MANILA, November 14, 2003  (STAR) By Des Ferriols - The Bangko Sentral ng Pilipinas (BSP) reported yesterday that remittances from overseas Filipino workers (OFW) amounted to $5.66 billion in the first nine months of the year, up 5.1 percent from $5.389 billion in the same period last year.

The rise in remittances came even though the number of Filipinos who went to work abroad in the first nine months of the year declined by 5.6 percent to 669,419 from a year ago.

BSP officer-in-charge Armando Suratos attributed the higher remittances to larger numbers of Filipinos receiving higher salaries by working as professionals, caregivers, clerks, teachers, utility personnel and as sea-based workers.

Formerly, most Filipinos overseas received relatively-lower wages by working as domestic helpers and manual laborers.

The BSP expressed confidence overseas remittances in 2003 would be at least six percent higher than the previous year.

For September alone, remittances went up by 7.6 percent to $600 million from $557 million in the same period last year, boosting the cumulative nine-month inflows.

Suratos said there was also a significant shift in the profile of land-based workers to higher-paid positions such as caregivers, clerks, office managers, teachers and utility personnel.

The number of land-based workers declined to 669,419 during the nine-month period from 708,859 a year ago while sea-based workers increased by 3.2 percent to 162,581 from 157,552.

According to Suratos, remittances came mostly from the US, Saudi Arabia, Japan, United Kingdom, Hong Kong, Singapore, United Arab Emirates, Italy, Kuwait and Taiwan.

OFW remittances account for a huge chunk of the country’s international reserves, a critical weapon of the BSP against attacks on the peso.

This year, the combined effects of improving OFW remittances and heavy foreign borrowing boosted the country’s gross international reserves (GIR) to $16.887 billion as of October.

The BSP said the GIR went up by $725 million from $16.162 billion in September, coming largely from the proceeds of the government’s foreign borrowings.

BSP Governor Rafael B. Buenaventura disclosed that last month’s borrowing spree has significantly improved the country’s GIR.

He said it was possible for the GIR to reach $15 billion by year-end, compared to the original projection of only $14 billion.

Buenaventura said the unexpected strong performance of the government’s dollar-denominated global bonds allowed the GIR to increase in October and possibly to increase even more by the end of the year.

"If the government decides to borrow more, then we will see further improvements in the GIR and this is still good even if the inflows are not coming from actual economic activity per se," Buenaventura said.

Ideally, the country’s GIR should be well supported by foreign exchange inflows from economic activities such as merchandise and non-merchandise exports as well as actual investments.

According to Buenaventura, the GIR build up could even improve the country’s BOP position which was originally projected to deteriorate into a deficit amounting to at least $1.2 billion.

"If the government borrows more before the end of the year, the BOP deficit will be less and it might even go down below $1 billion," Buenaventura said.

The BSP has already approved in principle the Arroyo administration’s plan to raise $1 billion more before the end of the year, primarily to pre-fund its requirements for 2004.

There are more than five million Filipinos working overseas and the money they send back to their relatives at home is a major source of foreign exchange for the cash-strapped country.

Reported by: Sol Jose Vanzi

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