USD INR ₹ 84.00
GBP INR ₹ 102.77
CAD INR ₹ 60.61
News

OFW Remittances See An Increase As Travel And Employment Improves

Updated on August 18, 2021 12:00 am
Economy and growth on the Filipino flag

The world we live in today is highly interconnected and interdependent. In a globalized world, moving from one's own country to a different country is an increasingly common phenomenon known as international migration. Migration can happen for many reasons. Many people migrate, mainly from developing countries to developed countries due to economic reasons, because the labor market in the developed countries tends to have better job opportunities.

Labor migration has shown remarkable improvement in the lives of the migrants and their families. Migrants receive higher income in their host countries and they can send part of their income to families left behind in their home countries. The money sent by the migrant workers to their families back home is referred to as remittances.

Remittances not only increase the recipient's household income but also serve as a stable source of external financing especially in middle and low-income countries, often surpassing foreign direct investments and official development assistance.

Remittance inflows to these countries drive domestic consumption of goods and services, increase foreign exchange reserves, lessen international debt burden, promote economic growth, and poverty reduction.

OFWs, Remittances And The Philippine Economy

Migrant workers from the Philippines, also known as Overseas Filipino Workers (OFWs) are regarded as Bagong Bayani (modern-day heroes) for their contributions to the Philippine economy through remittances.

The Philippines is the 4th highest remittance recipient country in the world, only behind India, China, and Mexico, for years in a row as per the World Bank data. Moreover, OFWs tend to send more money to families and loved ones back home during economic hardships or calamities.

https://lh5.googleusercontent.com/u1G5YbFjH03r97YOHVXQ_AlzlRHuCv9dS7Yjab4ddoyCgBfYrBymU8FDK3zgF5-3hR6RUCfPIQCSzaEX4txxhYdPDS9RQ2ixD33jPgl8Ngl83KYh-i_06h3a35Bt_yN6oqzi5O7U

OFWs remittances are one of the largest sources of foreign reserves in the Philippines. By December 2020, the country's gross international reserves (GIR) reached a record high of $109.8 billion according to Bangko Sentral NG Pilipinas (BSP).

BSP data showed that the total remittance in 2020 was $33.2 billion, which represented 9.2% of the country's gross domestic product (GDP). However, there is a discrepancy in the total remittance received. $34.9 billion was the total OFW remittances in 2020, constituting 9.6% of the country's GDP, as per the World Bank data.

MqV_9LtJ7AdPi-F8Jxi1DWnXnb4UO7wpyOBLOAyxZE0N7uj0GUDDeI7JCn87QmtVoti0xxeEPiRvGbz5VrnJSba7_D0o0TLvUEXI0kk7uLSpxCGBjAmZ68sBSrDRJ-UJyGnSbuA

The country also exports the highest labor to countries like the United States (U.S.), the United Kingdom (U.K.), Canada, Saudi Arabia, Hong Kong, Singapore, and more. Official government data suggest that there are 2.2 million OFWs, both land-based and sea-based workers.

An estimated 700,000 Filipino seamen are deployed in national and international sea vessels. Around 380,000 Filipino seafarers account for one-fourth of all global merchant shipping crews and one-third of the total staff of global cruise ships are Filipinos.

Many OFWs are also in the healthcare sector as frontline workers in the U.S., Europe, Canada, or working in hospitality, domestic help services, logistics, constructions, or oil sector in the middle east. The total number of overseas Filipinos in the world is estimated to be above 12 million. The remittances sent by these huge OFWs population make the country one of the highest remittance-receiving countries.



Remittance Stayed Resilient During COVID-19 Pandemic

COVID-19 was a devastating blow to the global economy with mass layoffs worldwide, massive repatriations, lockdowns, and sky-rocketing unemployment rates. The economic crisis induced by the pandemic was predicted to reduce the overall global remittances.

A sharp decline of 20% in remittances in 2020 was projected by the World Bank, mainly due to the fall in wages and job losses of migrant workers who are the first to hit during such a crisis.

However, the global remittances proved resilient despite the projected decline during the pandemic and fell by only 2.4%, from $719 billion in 2019 to $702 billion in 2020.

The repatriation of over 400,000 OFWs workers during the pandemic was concerning and the Philippine central bank projected initially a 5% decline in remittance which was later revised to a 2% contraction. But the actual decline is lower than the contraction of 2%.

