Remittances post record-high level

Remittances from overseas Filipinos reached a record high in May, fed by the need of families or beneficiaries of migrant workers to pay for school expenses.

In a statement on Wednesday, the Bangko Sentral ng Pilipinas (BSP) said that remittances from overseas Filipinos that are coursed through banks grew year-on-year by 3.7 percent to a record high of $1.48 billion in May.

The second highest level was registered at $1.47 billion in March this year.

For the first five months of the year, remittances reached $6.98 billion, representing a 2.8-percent increase from the level recorded during the same period last year.

“The stream of remittances from overseas Filipinos continued to show signs of strength despite lingering global economic fragilities, providing some basis for cautious optimism regarding steady remittance levels for 2009,” Bangko Sentral Governor Amando Tetangco Jr. said.

From January to May 2009, the major sources of remittances were the United States, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy and Germany.

Remittances contribute about 10 percent to the country’s gross domestic product (GDP), an indicator of economic performance.

Steady demand

Tetangco said that steady demand for Filipino workers abroad, specifically professional and skilled workers, continued to support continued inflows of remittances.

Remittances from both sea-based and land-based workers posted gains at 4.6 percent and 2.4 percent, respectively.

Despite the relatively weak global economic environment, the Philippine government’s intensified efforts to assist retrenched overseas workers helped decelerate the rise in the number of displaced migrant workers.

“Demand for Filipino workers is expected to hold up as a result of hiring agreements forged between the Philippines and some host countries such as Qatar, Saudi Arabia, Canada, Australia and Japan,” Tetangco said.

The Department of Labor and Employment reported that the Philippine government entered into a bilateral agreement with South Korea on the employment of Filipino workers.

The Labor department also reported that the Philippine Overseas Labor Office in Tripoli has started talks with the Libyan Health Ministry for the recruitment of about 4,000 Filipino medical workers in Libya.

Meanwhile, bank and non-bank service providers have been expanding their operations overseas and introducing new products and services to overseas Filipinos as well as their beneficiaries in the country.

Tetangco has been optimistic that remittances are unlikely to contract this year.

He said that the Bangko Sentral is keeping its conservative flat growth target this year of $16.4 billion.

But Fitch Ratings Inc. forecast remittances to decline by 6.8 percent in 2009, which implies weak consumption growth for this year.

Fitch projected real consumption spending to grow by 2.8 percent in 2009, slower than the 4.5 percent in 2008 and the 5.8 percent in 2007. –Maricel E. Burgonio, Reporter, Manila Times