MANILA -- Cash remittances from Filipinos working overseas dropped 0.8% to $29.9 billion last year, defying expectations of a sharper fall due to the pandemic, the country's central bank said on Monday.
However, the repatriation of over 400,000 workers amid the raging global health crisis has raised concerns of whether the remittance inflows -- a lifeline to a Philippine economy that shrank by a record 9.5% last year -- can sustain their strength.
The marginal drop beat forecasts, including by the Asian Development Bank, which in August projected a fall of up to 20.2%. The Philippine central bank initially projected a 5% decline, before tempering it to a 2% contraction.
Remittances from the U.S., which comprised nearly 40% of the total, as well as from Singapore, Canada, Hong Kong, Qatar, South Korea and Taiwan grew while those from Saudi Arabia, Japan, the U.K., United Arab Emirates, Germany and Kuwait dropped, according to the central bank.
Filipino overseas workers, analysts have said, tend to send more money back home during times of economic hardship or calamity. But the strong Philippine peso may have prompted workers to send more dollars, said Alvin Ang, an economics professor at the Ateneo De Manila University. "They are sending money in local equivalent value."
Migrants coming home for good may have also given the remittance data a boost. "They are bringing back their savings," Ang said.
The government has repatriated over 400,000 migrant workers, including those who lost jobs in the retail, oil, tourism and other industries. Meanwhile, worker deployment from January to October plunged 60.8%, to 693,687, according to the Philippine Overseas Employment Administration.
"So, the sustainability is a question," Ang said.
The Philippines, Asia's third largest recipient of remittances after India and China, has relied on money sent home by around 10 million Filipinos who live and work overseas. Armies of Filipino nurses, seafarers, nannies, hotel staff and construction workers help power the Southeast Asian nation's economy through their remittances, which represents around 9% of the country's gross domestic product.
"[But] for all the heroics displayed by our modern-day heroes," ING Bank Manila senior economist Nicholas Antonio Mapa said, referring to how migrant workers are regarded at home, "we do note the fading punch packed by once very potent foreign exchange flows from abroad."
Mapa said remittances fell 4.8% in peso terms when adjusted for exchange rate movements.
Ang expects Filipino workers to continue seeking jobs overseas when the global economy recovers. But he said companies that have pivoted to digital might need fewer hands. "My worry," Ang said, "is that they won't be needed anymore because the companies survived without them."