Overseas Filipinos continue to find ways to send holiday remittances to their loved ones back home despite challenges of the COVID-19 pandemic, according to leading global digital payments provider WorldRemit. December is generally a peak time for remittances to the Philippines from Overseas Filipino Workers (OFWs), and despite the disruption in economies everywhere, this trend is set to continue this year.
“Remittances to the Philippines are expected to have an uptick even as the COVID-19 pandemic continues, and in the aftermath of Typhoons Rolly and Ulysses. The resilience of holiday remittances to the Philippines this year can be attributed to the easing of lockdown restrictions in many countries allowing return to work for most OFWs. As well as availability of financial aid from governments in other nations,” said Earl Melivo, the Philippines country director of WorldRemit.
Inward remittances to the Philippines usually follow the academic calendar as historical highs reflect payments behaviors on education-related expenses. Christmas also has always been the peak period for Overseas Filipino remittances.
“Based on industry numbers and our experience, inward remittances to the Philippines typically increase by more than 20% from November to December,” added Melivo, an economist by training.
According to a recent WorldRemit survey of 3,167 participants in the UK, the US, Canada, and Australia, 84% of those who have previously sent money to the Philippines are planning to send more money or about the usual amount to the Philippines for Christmas holiday remittances this year. The key reasons being: 53% of respondents want to help family/friends back home who have been financially impacted by the pandemic, 37% want to make up for not being there in person this year, and 34% want to take advantage of the low exchange rate.
Data from the Bangko Sentral ng Pilipinas (BSP) show that international cash remittances to the Philippines come from around 223 countries. The top 10 which make up 78% of volume are the US, the KSA, UAE, Singapore, the UK, Japan, Taiwan, Canada, Hong Kong, and Qatar.
With the onset of the pandemic, the Middle East has been the most affected send region to the Philippines followed by the Seafaring industry—both registering double-digit declines within Q2 2020. Melivo notes, however, that these are offset by increasing remittance volumes from the US, Canada, Singapore, Hong Kong, and Taiwan.
“This is where the role of digital players like WorldRemit prove crucial as we help ensure a continued flow of remittances from migrant workers, despite lockdowns in host countries,” explained Melivo.
While earlier industry projections see big percentage declines for inward remittances to the Philippines, WorldRemit says recent trends show that it will remain resilient. “We are seeing that 2020 will end with almost the same level as last year’s total with an approximate decline of 1 or 2% with an optimistic projection of even being above by 1 or 2%. As of September 2020, the decline is only at 1.4% — Christmas is looking optimistic, and we are foreseeing a peak at this time,” said Melivo.
Though the outlook for holiday remittances to the Philippines is looking up, the events of 2020 have reinforced the importance of fast, convenient, secure, and reliable financial services.
“The pandemic has definitely underscored the need to prioritize financial inclusion. The long lockdowns, while good for the health and safety of Filipinos across the globe, have limited mobility. Hence, sending and even claiming remittances were physically challenging for many,” said Melivo.
“With the impact of the pandemic on economic opportunities globally, it’s imperative for digital financial services like WorldRemit to be accessible to both senders and receivers. WorldRemit continues to invest in technology and develop on our expanding network to ensure that OFWs and their recipients back home can have uninterrupted and even better access to needed financial services,” added Melivo.