There has been an increase in the deployment of OFWs, according to Dennis Lapid, officer-in-charge of the Department of Economic Research.
The World Bank (WB) predicted that remittance flows to the Philippines will increase by 3.6% this year, but that growth would decrease in 2023 due to the likelihood that overseas Filipino workers (OFWs) would be less able to send more money home as the global economy slowed down.
Felipe M. Medalla, the governor of the Bangko Sentral ng Pilipinas, on the other hand, stated that he anticipates OFW remittances “to be 4% to 5% higher (in 2022) than last year.” In its most recent Migration and Development Brief, the multilateral lender predicted that this year’s remittance inflows to the Philippines would increase by 3.6% to $38 billion.
Remittance growth predictions made by the World Bank and BSP are less rapid than the 5.1% annual rise anticipated in 2021.
The World Bank stated that the increase in remittances “reflected the advantages of bilateral agreements that the Filipino government recently struck with destination nations (particularly Saudi Arabia) to improve the treatment of Filipino workers.”
In November, the Philippines removed the restriction on the transfer of OFWs to Saudi Arabia. Due to accusations of alleged mistreatment of OFWs by Saudi employers, the restriction was implemented in 2021.
The demand for competent Filipino employees in the health and hospitality industries, according to the World Bank, also increased remittances.
“With nearly 40–60% of their emigrants working in the United States and the United Kingdom, the Philippines and Vietnam benefited from the minimum wage increases and increasing unemployment in these countries, even as the pandemic-related stimulus incentives were phased out and record-high inflation eroded their ability to remit,” it said.
Remittances to low- and middle-income countries increased by an expected 5% to $626 billion this year, slower than the 10.2% increase in 2021, according to the World Bank. The Philippines is anticipated to receive remittances in the amount of $41 billion this year, trailing only China ($51 billion), Mexico ($60 billion), and India ($100 billion).
According to the World Bank, India is the first nation on track to receive remittances totaling more than $100 billion annually. According to projections, remittances to East Asia will have increased 0.7% to $134 billion in 2022, reversing a two-year fall. Remittances to the region likely increased 3.7% when China is excluded.
“Migrants support their families through remittances while assisting in loosening up the tight labor markets in their host nations.
Workers have been aided in navigating the financial and job challenges brought on by the COVID-19 (coronavirus illness 2019) epidemic through inclusive social protection policies. Such policies must be maintained since they have an impact on the entire world through remittances, according to Michal Rutkowski, the World Bank’s global director for social protection and employment.
A SLOWER RISE
Remittances may expand at a slower rate of 2% to $639 billion in 2023, according to the World Bank, as a worldwide slowdown may reduce migrant workers’ salary increases in their host nations.
“Downside risks,” it continued, “include a further escalation in the conflict in Ukraine, unpredictable oil prices and currency exchange rates, and a deeper-than-expected slowdown in major high-income countries.
Inflows of remittances to the Philippines are projected by the World Bank to grow by 2% to $39 billion in 2023.
Remittance inflows to East Asia, particularly the Philippines, will probably be impacted by a slowdown in economic activity and a crisis in the cost of living in the destinations of migrants.
“High-income countries’ real GDP growth is expected to decrease from 2.4% to 1.1%, but inflation will stay high at 4.4%. This will limit East Asian migrants’ ability to send money back home, particularly if job losses take place, it warned.
Lower oil prices, according to the World Bank, could slow the growth of remittances from Middle Eastern countries to East Asian countries. Remittance flows to East Asian nations with lower incomes are “likely to be affected” by slower export demand for manufactured goods from East Asia, it was stated.
Employing migrants from lower-income nations like the Philippines is common in East Asian nations with higher incomes like China, Malaysia, and Thailand that export manufactured goods.
Remittance flows to lower-income nations suffer when the demand for manufactured goods slumps globally and migrants lose their jobs. According to the World Bank, the combined effect of these factors points to a marginally negative (-1%) remittance growth in East Asia in 2023, with inflows totaling $133 billion.
Remittances to East Asia, excluding China, are predicted to increase “sluggishly” or 0.8% to $84 billion from $82.9 billion in 2022.
