January remittances flat

Published by rudy Date posted on March 17, 2009

Growth in remittances sent home by migrant Filipino workers slowed to a five-year low in January as the global recession reduced demand for Filipino nurses, engineers and housekeepers overseas.

Money sent back to the Philippines increased 0.1 percent from a year earlier to $1.27 billion, the Bangko Sentral said in a statement yesterday. That is the smallest gain since January 2004. Remittances grew 0.8 percent to $1.4 billion in December.

Remittances, the country’s largest source of foreign exchange after exports, may contract this year, according to Royal Bank of Scotland Plc and CLSA Ltd. The government estimates that about 800,000 Filipino workers at home and overseas may be displaced by the global slump as companies including Intel Corp. and Wal-Mart Stores Inc. slash jobs.

Remittances by the more than 8 million citizens working abroad account for about 10 percent of the $144-billion economy.

Remittances are considered an integral part of the Philippine economy because they fuel consumer spending. The central bank expects remittances to stay flat this year at $16.4 billion.

The growth in remittances marked the second straight month that it was below 1 percent, indicating that the global recession was beginning to impact on workers’ earnings.

The central bank said in a statement that remittances from sea-based workers increased, offsetting the impact of the contraction from land-based earners, mainly in the United States.

The central bank said deployment had slowed down since November, even contracting 5.8 percent in December. Preliminary data, however, showed that the number of Filipinos who left for jobs overseas rose 25.3 percent on year to 165,737 in January.

“While there are mounting concerns about the effects of the recessionary conditions in the global economy on the continued employment of Filipino workers abroad, latest data on overseas deployment for January 2009 provided some optimism for stability if not a pick-up in remittances next month,” the central bank said. “The double-digit growth in the number of deployed OFWs is expected to add to the base of potential remitters moving forward.”

The central bank said the Philippine Overseas Employment Administration had reported employment opportunities in Canada, Australia, Japan and selected countries in the Middle East, like Qatar, in which the Philippines signed hiring agreements.

The central bank said the Labor Department had sent teams in host countries affected by the crisis such as South Korea, Taiwan and the United Arab Emirates to help displaced Filipinos find alternative jobs within the same country or region. Eileen A. Mencias, with Bloomberg

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