The BSP data showed that the total 2020 personal remittances from OFWs amounted to $33.1 billion, only 0.8% lower than the $33.5 billion received in 2019. Cash remittances in 2020 from OFWs also dropped 0.8% to $29.9 billion from $30.1 billion in 2019, defying gloomy expectations by economists.

6kGF8Z17Q6OkmwD7urCUMjljQIhlpIzYyiTnsc-3ubOuKcP_FuzTLG_wdsQvMN7-Us0YZEkvxKBVypj2UgqNPOPpqJsKkr2jx-XXyz8ZWs1-RdICzsVRRRVraLiEzA4Wm4P9e5M

Cash remittances from Saudi Arabia, Japan, the UK, Germany, the United Arab Emirates (UAE), and Kuwait declined, while those sent from the U.S., Singapore, Canada, Hong Kong, Qatar, South Korea, and Taiwan increased. The U.S. had the highest share of the total remittance at 39.9%, followed by Saudi Arabia, Japan, the UK, the UAE, Canada, Hong Kong, Qatar, and South Korea, which made up a combined remittance of 78.6% of the total receipts.

XLYLzkaiLZtsR8qGNnDBFz4Z9n9otFMBLa2FAPIiYdB2QTT_RLRcnKIAE0jsyQL6D1oAuDNDwrCDlPnX5mk2odIJZRSnKYTYdQPIIIQnR9qSrZnMNiLgy2NCVQobopA_6xqELck

OFWs Remittances 2021

OFWs remittances for the first four months of 2021 reached $11 billion, 5.1% higher than the $10.49 billion received in the same period in 2020 and a little higher than the $10.8 billion recorded in the first four months of 2019 or pre-pandemic level according to the BSP.

Personal remittances rose to $2.57 billion in April 2021 alone, an increase of 13.1% from the $2.276 billion recorded in April 2020 as lockdowns eased globally, marking the growth for the third consecutive month in 2021.

Cash remittances from OFWs through banks reached $2.3 billion in April 2021, 12.7% higher than the previous year. The year-to-date basis showed a 4.8% increase ($9.89 billion) in cash remittances for January to April 2021.

OFWs remittances reached double-digit growth in May 2021. The central bank data showed 13.1% growth ($2.382 billion) in money transfers through banks from $2.106 billion in May 2020. This increase has been attributed to a 16.2% and 2.7% increase in remittances from land-based workers (from $1.631 billion to $1.84 billion) and sea-based workers (from $475 million to $488 million).

Cash remittances also grew to $12.28 billion, 6.3% higher than $11.554 billion from the previous year. The growth in cash remittances from January to May 2021 largely came from the U.S., Malaysia, South Korea, Singapore, and Canada.

TV_2aC7ObKUvo0fM5nWem1FIU36dqiUJcjo-Dz1N4F8EWrjPXb0aQya3RA2MOMx4KfbVtWX-VyAmvrntPglyu6MDyC6uL2Oe9lRNuT3cIZh0kJB9yJv7qlonOYWE2lONJ6BHQIg

Way Forward

As more economies continue to reopen, travel restrictions are eased, and more jobs are coming back, remittances will recover, further aided by the rollout of COVID-19 vaccinations worldwide.

Even though over 400,000 OFWs have been repatriated since the pandemic started, the demand for OFWs in various sectors abroad remains strong. 

The ongoing vaccination rollouts will further enhance the job prospects for overseas Filipinos in the coming months. Filipinos workers will continue to seek jobs overseas as the global economy recovers. The BSP projects a 4% growth in remittances in 2021.

 13574 views
Rate article:
(5.0)
 
 
Money Transfer FAQ's
Related News
Father son reunion
How To Find A Travel Insurance Policy That Covers Covid-19?

