REMITTANCES sent home by migrants are expected to continue to rebound in 2022, as economies recover from the pandemic, the Asian Development Bank said.
In a report titled “Labor Mobility and Remittances in Asia and the Pacific (APAC) during and after the coronavirus disease 2019 (COVID-19) pandemic,” the ADB said remittance inflows to the region are expected to make up 63.4% of the growth in global remittances for this year and in 2022.
The ADB estimates that global remittances will rise by 4.8% or $34 billion this year, and by 4.2% or $31 billion in 2022. For the APAC region, remittance inflows will jump by 6.7% or $21.2 billion this year, and increase by 5.9% or $19.8 billion in 2022.
The higher remittance growth estimate for 2021 reflects the base effect and “migrant workers’ desire to remit and possibly make up for foregone remittances in 2020,” the ADB said.
“Most advanced economies, which are the primary sources for remittances, have already recovered more strongly from COVID-19 than migrant-sending economies that are still affected severely by the ongoing COVID-19 resurgence due to the Delta variant. In turn, this wider economic divergence could provide a stronger stimulus for remittance inflows from advanced economies to developing economies,” the ADB said.
The slower growth in remittance inflows in 2022 may indicate the improvement of the global economy as base effects face.
For Southeast Asia, remittances are estimated to grow by 4% or $3 billion in 2021, and at a faster pace of 5.9% or by $4.6 billion next year.
“The estimated robust recovery of remittances in the near term can be largely linked with the expected higher remittance receipts coming from migrants in more advanced economies such as the United Kingdom (UK), the US, the European Union (EU), and the Middle East,” the ADB said.
The ADB said remittance growth in APAC could even outpace projected economic growth rates in Asia during the same period.
“These results reflect the higher COVID-19-related risks in the region — higher COVID-19 cases and lower vaccination rates — which trigger a stronger altruistic response among migrant communities abroad,” it said.
The Philippine central bank expects cash remittances to grow by 6% this year and by 4% in 2022.
Despite the improvement in remittance inflows, the ADB said migrant workers still require assistance as many destination countries continue to have strict immigration and health protocols.
“It will likely take time before borders reopen fully to foreign workers, even if domestic outbreaks in many host economies are contained. Effective policy support and incentives to help the migrant and remittance sectors recover can make a significant difference,” the ADB said.
The ADB said both home and destination economies should ensure social protection for migrants and their families through employment-related support, health services, and social assistance.
“Some recipient households remain at risk of falling into poverty, which calls for sustaining support especially for those with little access to employment such as older persons, single parents, and persons with disabilities,” the ADB said.
The multilateral lender also stressed that access to COVID-19 vaccines must be guaranteed for migrants.
Cash remittances sent by overseas Filipino workers provide a boost to household consumption, which makes up 70% of the Philippine economy. — L.W.T. Noble