OFW remittances up 2.5% in January-February despite crisis

MANILA, Philippines – After stalling in January, inflows of remittances from overseas Filipino workers (OFWs) went up by 4.9 percent to $1.3 billion in February, bringing the two-month total to $2.6 billion, or 2.5 percent higher than a year ago level, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Now the most-watched indicator, remittances from overseas Filipinos are widely expected to decline for the first time in history although officials are optimistic that inflows would at least sustain 2008 levels.

The BSP said remittances from sea-based and land-based workers for the two-month period registered increases of 6.1 percent and 1.7 percent, respectively.  

“Remittances have been holding up as deployment of overseas Filipino workers has risen during the first two months of the year while the increase in the number of reported layoffs has slowed down,” BSP Governor Amando M. Tetangco Jr. said.

Tetangco said that based on preliminary data of the Philippine Overseas Employment Administration (POEA), the total number of deployed overseas workers for the two-month period posted a year-on-year growth of 27.3 percent to 283,348 from 222,608 a year ago.

The Department of Labor and Employment (DOLE) also reported that the Philippines planned to renew the labor arrangement with South Korea under the Employment Permit System (EPS).

The EPS would give priority in finding employment to displaced Filipinos working in South Korea. 

In addition, Tetangco said there were hiring agreements forged with some host countries (such as Canada, Australia, Japan and some Middle East countries such as Qatar) that are expected to open employment opportunities.

Philippine officials have been exalting its deployment program that in the past years have been aimed at Filipino workers, training them specifically for the job market abroad in healthcare, education, power/energy, and real estate sectors.

Unable to generate enough jobs domestically, the government has also “intensified its efforts to redeploy retrenched overseas Filipino workers to countries that have not been severely affected by the global financial turmoil.”

Tetangco said specific targets are Saudi Arabia and Libya that continue to hire workers in the construction and healthcare industries.

Tetangco added that more workers could be exported to generate foreign exchange by taking advantage of the relocation in 2010 of the US Naval forces presently situated in Okinawa, Japan to Guam. Tetangco said the relocation could provide job opportunities to Filipino workers.

Largely viewed as recession-proof, wages sent home by overseas Filipinos have been the primary fuel behind the continued increase in consumer spending in the Philippines, providing a considerably large domestic market for manufactured goods.

This year, however, economists have predicted that the retrenchment of workers in economies hard-hit by the global recession would depress remittances and lead to a decline of anywhere between five and 25 percent this year.

Since the Philippines started deploying workers abroad, remittances have steadily increased as the country also deployed more and more of its workers abroad for lack of gainful employment opportunities here.

But the BSP said the resilience of remittances would prevent a decline and Tetangco said that at worst, remittances would record a zero growth rate this year, matching last year’s total inflow of $16.4 billion for the whole year. –Des Ferriols, Philippine Star