in remittances is the steepest seen since a 10.9% drop in April 2003.
The central bank said the plunge in remittances came on the back of a 9.7% year-on-year drop in the amounts sent home by land-based OFWs, as well as a 10.2% decrease from those working at sea.
By country, OFWs working in Saudi Arabia, United Arab Emirates, Qatar and the United States remitted fewer funds compared to a year ago.
“[T]he continued repatriation of OFWs from the Middle East countries could have affected the inflows of cash remittances,” the BSP said in a statement.
President Rodrigo R. Duterte earlier announced a deployment ban to Kuwait following the discovery of the body of OFW Joanna D. Demafelis stuffed in a freezer in an abandoned apartment back in February.
Filipino migrant workers were ushered back home following reports of abuse. Initial data from the Labor department showed that 1,124 workers were repatriated from Kuwait as of Feb. 8.
Tensions eventually eased and led to the signing of a memorandum of agreement between the Philippines and Kuwait on Friday, with the deployment ban “partially lifted.”
The central bank also cited base effects as a factor behind the plunge in remittances, as March 2017 marked a record high. Inflows surged by 10.7% that month to $2.615 billion, according to BSP data.
March’s decline brought the first-quarter tally to $7.006 billion, only 0.8% higher than the $6.953 billion in remittances booked during the same period in 2017.
This compares to the central bank’s 4% growth forecast this 2018. Remittances are projected to hit around $29 billion, which if realized will be a fresh banner year.
Last year, remittances grew by 4.3% to reach $28.06 billion.
Sought for comment, an analyst said March’s slump is unlikely to continue in the coming months.
“This is more likely temporary because I do expect remittances to be higher in 2Q 2018. The Kuwait debacle’s impact may be minimal at this point because its part in the remittances pie is only about 2.7% in 2017,” said Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines.
“I see the 4% growth target for this year intact.”
Remittances fuel domestic consumption, which in turn supports overall economic growth. The Philippine economy grew by 6.8% during the first quarter, with household spending contributing 3.9% to overall expansion.