ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Economy

Remittances track 25% lower in blow to emerging economies

Philippines among nations hit hard by virus-related job losses abroad

Some 10 million Filipinos, or a tenth of the population, work in the U.S. or elsewhere.   © Reuters

MANILA/MEXICO CITY -- Remittances to emerging nations are projected to fall 25% this year as laborers abroad lose work to the pandemic, slamming their economies.

"I have to survive on rations of rice and canned food," a 54-year-old Manila resident said. His eldest son, working in construction in Saudi Arabia, used to send him about 10,000 pesos ($200) a month to cover food expenses. But the remittances have almost completely stopped.

The impact of the new coronavirus reaches beyond countries were cases are growing, amid city lockdowns and other steps to control its spread. Many of the laborers from emerging nations work in food service, retailing and tourism in the U.S., Europe and the Middle East, where those industries have been restricted because of COVID-19.

Remittances to emerging nations, excluding China, will plunge 24.9% to $223 billion in 2020, according to a June forecast from the U.S.-based Institute of International Finance. After growing 4.6% to a record $297 billion in 2019, the figure is projected to fall much more sharply than the 5.9% drop of 2009 on the heels of the global financial crisis.

In such countries as El Salvador and Honduras, remittances account for roughly 20% of gross domestic product. The share exceeds 10% in Lebanon and Egypt. These money transfers not only support laborers' families back home, but also prop up the originating countries' economies.

The Philippines has also traditionally been a source of migrant labor, owing to a lack of work offering decent pay back home. Some 10 million Filipinos, or a tenth of the population, work in the U.S. or elsewhere. But the coronavirus has radically altered the landscape. Labor and Employment Secretary Silvestre Bello said in June that 400,000 migrant workers have lost their jobs.

Remittances to the Philippines fell 16.2% on the year to $2.05 billion in April, with nearly 80,000 people having returned home after losing jobs abroad. The central bank sees remittances declining 5% from the $30.1 billion of 2019, pushing down GDP growth by 0.4 percentage point.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media