More OFWs in Middle East to boost remittances

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) said it is likely for remittances to actually grow in the second half of this year, with the anticipated increase in labor deployment to the Middle East.

Returning from a trip to the Kingdom of Saudi Arabia, BSP Deputy Governor Diwa Guinigundo told reporters yesterday that the employment prospects in the area remained strongly in favor of Filipino workers.

Speaking at the sidelines of the 30th National Conference of Employers yesterday, Guinigundo said there would be an increase in the deployment of workers in the Middle East, particularly Saudi Arabia.

“There are major development projects rising in Saudi Arabia,” Guinigundo said. “They are building five to six mega cities there and employment opportunities are strongly in favor of Filipino workers.”

With the rise in deployment, Guinigundo said there is “enough cause for optimism” for remittance inflows in the second half of the year.

According to Guinigundo, the BSP’s flat-growth projection for 2009 was based on deployment data in late 2008 and there would be a need to review these projections in the second half when deployment is likely to have a positive impact on remittances.

Guinigundo said the 7.5-percent decline in remittances by the International Monetary Fund (IMF) is likely an underestimation of inflows that have historically defied projections.

Guinigundo said that in Jeddah alone, there were development projects of about $45 billion which would mean more jobs.

“We visited one construction company in Riyadh employing about 7,000 workers and 40 percent of that are Filipinos,” Guinigundo said. “They have jobs waiting for more workers and these are not just construction workers but engineers as well.”

Even in the Middle East, Guinigundo said there is a growing preference for highly-skilled Filipinos which meant higher inflows in terms of remittances back to their families.

“Personally, with the information I have, a decline in remittances is unlikely,” Guinigundo said.

“There is also cause for optimism for the second half of the year when we will have to review our numbers.”

The projected decline in remittances from overseas Filipinos was the underlying reason for the expected slowdown in private consumption this year — the one factor that has so far kept the country’s economy afloat despite previous slowdowns

This year, however, the IMF said even remittances are likely to be hard hit by the global recession that the Fund was the worst since the Great Depression in the early 1930s.–Des Ferriols, Philippine Star