Remittance prospects seen positive despite Delta variant

By Luz Wendy T. Noble, Reporter

THE REMITTANCE industry’s outlook is positive as vaccination programs gain traction in major economies that are key worker destinations, despite the threat of the coronavirus Delta variant, a remittance industry executive said.

“Because of the vaccine, my view is that it lessens the danger of us as a whole going back to those early stages of the pandemic wherein everybody is closed. I don’t think that will happen. Although there are variants, we will not be in the position (we were in) in March 2020,” UniTeller Philippines President Noel C. Cristal said in an online interview.

Cash remittances increased 7% year on year to $2.638 billion in June, according to the Bangko Sentral ng Pilipinas (BSP). Inflows in the first half of the year rose 6.4% to $14.918 billion.

Cash remittances slipped 0.8% to $29.903 billion in 2020. The 2019 total of $30.133 billion had been a record.

Inflows from the US, the biggest remittance source, have been boosted by Washington’s massive stimulus support programs, Mr. Cristal said.

“The government extended support programs, and of course, Filipinos are always for family. When they get some money, their priority is really to send support to their families back home,” he said, noting that the US is Uniteller’s main market.

Remittances fuel household spending, which makes up about 70% of the Philippine economy.

The BSP estimates that inflows from the US increased 7.5% to $5.982 billion in the first half.

Singapore has displaced Saudi Arabia as the second biggest remittance source for the Philippines. In the first six months inflows from Singapore hit $1.035 billion, compared to the $832.614 million from Saudi Arabia.

This development reflects the extra weight of Filipino workers’ earnings in Singapore, Mr. Cristal said, noting that Filipinos in Singapore include a large contingent of professionals, while those in Saudi Arabia are mainly in construction and services, which took a hit from the pandemic.

“Also, Singapore has controlled the pandemic more favorably than others,” he said.

But Mr. Cristal is bullish that inflows from Saudi Arabia will gradually recover. Remittances from that country rose 1.6% from the first six months of 2020.

The BSP expects remittances to rebound this year, posting growth of 4%.

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