OFW INFLOWS SURGE 28% TO $7.9 BILLION IN FIRST 9 MONTHS
MANILA, November 16, 2005 (STAR) By Rocel C. Felix - Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said yesterday strong remittances from overseas Filipino workers (OFWs) continue to prop up the economy with January to September remittances already reaching $7.94 billion, up by a strong 28 percent from the $6.204 billion posted during the same period in 2004.
The rise in remittances bolsters government hopes of meeting the projected OFW inflow of $10.3 billion for the whole of 2005 or 20 percent higher than the inflows recorded in 2004.
In 2004, migrant workers remitted $8.54 billion, the highest recorded fund transfers since the 1970s when the first batch of OFWs were deployed.
For this year, the emerging OFW remittance level is at $10.3 billion, higher than the $9.2 billion projected earlier.
The BSP said that in 2006, OFW remittances will reach $11.3 billion which is more than 10 percent of the country’s gross domestic product (GDP).
Throughout the year, the country has been relying on huge remittances from OFWs to boost domestic consumer demand and keep the economy afloat and bring in foreign exchange that failed to materialize due to the ongoing slowdown in export revenues.
While $10.3 billion in OFW inflows is projected to go through the local formal banking system this year, government studies show that about 25 to 30 percent are coursed through other informal channels, as overseas workers prefer to send money through couriers.
Previously, Tetangco said that about $3 billion of remittances from OFWs do not go through the formal banking system.
He noted that the BSP includes migrant workers non-bank remittances in its accounting of balance of payments figures under personal income and transfer accounts.
He said that about 25 percent to 30 percent of non-bank remittances pass through informal channels but beyond the BOP estimates, the actual non-bank OFW cash is higher at 30 percent. The remaining 70 percent consist of bank transfers.
"In the BOP we are using 20 percent, but we are very conservative, but it should be higher or about 30 percent of fund transfers are remitted through non-bank networks."
Tetangco said the BSP wants to register more of these fund transfers when they go through the formal channels or sent through the banking system.
In 2004, about 75 percent of cash transfers were done through the banks, while 25 percent went through informal networks. This has since has increased to 30 percent.
There are about six million OFWs and migrants deployed abroad whose level of remittances are increasing yearly. These consist of caregivers and health workers, seafarers, service staff, professional/technical workers and production related workers.
BSP has been urging OFWs to send fund transfers through banks, which is cheaper and safer than door-to-door or other informal channels of remitting their hard-earned cash.
The BSP is also boosting measures to cut the cost of remitting funds.
Based on a survey conducted this year, service charge by "credit to account (bank)" arrangement is proven cheaper compared to door-to-door, which has the highest service charge in the fund transfer business. In the last five years, service charges have narrowed from 4.35 percent in 2000 to 1.50 percent this year.
The BSP is currently reviewing the National Statistics Office (NSO) reports detailing OFW data. The survey includes questions such as how do OFW usually send their money home and the choices include banks, agencies or local offices, friends and co-workers or door-to-door.
U.S. hopes APEC statement will spur progress at upcoming WTO talks 11/16 2:09:14 PM
BUSAN (AP) - The United States hopes a strong statement by the 21 members of the Asia Pacific Economic Cooperation forum can help foster results at key world trade talks next month, the top U.S. trade negotiator said Wednesday.
Possible progress at the World Trade Organization talks in Hong Kong has been threatened, mostly by disagreements over reducing subsidies for European agriculture. But U.S. Trade Representative Rob Portman said Washington "has not given up hope" for movement at the negotiations.
"We don't believe the world community will let this once-in-a-generation opportunity slip past us," Portman said at a news conference.
"Clearly there are differences of opinion that will be hard to bridge in the next couple of weeks," he said. "But I do think we can bridge the differences by having APEC play a more central role in the talks."
The APEC ministers are finalizing wording of a special statement on the WTO talks set to be approved by leaders at their annual summit later this week. According to a draft seen by The Associated Press, APEC countries warn the WTO will lose credibility if it fails to break the deadlock.
Portman sought to downplay expectations of the Hong Kong meeting.
"Hong Kong was never meant to be the end of the process ... Hong Kong was always meant to be a milestone along the way," he said.
He said Washington hoped to have a roadmap with formulas and processes laid out for reducing barriers.
"We will not have that unless we make a lot of progress in the next few weeks," Portman said. "The United States will keep pushing hard to have as much of a roadmap as possible in Hong Kong."
Chief News Editor: Sol Jose Vanzi
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