The impact of lower OFW deployment this year is slowly revealing. Cash remittances from migrant workers declined 1.4% from January to September, hitting households dependent on these earnings hard, with their consumption down 8.7% in the same nine-month period.
Dismal deployment is also the reason why analysts have remained pessimistic about remittances’ future trajectory despite reclaiming some ground since June. The central bank has believed the altruistic nature of inflows to families they support here would deliver the needed boost onwards, but some think OFWs are simply exhausting their savings.
Alvin Ang, director of the Ateneo Center for Economic Research and Development, said “consumption (would be) slower” as remittances taper off in coming months. Consumption accounts for 70% of economic output, so further weakness on this front would only derail a rebound from 10% contraction in gross domestic product to date.