OFW remittances seen to hit $17B

The Bangko Sentral ng Pilipinas (BSP) said remittances from overseas Filipino workers (OFWs) would reach a record $17 billion in 2008.

The BSP said the actual level is projected at $16.9 billion at the end of 2008, including both remittances that go through banks and other remittance channels.

The BSP said remittances that go through banks are projected to reach $16.3 billion in 2008, about 13 percent higher than the inflow that went through banks in 2007.

Based on the latest available data with the BSP, Filipino workers abroad sent home $1.4 billion in October, the second highest monthly inflow recorded since 1989, which brought the total remittances to $13.7 billion in the first 10 months of last year.

The BSP expects record inflows to have continued in November and December as workers sent more money home to their families in preparation for the holiday season.

The BSP said the October 2008 remittances rose 3.3 percent compared with a year ago level and by 7.6 percent compared with September 2008 inflow.

Cumulative inflows for the first 10 months of 2008, on the other hand, were 15.5 percent higher than the level recorded over the same period in 2007.

The October pick-up was seen as the beginning of the seasonal rise in remittances from overseas Filipinos who tend to send more money to their families in time for the holiday season.

BSP Governor Amando M. Tetangco Jr. said robust remittances indicated the underlying resilience of foreign exchange inflows being generated by Filipino workers abroad.

The BSP cited preliminary data from the Philippine Overseas Employment Administration (POEA) which indicated that deployment in the first 10 months of 2008 went up by 25.5 percent to 1,115,199 from 888,339 in 2007.

“While there could be a slowdown in the rate of deployment as a result of the global financial strains, this could be offset by other employment opportunities in countries that have skills shortage,” Tetangco said.

According to Tetangco, there is a labor shortage in countries like Canada, some Middle Eastern countries and more recently, South Australia.

But Tetangco said that remittances may slow down this year ruled out the possibility of a decline as labour deployment continued to increase.

Global economies have started to decelerate this early but Tetangco said that all statistical indicators still show a sustained increase in OF remittances, at least this year.

“We’re expecting that there would be some effect (of the global slowdown) but we don’t think there will be a decline in the amount,” he said. “There might be some deceleration in growth rate but no decline in the amount of actual remittances.”

Tetangco said data from the Philippine Overseas Employment Administration (POEA) still indicated a consistent increase in the deployment of newly-hired workers for overseas placements.

“There are workers coming home, to be sure but there are also workers being deployed so the actual number of deployed workers does not actually increase significantly,” he said.

What has significantly changed, according to Tetangco, was the quality of workers being sent abroad.

“A lot more skilled workers are going for jobs abroad, and the number of unskilled workers like domestic helpers is actually declining,” Tetangco said. “These skilled workers have better jobs so they remit more.” “Robust remittance flows have been shored up by strong overseas demand for Filipino skills,” said Tetangco. He said these inflows have remained the source of strength for the economy despite the global financial crisis.–Des Ferriols, Philippine Star