Remittances crash in May as OFWs fly home due to pandemic

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Metro Manila (CNN Philippines, August 3) – Remittances slid for the third straight month in May as COVID-19 led to a global economic slump and forced thousands of overseas Filipino workers out of jobs, the Bangko Sentral ng Pilipinas said.

The central bank reported Monday that remittances dropped by 19.2 percent to $2.34 billion (about ₱115 billion) in May, sustaining the meltdown since March just as the pandemic deflated economic activity worldwide. Thousands of overseas Filipino workers, who provide for the needs of their families in the Philippines, lost their jobs and flew home.

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Remittances are a big source of disposable income among Filipino families, as the dollars that workers overseas send support food, daily expenses, and even luxuries of their loved ones in the country. This boosts household spending and supports economic activity, which has slumped due to local lockdowns.

Global travel and employment were badly hit by the coronavirus, resulting in job displacements among migrant workers. This brought the five-month tally of remittance inflows to $12.8 billion (about ₱630 billion), 6.4 percent lower than last year's $13.7-billion (about ₱673 billion) haul. This is also wider than the BSP's expected 5 percent drop in remittances for the full year 2020.

The decline was led by remittances from OFWs holding long-term contracts, who sent home 21.1 percent less than what they did in May 2019. Those under short-term employment arrangements also reported a 12.4 percent drop in the amounts they sent home.

Filipinos based in the United States remained the biggest source of remittances, accounting for nearly 40 percent of the haul. This is followed by those in Singapore, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Canada, Hong Kong, Qatar, and Taiwan.

To date, the Department of Foreign Affairs said it has brought home 115,793 Filipinos and is looking to fetch about 100,000 more nationals from abroad who want to return home.

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At least 9,569 Filipinos abroad have caught COVID-19, with 5,5672 of them recovered while 671 have died as of Sunday, the agency said.