Possible economic impacts of falling oil prices, the pandemic, and the looming global recession onto overseas Filipinos and their remittances

Abstract

Billion-dollar remittances from an estimated 10.3 million Filipinos in over-200 countries and territories will be a major economic lifeline for the Philippines, given today’s global pandemic due to SARS-CoV-2 and COVID-19. However, the new coronavirus and the resultant area quarantines and lockdowns are already as globally dispersed as the overseas Filipino population. Countries are now rolling out economic stimulus packages for citizens and critical economic sectors. Foreign workers like Filipinos will be affected by these economic disruptions. Add the prevailing drop of global oil prices and the looming global recession to these ongoing woes facing countries and the Philippine economy’s reliance on remittances. This paper projects two short-term trends that will affect Filipino overseas work and dollar remittances. One, cash remittances will visibly decline —from US$30 billion in 2019 to about US$ 24-to-27 billion this year (that being the steepest year-on-year decline of remittances in Philippine migration history). And two, about 300,000 to 400,000 overseas Filipino workers will be affected by lay-offs and salary cuts worldwide. The Philippines is the world’s most organized migration bureaucracy among migrant-origin countries. However, the COVID-19 pandemic may well be the most challenging crisis facing the responsive migration management system of the Philippines.