Manila, September 16, 2003  (STAR) By Des Ferriols  - Remittances from overseas Filipino workers (OFWs) went up by six percent to $4.521 billion in the first seven months of the year from $4.264 billion a year ago, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

According to the BSP, remittances actually eased in July compared to the previous months but the BSP said this was normal since remittances peak only twice a year–just before the opening of the school year in July and towards the holiday season in December.

OFW remittances account for a significant portion of the country’s current account and provides OFW remittances the critical cushion in the international reserves that the BSP uses to shield the peso from excessive depreciation.

The BSP expects OFW remittances to reach $7.89 billion this year, slightly higher than the previous year’s $7 billion.

The BSP attributed the improvement to the increase in the number of deployed overseas contract workers.

Diwa Guinigundo, managing director of the BSP’s Department of Economic Research said the increase in dollar remittances would further boost the country’s gross international reserves (GIR). OFW remittances are expected to reach at least $8 billion in 2004.

The GIR is expected to grow by 20 percent this year, still lower than the 22 percent growth recorded in 2002.

BSP Governor Rafael B. Buenaventura said that despite the slowdown, dollar remittances would still be one of the biggest contributors to the country’s GIR.

For this year, the country’s GIR is expected to reach $14 billion - $15 billion.

"The number of Filipino workers are expected to continue increasing this year but there could be shifts in destination away from the tension-filled Middle East and towards nearer labor markets in Asia," Buenaventura said.

On the other hand, there was also a noticeable increase in the deployment of higher-paid health workers, specifically health care-givers.

Ultimately, Buenaventura said these factors would even out and remittances would continue to grow, albeit at a slower pace.

Over the last five years, OFW remittances have been on a steady increase, reaching $5.741 billion in 1997, increasing further to $7.367 billion in 1998. In 1999, remittances reached $6.794 billion.

There was decline in 2000 when remittances amounted to only $6 billion but this corrected immediately to $6.324 billion in 2001.

According to the BSP, the banking system reported a steady increase in OFW remittances consistent with the 3.5 percent increase in the number of newly hired and re-hired Filipino workers.

Reported by: Sol Jose Vanzi

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