Migrant workers face remittance crisis

By Mata Press Service

Helen Bautista, a North Vancouver caregiver moonlighted with her husband to clean households as a way of boosting their incomes.

The extra cash they make is not for them. It’s for their extended families living in a village outside Metro Manila.

With COVID-19, the extra cash to remit home monthly has dried up.

“We can’t go to people’s houses to clean so we don’t have the extra money to send back to our families in the Philippines,” said Bautista.

“It’s not like Canada…there is not much government help in the Philippines and they need what we can send them, especially now.”

Gurjan Singh came to Canada a month ago to work as a cook in a restaurant. The tips and overtime he makes are generally reserved for his ageing parents in Peshawar, Punjab.

“It has been two months now since the restaurant closed because of COVID 19 and I am borrowing money to send back home,” he said.

Singh and Bautista are the local faces of a global remittance economy, powered by the billions that are transferred to the homelands of migrant workers every month.

According to the World Bank, global remittances totalling $554 billion US went to low- and middle-income countries in 2019. The organization predicts that figure will drop by approximately 20 percent this year, due to the pandemic.

Carleton University's Norman Paterson School of International Affairs in Ottawa estimates that about $30 billion is sent home by migrant workers in Canada annually, according to a CBC report.

Among the top countries that rely on remittances is the Philippines, which is a major migrant worker source for Canada.

For decades, the Philippines has relied on its overseas Filipino workers, or OFWs, to drive economic growth and provide a cushion against financial crises with their remittances. Last year, an estimated 10 million OFWs sent about US$30 billion home – equating to nearly 8 percent of the country’s GDP.

But that amount could be set to plummet by some US$6 billion in the wake of the pandemic, according to an estimate by the Ateneo Centre for Economic Research and Development in Manila, which if it happened would be “the steepest drop of remittance inflows in Philippine migration history”.

More than one in 10 Filipino households have a family member who is an OFW.

India, another major source country for migrant workers received the highest remittance in the world -$79 billion – in 2018-2019, a 14 percent jump from the previous year.

According to the World Bank estimates there can be a drop in 23 percent in Indian remittance.

The United Nations last week announced a Member State-led initiative to call on policymakers, regulators and remittance service providers to improve migrants’ access for sending and receiving remittances, and to reduce transfer costs during the ongoing pandemic of COVID-19 outbreaks.

The goal is to remove the obstacles that migrants and their families face when sending and receiving money so that they can continue to cover basic needs and services such as food, housing, education and health care.

“The COVID-19 pandemic has severely impacted health systems worldwide, but in terms of economic impacts, low- and middle-income countries may take a greater hit due to the projected decline in remittances for this year,” said the office of the United Nations Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) in a statement.

“The hardship of COVID-19 felt by migrants in the form of lost wages and employment – often without government safety nets – is a large part of this crisis in remittances,”  said Judith Karl, Executive Secretary for UNCDF.

“The decline also results from a host of issues caused by the coronavirus that impact the services migrants use to send money home – including the restrictions placed on remittance services providers and their agents. The loss of this crucial financing lifeline is devastating for both the migrant households and receiving countries”

“UNCDF, together with UNDP, is committed to supporting the Member State-led call to action and to ensuring that every measure is available to facilitate migrants in sending remittances home.”

“Remittances are essential for COVID-19 response and recovery,” said Asako Okai, UNDP Assistant Administrator and Director of its Crisis Bureau.

“In countries with limited social safety nets and less diversified economies, they often serve as a lifeline, and more so in times of crisis. The existing obstacles to send and receive money can lead to increased poverty and social insecurity, which would further destabilize national economies,” Ms. Okai added.

Migrants’ families in their home countries depend on incoming remittances for basic necessities such as purchasing food, and paying for housing, education and healthcare. Without remittances, families face the risks and acute consequences of not being able to afford these basic needs, the UN agencies said.

• with Agencies

A Crucial Lifeline

75%  - of the world's migrants work in countries where three-quarters of the globe's COVID-19 cases have been reported.

90%  - of global remittances are sent by migrants from these countries.

20%  projected slump in 2020 remittances. That equates to US$110 billion.

The Canadian remittance picture

• In 2017, 37% of Canadian residents born in countries eligible for Official Development Assistance sent money abroad to relatives or friends. Men (38%) remitted slightly more than women (36%).

• Canadian residents born in ODA-eligible countries remitted $5.2 billion in 2017. This amount was unevenly distributed between men and women: Men sent a total of $2.9 billion abroad and women sent $2.3 billion.

• Remitters sent $2,855 yearly on average. Men ($3,250) remitted on average $780 more than women ($2,470).

• Men remitted more than women in all birth regions except Southeast Asia and Oceania, where women remitted $140 more than men, on average.

• The average amount remitted in 2017 ranged from $1,825 for remitters born in the Americas to $4,755 for those born in Eastern Asia.

• Some destination regions received more remittances than others. Southeast Asia and Oceania received approximately $1.4 billion in 2017, representing 27% of the total amount remitted in 2017.

• At the country level, the Philippines, India, the United States, China and Pakistan were the top five destinations of remittances from Canada.

• Money transfer stores (MTSs) were the most common method of sending money: 56% of remitters went in-person to an MTS to send their last money transfer. An additional 8% of remitters used an MTS online.