OFW remittances accelerate in July

The funds sent home by overseas Filipino workers (OFWs) grew faster in July as the global economy has started to stabilize, the Bangko Sentral ng Pilipinas (BSP) announced Tuesday.

In a statement, the central bank said the remittances coursed through banks grew by 9.3 percent to $1.5 billion in July. This brought the first seven-month figure to $10 billion, or 3.8 percent higher compared with $9.608 billion in the same period last year.

“Given the sustained remittance flows at the onset of the second half of the year and continuing signs of improving global economic conditions, remittances are anticipated to remain stable for the remainder of 2009 and will continue to be a major growth driver of the economy,” BSP Governor Amando Te­tangco, Jr. said.

Personal consumption, which is driven mainly by remittances, accounts for more than two-thirds of the Philippine economy.

In the second quarter, the country’s economy—as measured by gross domestic product (GDP)—grew 1.5 percent, supported by services and agriculture sector. This was an improvement from the GDP growth of 0.6 percent in the first quarter as consumption remained weak from January to March.

As the global economy stabilized, the growth of displaced OFWs decelerated and the demand for the sea-based and land-based workers rose 5.6 percent and 3.4 percent, respectively, the Philippine Overseas Employment Administration (POEA) said.

According to BSP, the major sources of remittances were the US, Canada, Saudi Arabia, UK, Japan, Singapore, United Arab Emirates, Italy and Germany.

Moreover, Tetangco said the expected steady stream of remittances will draw continuing support from the strong deployment of overseas Filipino workers following the employment agreements forged between the Philippines and host countries such as Qatar, Saudi Arabia, Canada, Australia, Japan, South Korea and Taiwan.

Besides these recruitment prospects, the government has started crafting the guidelines on the deployment of overseas Filipino workers to provide the manpower to the massive military base expansion in Guam starting next year.

The greater access of overseas Filipinos and their beneficiaries to remittance transfer facilities have also helped sustain remittance flow.

The BSP said the increase in the number of remittance centers abroad and the establishment of more tie-ups with foreign financial institutions have resulted in greater capture of remittances. The aggressive marketing efforts of banks and nonbank remittance centers to provide enhanced financial services to cater to the various needs of overseas Filipinos are anticipated to further facilitate the flow of remittances.

Earlier, the central bank projected that remittances this year would be at $16.4 billion, the same as last year. — Maricel E. Burgonio, Manila Times