By Luz Wendy T. Noble, Reporter
Remittance inflows declined in March, as the coronavirus outbreak accelerated and tensions among global oil producers escalated.
Cash remittances of overseas Filipino workers (OFWs) that were coursed through banks dropped by 4.7% to $2.397 billion in March from the $2.514 billion a year ago, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The 4.7% decrease in cash remittances is the first contraction since the -2.9% in June 2019 and the highest drop since the -9.8% in March 2018, when inflation skyrocketed and the peso reached the P52 level versus the dollar.
“The countries that registered the declines in cash remittances in March were mostly from oil producing countries (Saudi Arabia, United Arab Emirates and Kuwait) where demand for workers was affected by depressed oil prices in the world market,” the BSP said Thursday night.
For the first quarter of 2020, inflows grew by 1.4% to $7.403 billion from the $7.299 billion in the comparable year-ago period.
The central bank on Thursday released its latest projection which estimates cash remittances to decline by 5% this year, a reversal from the 2% growth forecast in May and the baseline 3% estimate back in November. The World Bank estimates a 20% drop in global remittances as the pandemic continues.
Personal remittances slumped 5.2% to $2.652 billion in February from the $2.557 billion during the same month in 2019. This is the first decline in personal remittances since June 2019 and the 9.9% contraction in March 2018.
According to the BSP, personal remittances from land-based workers with work contracts of one year or more slipped by 6.7% to $2.014 billion in March coming from the $2.157 billion recorded last year. On the other hand, remittances from sea-based workers and land-based workers with work contracts of less than one year rose by 2.7% to $591 million from $575 million in March 2019.
Year-to-date, personal remittances rose by 1.5% to $8.218 billion in March from the $8.098 billion last year.
Economists said the virus took its toll on remittances in March, adding to tensions in the oil market.
“The decline in March remittance inflows can be attributed to the oil price collapse due to the disagreement between Russia and Saudi Arabia. Biggest hit by this oil price shock are Filipino workers from the Middle East that comprise more than 50% of total overseas workers,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.
In March, Saudi Arabia slashed oil prices by nearly 10% in retaliation against Russia for not joining the large production cuts made by the Organization of the Petroleum Exporting Countries in response to waning demand.
Mr. Asuncion said the sea-based luxury travel industry as well as the land-based hotel and…