OFW  REMITTANCES  UP  18.1%  TO  $7B  IN  H1

MANILA, AUGUST 16, 2007
(STAR) By Des Ferriols - Remittances of overseas Filipino workers (OFWs) coursed through banks reached a new record high of $7 billion in the first half of 2007, up 18.1 percent from the year-ago level, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

In June alone, the BSP said remittances amounted to $1.1 billion, marking the 14th straight month that remittances have been above the $1-billion mark.

The BSP said the high level of remittances during the first semester can be attributed to the provision by banks of more efficient remittance transfer services.

According to BSP Governor Amando M. Tetangco Jr., remittances were also boosted by the expansion in the number of remittance centers and tie-ups abroad, making it easier for overseas Filipinos to send money home.

“As a result, the access of overseas Filipinos and their beneficiaries to the various financial services offered by banks has expanded,” Tetangco said. “This encouraged their use of the banking system as the conduit for their remittance transactions as well as for their savings and investment activities.”

Tetangco said remittances remained strong even as the number of deployed Filipino workers has declined.

Tetangco said preliminary data obtained from the Philippine Overseas Employment Administration (POEA) showed that the total number of deployed workers contracted by 5.1 percent to 546,212 in the first half of this year relative to the level in the same period a year ago.

Classified by type of worker, the BSP reported that according to the POEA, the number of land-based and sea-based workers declined by 3.2 percent (to 422,262) and 11.1 percent (to 123,950), respectively, from the levels during the comparable period a year ago.

To date, the BSP said the US, Canada, the U.K., Saudi Arabia, United Arab Emirates, Italy, Japan, and Hong Kong remained to be the major sources of remittances.

The BSP, however, is at odds with the overseas Filipinos community which has been promised some relief by the Arroyo administration against the rapid appreciation of the peso against the dollar.

The BSP is opposing a proposal to support a fixed foreign exchange rate for overseas Filipino workers.

For starters, Tetangco said such a program would require huge amounts of public funds because the difference between the market-determined foreign exchange rate and the fixed exchange rate would have to be subsidized.

“Who would bear the cost of that subsidy?” Tetangco asked, adding that if the current exchange rate of P45.7 to the dollar is offered to OFWs at, say P50 to a dollar, the difference of P4 would have to be paid by someone.

With OFW remittances expected to reach at least $14 billion this year, such a program would cost over P60 billion a year, assuming a market rate of P45.7 to the dollar and the fixed rate of P50 to the dollar.

The amount would be over 85 percent of the total national government budget deficit for 2007 alone.

EVAT collections hit P12B in 1st semester By Iris C. Gonzales Thursday, August 16, 2007

 Collections from the imposition of the expanded value added tax (ÉVAT) in the first semester of the year rose by P1 billion to P12 billion, the Bureau of Internal Revenue (BIR) reported yesterday.

The EVAT law, passed in 2005, raised the tax on sales to 12 percent from 10 percent and lifted exemptions on oil and petroleum products.

The new VAT law also increased the minimum corporate income tax to 35 percent from 32 percent on the condition that this would go down to 30 percent starting 2009.

The government was able to exceed the reformed VAT collection goal of P75.8 billion by P1.1 billion last year.

Total VAT collections, meanwhile, stood at P67.9 billion from January to June or P25.4 billion short of the six-month collection goal of P93.3 billion.

VAT is the second biggest source of revenue for BIR after net income and profits but the agency perennially fails to meet its collection targets.

The government had hopes for VAT or sales taxes after Congress raised the rate to 12 percent in February 2006 from 10 percent previously as part of the government’s fiscal reform agenda.

Data from the Department of Finance (DOF) showed that the BIR incurred a revenue shortfall of P38.6 billion in the first half of the year as revenues reached P334.7 billion against the target of P373.3 billion.

The BIR has a revenue target of P730 billion for the year. The agency is stepping up measures to meet the target and enable the government to wipe out its deficit target for the year of P63 billion.


Chief News Editor: Sol Jose Vanzi

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