OFW remittances threatened by war

Money from Filipino workers (OFWs) are likely to remain flat until yearend as overseas deployment slows and renewed hostilities in West Asia create more volatility and disturbances in the labor sector.

The Union Bank of the Philippines (UnionBank) expects full-year remittance growth to ease to 2% as it sees weak OFW deployment and global geopolitical woes dampening inflows.

“UnionBank maintains its 2% cash-remittance growth forecast for 2026, equivalent to around $36.3 (billion),” UnionBank Chief Economist Ruben Carlo Asuncion said.

“Growth may remain moderate amid weaker OFW deployment and geopolitical risks, although seasonal inflows should provide support toward year-end,” he added.

If  forecasts materialize, the Philippines will see the slowest remittance growth since the coronavirus disease 2019 (COVID-19) pandemic in 2020, when it contracted by 0.8% to $29.903 billion.

Excluding the pandemic, this year would mark the weakest remittance growth in 25 years or since the 0.3% decline in 2001.

As of July, the country deployed a total of 980,673 OFWs, 34.04% lower than the about 1.487 million recorded in the same period in 2025, based on data from the Department of Migrant Workers.  The OFWs were  deployed to Saudi Arabia, followed by the United Arab Emirates (UAE), Singapore, Hong Kong, Qatar, Taiwan, Japan, Kuwait, Australia, and South Korea.

The Bangko Sentral ng Pilipinas (BSP) reported on Tuesday that cash remittances, or money sent home by OFWs through banks, rose by 1.9% year on year to a seven-month high of $3.24 billion in July from $3.179 billion.

This marked the highest monthly value of inflows recorded since the $3.522 billion logged in December 2025.

“Downside risks from heightened geopolitical tensions, particularly in the Middle East, remain elevated and could contribute to greater month-to-month volatility,” the economists at Maybank said.

BSP data cited by Maybank showed that remittance flows from Middle East-based Filipinos eased in July, with those from Saudi Arabia slowing to a 1.3% growth from 2.8% in June, the UAE to 1% from 2.5%, and Qatar to 2.1% from 2.8%.