OFW remittances to catch a cold as coronavirus-hit countries sneeze
MANILA, Philippines — Money sent home by overseas Filipino workers could take a hit from the coronavirus disease (COVID-19) as weaker economic activity in China and other affected countries is expected to have spill-over effects into the Philippine economy, analysts at ANZ Research said Thursday.
The coronavirus disease that emerged in China has killed over 1,300 people. There are two reported deaths outside the mainland: one in the Philippines and the other in Hong Kong.
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In a report sent to reporters, ANZ Research said that based on their estimate, a 50-percent decline in remittances from China, Hong Kong and Taiwan and a 20-percent plunge from the rest of Asia could shave off 0.11 percentage points of Philippine economic growth in the first quarter.
In a more pessimistic scenario where total remittances from across Asia fall by 30% through the entire year, then it could trim as much as 0.51 percentage points from the Philippines’ full-year growth.
“Mainland China accounted for a mere 0.1% of total remittances in the 11 months to November 2019. However, remittances from Filipinos working in Hong Kong and Taiwan accounted for 2.6% and 2.0% respectively, bringing the cumulative number to 4.7%,” ANZ Research explained.
“It is also important to bear in mind that around a fifth of overseas Filipino workers are engaged in the shipping (passenger and cargo) industry, so any weakness in cruise travel or global trade will have a negative impact,” it added.
Beijing had already been battling a slowing domestic economy before the new coronavirus emerged, disrupting businesses, travel and supply chains.
At its first meeting in 2020, the Bangko Sentral ng Pilipinas’ Monetary Board cut its benchmark rate by 25 basis points to 3.75% — a move the central bank described as a “preemptive” action against risks to economic growth, including the novel coronavirus fallout. — with a report from AFP
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