Philippines Remittances December 2020

Philippines

Philippines: Remittances drop for the first time in four months in December

February 14, 2021

Remittances totaled USD 2.9 billion in December, representing a 0.4% year-on-year decline and contrasting November’s 0.3% year-on-year expansion. On a cumulative basis up to December, remittances summed USD 29.9 billion, remaining stable from November. All-in-all, remittances in 2020 were down 0.8%, marking the first decline since 2001. That said, 2020’s reading was still above the Central Bank’s forecast of a 2.0% slide.

Remittances, which accounted for roughly 9% of GDP in 2020, are an important source of income for many Filipino families and a key driver of private consumption.

Prakash Sakpal, senior economist Asia, at ING noted:

“Bangko Sentral ng Pilipinas (BSP) is expecting remittance flows to grow by 4% but with more than 430,000 former Overseas Filipinos (OFs) repatriated after job losses in their host countries, we forecast remittances to be flat in 2021.”

Private consumption is seen expanding 6.1% in 2021, which is up 0.3 percentage points from last month’s forecast. In 2022, household spending is seen growing 6.4%.


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Philippines Remittances December 20 20 1

Note: Monthly OFW remittances in USD billion and annual variation in %.
Source: Central Bank of the Philippines (BSP).


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