The remittances of Overseas Filipino Workers or OFWs are projected to increase this year by as much as 7%.
The projection comes amid the downward trend of remittances globally according to financial giant Morgan Stanley.
In a Feb. 22 report titled “Why remittances will be better than expected,” Morgan Stanley Research said the revert to growth in 2021 would help in the country’s economic recovery, support the Philippine peso, and even the banking, consumer, and property sectors.
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In 2020, cash sent back home by Filipinos working and living abroad reached $29.9 billion in 2020, only 0.8-percent lower than the record $30.1 billion in 2019.
“For some OFWs, access to social assistance offered by host-economies likely helped, while OFWs in Asia were likely less affected by lockdown restrictions. Moreover, altruistic motives and border closures likely led OFWs to remit more money home through formal channels. Finally, a sizable portion of OFWs are working as domestic helpers/health-care workers who remain in demand amid the pandemic, which helps to provide downside protection,” Morgan Stanley said.
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The financial firm said that the 2021 projection looks better for the remittance sector.
“To the extent that remittances correlate with global cycles, we think the V-shape global recovery will help drive Philippines’ remittance growth to rebound,” it said.
“Moreover, the oil price recovery bodes well for remittances from the Middle East to see a bounce back. Meanwhile, as vaccination programs get ramped up, more business sectors are likely to reopen and border restrictions on migrant workers, including OFWs, are likely to be relaxed, leading OFW deployment to pick up,” Morgan Stanley added. (TDT)
