The amount of money repatriated by Filipinos abroad fell last year for the first time since 2001 as the pandemic upended the global job market.
Cash remittances declined by 0.8% to $29.9 billion last year, according to central bank data released Monday.
More than 400,000 overseas Filipino workers have been repatriated since the pandemic started, risking a key source of the country’s foreign exchange and financial support for millions back home.
While the overall slide was less than the central bank’s forecast for a 2% drop, the figure represents a “fading punch packed by once very potent foreign exchange flows from abroad,” said Nicholas Mapa, economist at ING Groep NV in Manila.
The peso has gained 0.2% against the U.S. dollar so far this year and is trading at its strongest level since 2016. That’s eroded the ability of remittances to pay for school fees, mortgages and other expenses, Mapa said.
Funds declined from the U.K., Germany and Japan, as well as Saudi Arabia, United Arab Emirates and Kuwait. They increased from the U.S., Canada, Singapore, Hong Kong, Taiwan, South Korea and Qatar.
“I expect a relatively modest rebound this year,” said Euben Paracuelles, chief Asean economist at Nomura Holdings Inc. in Singapore. “A redeployment of workers who were repatriated home, for instance, might take a while given remaining travel restrictions globally, and local vaccinations could take time.”