Going into 2024, we learned many lessons from COVID. While borders have reopened and life has gone back to practically how it was before, the desire to reconnect with loved ones and explore new destinations grows stronger. However, amidst the excitement of travel, it's crucial not to overlook the importance of securing adequate travel insurance, especially in the context of COVID-19. In this comprehensive guide, we'll explore the significance of travel insurance, highlight key considerations for finding policies that cover COVID-19, and provide actionable tips for selecting the right coverage to suit your needs.   The Importance of Travel Insurance in the Post-COVID-19 EraDespite the easing of travel restrictions and the gradual return to normalcy, the lessons learned during the COVID-19 pandemic have highlighted the necessity of travel insurance. While the threat of the virus may be diminishing, unexpected medical emergencies, trip cancellations, and disruptions remain a strong possibility. Travel insurance serves as a safety net, offering financial protection and peace of mind for travelers facing unforeseen circumstances, including those related to COVID-19.Understanding COVID-19 Coverage OptionsIn response to the pandemic, many travel insurance providers have adapted their policies to include coverage for COVID-19-related risks.There are two types of travel insurance you can opt for when looking for travel insurance, both covering different situations: travel medical insurance and trip insurance.  Travel Insurance: Provides comprehensive coverage for a range of travel-related emergencies, including medical expenses such as for hospitalization or medication for new injuries or illnesses that occur during one’s travels. It also typically includes benefits such as emergency medical evacuation and lost luggage reimbursement.In response to the pandemic, many travel insurance providers have modified their policies to address COVID-19-related risks. That is why some travel medical policies now include coverage of medical treatment expenses incurred due to COVID-19 during travel (if COVID was contracted during travel). Trip Insurance: Focuses specifically on protecting the financial investment made in a single trip. It typically covers expenses such as trip cancellations, interruptions, or delays, offering reimbursement for non-refundable expenses in case of unforeseen events.Similar to travel medical insurance policies, in response to the pandemic, many trip insurance providers have modified their policies to address COVID-19-related risks.  That is why some trip insurance policies now include coverage for cancellations or interruptions due to contracting COVID-19 prior to travel.Additionally, some policies offer "Cancel For Any Reason" (CFAR) coverage, providing flexibility for travelers to cancel their trip for any reason, albeit with eligibility requirements and time-sensitive limitations.There is no one-size-fits-all when it comes to Travel Insurance: some people travel regularly for work, some work for months and years to save up for a single trip, and some may have to travel urgently for a family emergency.Traditionally most travel insurance policies and plans cover expenses on account of medical emergencies, trip cancellation, interruption or delays, medical evacuation, and lost, damaged, or stolen luggage. However, given the current times, you must look for specific policies covering COVID19.Finding the Best Travel Insurance for COVID-19When selecting a travel insurance policy that covers COVID-19, here are some key features to look for in your travel insurance plan:Comprehensive Coverage: Look for policies that offer comprehensive coverage for COVID-19-related expenses, including medical treatment, quarantine accommodation, and trip interruption or cancellation due to the virus.COVID-19 Testing Coverage: Verify whether the policy includes coverage for COVID-19 testing required for travel purposes. Some insurers may cover the cost of testing as part of their COVID-19-related benefits.Quarantine Expenses: Ensure that the policy provides coverage for quarantine-related expenses, such as accommodation and meals, in the event that you're required to quarantine while traveling due to COVID-19 exposure.Trip Cancellation/Interruption: Opt for policies that offer robust coverage for trip cancellation or interruption caused by COVID-19-related issues, such as illness or travel advisories.Emergency Medical Coverage: Verify that the policy provides adequate coverage for emergency medical expenses related to COVID-19, including hospitalization, doctor visits, and medication.Pre-Existing Conditions: If you have pre-existing medical conditions, most comprehensive coverage plans will not include pre-existing medical conditions, but there are still some that do. Read up on whether or not the policy covers COVID-19 treatment for these conditions, as some insurers may have specific exclusions.Finding the Right Travel Insurance PolicyNavigating the plethora of travel insurance options can be overwhelming, but utilizing online travel insurance marketplaces simplifies the process. Platforms like VisitorsCoverage empower travelers to compare different policies, generate quotes, and access award-winning customer service representatives for assistance. By leveraging these resources, travelers can confidently select a policy tailored to their needs and providing comprehensive coverage for COVID-19-related risks.As travel has resumed in full swing, it is easy to feel like you don’t need to worry about COVID-19 anymore, but it is always good to prioritize your safety and financial protection. COVID-19 may have reshaped the travel landscape, but with the right travel insurance policy, travelers can navigate uncertainties with confidence. Whether embarking on a leisurely vacation, business trip, or family visit, investing in travel insurance offers peace of mind and ensures preparedness for any travel-related emergencies, pandemic or otherwise. Safe travels!

