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BSP: Drop in remittances to pull down GDP by 0.4%
By JON VIKTOR D. CABUENAS, GMA News The 5% contraction expected in remittances this year will likely pull down economic growth by 0.4%, the Bangko Sentral ng Pilipinas (BSP) said Thursday.
Citing latest estimates available, BSP Governor Benjamin Diokno said the expected increase in jobless Filipinos overseas will have an impact on remittances, which will, in turn, affect economic growth.
"As you know, we downgraded our forecast from 3% growth (of remittances) before the pandemic to 2% sometime in March, but the latest adjustment that we did was we adjusted it from 2% to -5%," he said.
"Now the impact of that on the economy -- this is a rough computation -- is that it will slow down the GDP by about 0.4%," added Diokno.
According to the latest data available from the central bank, remittances fell to a four-month low in March -- personal remittances down to $2.652 billion, and cash remittances down to $2.397 billion.
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Diokno noted that the estimates took into consideration the increase in unemployed overseas Filipinos, majority of whom sea-based.
"The 5% contraction in overseas Filipinos' remittances for 2020 was mainly based on the large repatriation of workers and economic disruptions in host countries," he said.
Among those cited by Diokno are job losses in the tourism and tourism-related industries, as well as oil production and transportation.
"There's a lot of uncertainty in making projections, so depending on how soon or how late the recovery is in those countries, that could have an additional impact on the reduction in overseas Filipinos' remittances," he said.
"Let me assure you that the BSP continues to monitor new information and emerging developments that may directly affect the welfare of our Filipinos abroad," added Diokno.—AOL, GMA News