Remittances recover, grow by 4.9 percent in February

Published by rudy Date posted on April 16, 2009

Remittances from overseas Filipinos, both from migrants and workers, improved in February, marking a recovery from the virtually flat growth in January, the central bank reported Wednesday.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said remittances grew by 4.9 percent to $1.320 billion in February compared with $1.258 billion in the same period last year.

Remittances in January were only $1.265 billion. That figure was just 0.1 percent higher than the previous year.

Cumulatively, remittances rose by 2.5 percent to $2.585 billion in the first two months of this year compared with $2.522 billion in the same period last year.

“Remittances have been holding up as deployment of overseas Filipino workers [OFWs] has risen during the first two months of the year while the increase in the number of reported lay-offs,” said central bank Governor Amando Tetangco Jr.

The major sources of remittances were the United States, Saudi Arabia, Canada, Japan, United Kingdom, Singapore, Italy and United Arab Emirates. 

Tetangco said remittances would post a flat growth this year from $16.42 billion last year, even with continued deployment of Filipino workers.

There are widespread fears that the global financial turmoil would result in a drop in remittances as countries suffer rising unemployment.

The Philippines is one of the world’s leading sources of skilled and unskilled labor with up to nine million people, or about 10 percent of the population, living and working in 140 countries.

The money they send home has become a pillar of the Philippine economy, making up about 10 percent of the country’s gross domestic product (GDP).

But the country’s GDP growth dipped to 4.6 percent in 2008 supported mainly by private consumption particularly from remittances from OFWs. GDP—the total cost of all goods and services produced in the country in a year—was 7.3 percent in 2007.

Higher deployment

Philippine Overseas Employment Administration (POEA) said total number of deployed overseas workers rose by 27.3 percent to 283,348 in the first two months of this year, up from 222,608 in the same period in 2008.

But the Department of Labor and Employment reported that the Philippines would renew the labor management arrangement with South Korea under Employment Permit System.

The system is expected to be signed this May and would give priority in finding employment to displaced Filipinos working in South Korea.

Also, more countries are open to hiring more foreign workers, particularly Canada, Australia, Japan and some Middle East nations, such as Qatar.

More jobs are expected to open up in several sectors, particularly in health care, education, real estate and power and energy.

Tetangco said the government has also intensified its efforts to redeploy retrenched overseas Filipino workers to countries that are not as severely affected by the global financial turmoil.

Saudi Arabia and Libya—for instance—continue to hire workers in the construction and health-care industries.

Moreover, the relocation in 2010 of the US Naval forces from Okinawa, Japan to Guam could provide job opportunities to Filipino workers.

Tetangco also attributed the remittance growth to the expansion of the remittance network of the commercial banks overseas. 
–Maricel E. Burgonio With AFP

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