REMITTANCES UP BY 10.4% IN AUGUST
MANILA, October 16, 2008 (STAR) By Des Ferriols - Money sent home by overseas Filipinos workers (OFWs) reached $1.3 billion in August, slightly lower than the $1.4 billion they sent home in July, but the latest remittances were still 10.4 percent higher than last year’s figure.
Data from the Bangko Sentral ng Pilipinas (BSP) revealed that dollar remittances from OFWs have reached $11 billion since January, about 17.2 percent higher than the total remittances recorded over the same period last year.
Last year, the BSP said overseas Filipinos sent a total of $10.9 billion from January to August.
The slowdown in remittances last August was attributed to the cautionary stance that overseas Filipinos took as world financial markets reeled from the effects of high oil prices, high inflation and the beginnings of the financial meltdown in the US.
The BSP said the number of OFWs deployed in August had increased, which means that future remittances would also increase.
Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that for the first eight months of 2008, some 884,907 Filipinos were deployed abroad.
BSP Deputy Governor Nestor Espenilla said the OFWs increased by 26.4 percent compared to last year’s deployment of 699,937 workers.
Espenilla said more Filipinos were hired in Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Taiwan and Hong Kong – areas largely insulated from the financial meltdown in the US.
The remittances from January to August came from the US, Saudi Arabia, Unite Kingdom, Italy, United Arab Emirates, Canada, Japan, Singapore and Hong Kong.
Espenilla said the ongoing global economic slowdown could put a dent on the growth of remittances, particularly from those developed countries that would be most affected by strains in the global financial markets.
“But remittances would continue to provide strong support to the economy for a number of reasons,” he said. “First, demand for Filipino workers overseas has been on an uptrend.”
Espenilla said ongoing talks between Filipino officials and potential foreign employers combined with the increased deployment of highly skilled OFWs who receive higher salaries are expected to increase the hiring of workers and improve dollar remittances.
“Filipino workers overseas and their families have gained greater access to enhanced banking services provided by local banks and their foreign counterparts,” he said.
Espenilla said remittances have been made easier, safer and cheaper by the financial institutions through formal channels.
But Espenilla admitted that the BSP was looking at how the global economic slowdown would affect Filipinos working abroad and this year’s growth was expected at 15 percent.
Indicators were initially positive with actual inflows surpassing the $1-billion monthly average last year. Espenilla said the global economic slowdown was certain to have an impact on employment in general.
He said that even at 15 percent growth rate, it would still account for a significant portion of the country’s dollar reserves, which were projected to reach $37 billion this year.
“Our original projection was 10 percent anyway and we’re already ahead of the projection as of July,” Espenilla said. “But of course now factoring in the impact of what’s happening in host countries, we’re now estimating some slowing down. On a yearly basis, that’s 15 percent and it’s still pretty decent.”
Fortunately, Espenilla pointed out, the sources of remittances were very diversified and Filipinos working abroad would not be uniformly affected by the slowdown.
A significant portion of the country’s exported labor, for instance, were in the Middle East where soaring oil prices this year have spurred another economic boom that was largely unaffected by the financial crisis in the US.
Espenilla said the US accounted for about 30 percent of total remittances. But the US was also one of the largest employers of the country’s health professionals where Espenilla said employment was likely to be unaffected.
“So we still believe in the resilience of the remittances,” he said.
Meanwhile, Foreign affairs undersecretary for migrant workers Esteban Conejos said the government is drawing up plans to counter any potential negative impact of the global financial crisis on OFW remittances.
Conejos said the Filipino workers appear to have been spared from the financial crisis.
“We are not in a serious problem. We don’t see any immediate worry of a mass layoff, or a deluge coming back to the Philippines,” he added.
Chief News Editor: Sol Jose Vanzi
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