Residents of the Philippines rely heavily on remittances from abroad, including countries like the Cayman Islands, but because of the global pandemic, many have seen that invaluable income decline.
There has been a drastic downturn in the remittances of overseas Filipino workers (OFWs), long a lifeline of the Philippine economy but which have been battered by the worldwide pandemic as tens of thousands of OFWs have lost their jobs and are streaming home.
Since March, OFW remittances contracted. In March, the inflows declined by 5.2 percent year-on-year to $2.65 billion. That’s because of widespread labour cutbacks in the oil industry in the Middle East following the collapse in crude prices.
In April, remittances fell sharply by 16.1 percent to $2.28 billion, because of the layoffs of OFWs in countries heavily affected by the pandemic and the temporary closure during the lockdown of some banks that provide money transfer services. In May, the decline worsened to 19.2 percent to $2.34 billion, as global economic activity, especially travel and employment, reeled from the pandemic, resulting in massive job losses or the deferred hiring of many OFWs.
An uptick was recorded in June, but that was not sustained. The global economic recession is expected to linger as countries struggle to contain the pandemic. Like the Philippines, many other nations both developing and advanced are suffering unprecedented economic declines. Japan, for instance, reported a 27.8 percent contraction in the second quarter. The US economy shrank by 32.9 percent.