March remittances hit record high of $1.5 billion

MANILA, Philippines – Remittances from overseas Filipino workers (OFWs) hit a record-high of $1.5 billion in March, bringing the first quarter total to $4.057 billion, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.Despite the record-high level, growth slowed to 3.1 percent from a year ago level.

The slowing growth compares starkly with the 13.7-percent year-on-year rise in remittances which reached a record $16.429 billion in calendar year 2008.

The International Monetary Fund and the World Bank have both warned that remittance flows that equate to 10 percent of the Philippines’ domestic economic output could shrink this year as host nations shed jobs because of the global downturn.

“While concerns remain over the impact of the prevailing global economic crisis on the deployment of Filipino workers abroad,” BSP Governor Amando M. Tetangco Jr. said the data so far “points to sustained demand for workers overseas.”

Tetangco said officials expect a steady increase in labor deployment despite the global economic recession and said this would support a steadily increasing inflow of foreign exchange.

The BSP said the March inflow was the highest level ever recorded since the central bank started monitoring remittances by Filipinos working overseas, breaking the previous monthly record high of $1.45 billion in June 2008.

If historical records would hold, remittances could go even higher in the next two months as workers abroad send more money to their families ahead of the enrollment season.

Over the first three months of the year, the BSP said the growth rate was also significantly slower at 2.7 percent compared with the first-quarter growth rate in 2008 recorded at 13.2 percent.

“Remittance flows continued to be shored up by the steady labor demand for Filipino skills abroad,” said Tetangco, adding that the increase was also attributable to wider access to expanded money transfer services by overseas Filipinos and their beneficiaries.

“While concerns remain over the impact of the prevailing global economic crisis on the deployment of Filipino workers abroad, an assessment of the labor market situation by the labor department points to sustained demand for workers overseas,” Tetangco said.

Tetangco said labor officials reported a 27.3 percent increase in the number of deployed overseas Filipino workers in the first two months of the year. He said there were also an increase in the total active job orders as of 12 May 2009, with almost 37 percent (279,889) processed and 63 percent still to be filled up.

Tetangco said the bulk of the job orders were in the production, services, and professional skill categories. 

The BSP has also pinned its expectations on reported new job opportunities in markets that have not been severely affected by the global financial strains in addition to the labor accords that have been signed between the Philippine government and some host countries such as Canada, Australia, Japan, Korea, and some Middle East countries such as Qatar.

Tetangco said there were also prospective employment opportunities for Filipino workers in Algeria, particularly, in construction projects that would require professional and skilled workers.

Nearly nine million Filipinos live abroad, according to central bank estimates, and the number who signed short-term job contracts rose 27.3 percent from a year earlier in the first two months of the year, he said, without giving the two-month total.

The government had processed the travel and work permits of some 280,000 Filipino workers as of May 12, he added.

The Philippines had reported that more than 6,000 foreign-based workers were sent home last year as factories shuttered, but Tetangco said the latest labour department data “showed that the increase in the number of displaced (workers) has slowed down.”  —-Des Ferriols with AFP, Philippine Star