OFW REMITTANCES TO GROW 10% IN 2005
MANILA, March 7, 2005 (STAR) By Des Ferriols - With the United States economy performing better than expected, the Bangko Sentral ng Pilipinas (BSP) said remittances from overseas Filipino workers (OFWs) could increase beyond the official six percent target and expand by at least 10 percent in 2005.
The growth in OFW remittances is expected to slow down this year from 11.8 percent in 2004 to six percent, but the BSP said it was possible for the growth to be bigger than expected.
BSP Governor Rafael Buenaventura told reporters over the weekend that six percent was big enough, given last year’s record-setting base of comparison.
"We can probably do a little better than six percent which is very good already," he said. "I’d say 10 percent would be the high end of the range we are seeing."
Buenaventura said it might be hard to grow faster than last year’s 11.8 percent growth rate, but added that the improvements in the US economy — despite the Bush administration’s accumulating deficit — would be good for expatriate labor.
Buenaventura said the oil industry in the oil-producing regions also continued to draw a significant number of OFWs and, if the situation in Iraq stabilizes, the country could resume sending workers to that part of the Middle East.
OFW remittances grew by 11.8 percent in 2004, bringing the total remittances to $8.5 billion. Last year’s target growth rate was also six percent, based on the projected increase in the deployment of workers abroad.
The BSP said the continued rise in OFW remittances from the comparable period last year was due to the growing demand for Filipino workers abroad and the seasonal transfers for the holiday season.
The BSP said the increase was also due, in part, to the aggressive marketing by commercial banks that have been competing vigorously for increased shares in the remittance business from OFWs deployed in the world’s major labor markets.
Buenaventura told reporters that despite the increased competition from other labor-exporting countries, Filipino workers were still heavily favored over other nationalities because of their track record, training and proficiency.
Preliminary data on new hires and rehires from the Philippine Overseas Employment Administration (POEA) showed that, for 2004, the total number of deployed land-based workers grew by 2.7 percent to 669,539, while the total number of sea-based workers grew by 4.2 percent to 225,122.
The BSP reported that local commercial banks, on the other hand, pursued vigorous marketing efforts to promote their money transfer services by expanding their remittance center networks.
Buenaventura said these banks have also been expanding their tie-ups with foreign banks and increasing the efficient delivery of services to OFWs.
He reported that the bulk of OFW remittances came from the US, Saudi Arabia, Italy, Japan, the United Kingdom, Hong Kong and the United Arab Emirates — countries that were consistent major sources of remittance during the period.
The surge in OFW remittances has been propping up the country’s gross international reserves which reached $16.052 billion at the end of December, overshooting the government’s $15-billion target for 2004.
The BSP said the country was quickly using up its reserves for import payments and for servicing the government’s maturing foreign debts.
According to the BSP, the drawdown from the international reserves was particularly strong in the wake of the surge in the prices of oil and oil products.
However, the country’s creditors are still nervous about the cause of the increase in international reserves, which they said have been funded mostly out of foreign borrowings.
Reported by: Sol Jose Vanzi
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