Remittances to low- and middle-income countries (LMICs) are expected to remain resilient but will likely slow substantially as economic activity in countries hosting migrant workers weakens.
In its latest Migration and Development Brief, the World Bank said that remittance flows to LMICs were expected to grow by just 1.4 percent to $656 billion this year, markedly slower compared to the 8.0 percent seen in 2022.
The growth outlook for 2024 is also low at 1.5 percent.
"Remittances are highly complementary to government cash transfers and essential to households during times of need," said Michal Rutkowski, the World Bank's global director for its social protection and jobs practice, in a statement.
Given their robustness as a source of external funding, remittance inflows have grown more essential to governments and people in the post-Covid period of slower economic growth and declining foreign direct investments, the Washington-based multilateral organization said.
Dilip Ratha, lead author of the report, added that "remittances have become a financial lifeline in many economies through the pandemic and will become even more so in the foreseeable future."
"Remittance flows to the Philippines grew at about 4 percent to reach $38 billion in 2022, relative to $36.7 billion in 2021," the report noted, "benefiting from a lifting of the ban on emigration to Saudi Arabia due to the abusive treatment of workers and specific deals forged by the Filipino government, especially in new OECD (Organization of Economic Cooperation and Development) destinations."
Remittance costs remain an issue but sending money to the Philippines is among the least expensive in East Asia and the Pacific, the World Bank noted.
The top five recipient countries for remittances in 2022 were India (which received $111 billion), Mexico ($61 billion), China ($51 billion), the Philippines ($38 billion) and Pakistan ($30 billion).
Based on Bangko Sentral ng Pilipinas data, overseas Filipino worker remittances rose by 3.0 percent year on year to $2.97 billion in March from $2.89 billion a year earlier.
Year to date, remittances were also 3.0 percent higher at $8.91 billion compared to the $8.65 billion recorded in January-March 2022.
Country forecasts were not made in the report but by region, East Asia and the Pacific is expected to see slightly better remittance growth of 1.0 percent from 2022's 0.7 percent.
Excluding China, remittance growth for the region was forecast to moderate to 3.0 percent from 3.8 percent.
Growth is expected to remain unchanged at 1.0 percent in 2024 but with China out of the equation, the projection is that of a slower uptick of 2.9 percent.
The World Bank said global remittance growth would markedly slow to 1.1 percent this year from 5.1 percent in 2022 and then slightly recover to 2.0 next year.
Source: Manila Times
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