MANILA, APRIL 21, 2008
(STAR) By Iris C. Gonzales - The Bangko Sentral ng Pilipinas (BSP) expects dollar remittances from overseas Filipino workers (OFWs) to continue to grow and support domestic consumption despite a slowdown in the US economy.

A ranking BSP official said remittances will continue to be “at the heart of domestic demand.”

“It’s difficult to pin down the number but directionally I think remittances will remain strong for the reason that the demand for Filipino labor is broadly inelastic,” the official said.

He noted that most Filipino workers are professionals, medical caregivers and teachers.

“The demand for this type of labor is not so much dependent on the dynamics of economic growth but on social requirements,” the official said.

Furthermore, the source said that even as demand for exports will weaken, this will be compensated by strong domestic consumption supported by OFW remittances.

Latest data from the BSP showed that remittances from Filipino workers abroad continued to pour in the first two months of the year.

Dollars sent home by overseas Filipinos coursed through banks grew year-on-year to $2.5 billion in the first two months of the year or 15.5 percent higher than the level recorded in the same period last year.

In February alone, remittances rose to $1.3 billion or 16 percent higher than the figure recorded in the same month last year.

In 2007, the Philippine Overseas Employment Administration (POEA) reported an increase in the number of OFWs. These are in the fields of engineering, medical and healthcare, education and in the food and hotel service businesses.

Citing POEA data, the BSP said the trend continued in 2008.

This trend has continued in 2008 as preliminary data for the period January to February 2008 showed that the number of deployed workers rose by 14.6 percent to 199,378 from 174,046 recorded a year ago, the BSP said.

By skill type, both the numbers of land-based and sea-based workers increased by 13 percent and 20.3 percent, respectively.

The sustained growth in the level of OFW remittances was also supported by local banks’ provision of enhanced banking services. One such innovation is the introduction of mobile banking services.

The continued tie-ups with foreign financial institutions that facilitated the transfer of dollar remittances to beneficiaries also boosted the growth of dollars sent home by OFWs, the BSP said.

The United States, Saudi Arabia, the United Kingdom, Italy, the United Arab Emirates, Canada, Japan, Singapore and Hong Kong remained to be the major sources of dollar remittances.

The BSP expects remittances to grow by $15.7 billion this year from the $14.4 billion recorded in 2007.

Chief News Editor: Sol Jose Vanzi

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