mexican peso
Mexico Achieves Record-Breaking Remittances of $5.7 Billion in May 2023

According to recent data released by the central bank, Mexico received an impressive sum of nearly $5.7 billion in remittances during the month of May, setting a new monthly record. However, analysts caution that the strength of the peso against the dollar may have mitigated this achievement.Since the majority of remittances to Mexico originate from the United States, the value is recorded in dollars. Goldman Sachs analyst Alberto Ramos explains that "a strong peso hurts remittances," referring to the fact that the appreciation of the Mexican currency has an adverse effect on the funds received when converted from dollars to pesos.Interestingly, the peso has emerged as one of the top-performing currencies this year, appreciating over 13% against the U.S. dollar between May 2022 and May of this year.Due to the peso's appreciation, when measured in local currency, remittances actually experienced a 2.2% decline compared to the previous year, as stated by Ramos.Mexican President Andres Manuel Lopez Obrador has consistently highlighted the positive impact of remittances on the country's economy. The funds, primarily originating from the United States, have played a significant role in Mexico's economic growth.In 2022, Mexico recorded a record high of $58.5 billion in remittances from abroad, making it the second-largest recipient country, trailing only behind India.Despite the challenges posed by the "super peso," the dollar value of remittances sent in May increased by nearly 11% compared to the previous year.The latest data for May reveals a substantial jump of almost 14% compared to the previous month, resulting in a total inflow of funds reaching $24.67 billion this year.Notably, this amount surpasses the combined revenue generated by oil and agricultural exports during the same period, as noted by analysts at Mexican brokerage Monex.Analysts at Monex and BBVA attribute part of the May surge to the celebration of Mother's Day, suggesting that around 10% of the increased transactions can be attributed to this commemoration.The number of transactions in May experienced a 7% year-on-year increase, reaching a total of 14.56 million. Furthermore, the average amount per transaction rose by 3% to $391.Goldman Sachs' Ramos emphasizes that the strength of remittances reflects the robust U.S. labor market and visible wage growth, particularly in sectors where Mexican citizens are prominently represented.To compare today's best rates when remitting money to Mexico, use CompareRemit's easy-to-use USD to MXN exchange rate comparison tool!

online money transfer mobile application
Taptap Send and CompareRemit Form Strategic Partnership

New York, 27/05/2023 – Taptap Send, the innovative mobile money transfer application, is proud to announce its partnership with leading remittance solution provider CompareRemit.com. With a focus on empowering immigrants, Taptap Send simplifies the process of sending money back home to India, Pakistan, Philippines, Bangladesh, Sri Lanka, and Nepal.Sending money across borders has long been a complex and expensive endeavor for immigrants supporting their families and loved ones. Taptap Send was developed to address these challenges, providing a user-friendly mobile application that streamlines and optimizes the money transfer process, all through the convenience of a smartphone.Taptap Send offers a range of features designed to enhance the experience for immigrants sending funds back home:Competitive Rates and No Transfer Fees: Taptap Send leverages technology to streamline operations, resulting in more affordable transfers compared to traditional methods.Mobile Accessibility: The Taptap Send mobile application ensures users can initiate money transfers anytime, anywhere.Transparent Pricing: Users are provided with upfront information on exchange rates, allowing them to make informed decisions and have a clear understanding of the total cost of the transfer.Taptap Send aims to break down the barriers faced by immigrants when sending money back home, enabling them to provide vital support to their families and communities with ease and efficiency.Through its partnership with CompareRemit.com, Taptap Send further expands its reach and impact, offering immigrants a comprehensive range of remittance solutions tailored to their specific needs and requirements.To learn more about Taptap Send and explore the various money transfer options available for sending funds to India, Pakistan, Philippines, Bangladesh, Sri Lanka, and Nepal, please visit the Taptap Send website.About Taptap Send:Taptap Send is a mobile money transfer service that simplifies and enhances the process of sending funds internationally. Designed with immigrants in mind, Taptap Send offers a user-friendly mobile application that empowers users to initiate money transfers conveniently and affordably, providing vital support to their families and loved ones across borders.Media Contact:Name: Anthony JacobTitle: Head of Growth, South AsiaEmail: [email protected]

Download the CompareRemit App
Download the CompareRemit App
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.

Get Listed or Advertise

Download Our Free App

Try our faster, enhanced mobile app for a better experience

CompareRemit App