OFW inflows hit record $17.35 billion in 2009

MANILA, Philippines – Money sent home by overseas Filipino workers (OFWs) hit a new monthly record high of $1.567 billion in December, enabling the Bangko Sentral ng Pilipinas (BSP) to register a stronger-than-expected growth in remittances for the whole of 2009.

Data released by the BSP yesterday showed that OFW remittances surged by 11.4 percent in December, or $160 million more than the $1.407 billion registered in December of 2008. The amount eclipsed the previous monthly record high of $1.531 billion registered in October 2009.

For the whole of 2009, BSP officer-in-charge Diwa Guinigundo said remittances went up by 5.4 percent to a new record high of $17.348 billion from $16.426 billion in 2008 and exceeded the revised four percent growth forecast set by the BSP for 2009.

“The 2009 level exceeded the BSP’s forecast of $17.1 billion remittance flows or a four percent growth for the year,” Guinigundo stressed.

Major sources of remittances included the US, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy, and Germany.

Guinigundo pointed out that the remittance level accounted for about 10.8 percent of the country’s gross domestic product (GDP) that expanded by 0.9 percent last year from 3.8 percent in 2008.

“Remittances remained resilient amid the recent global financial crisis, providing strong support to domestic demand,” he added

The BSP official attributed the steady growth of OFW remittances to the sustained demand for skilled Filipino workers overseas particularly engineers, medical practitioners, and teachers.

According to him, the stronger-than-expected growth could also be traced to the decision of the Philippine government to conduct bilateral talks with host countries that continue to open up new employment opportunities abroad for Filipinos and to facilitate the hiring of displaced workers who were affected by the global economic difficulties.

Guinigundo said also noted the continued expansion of remittance transfer facilities that has helped capture a large share of the global remittance market.

“The steady remittance flows from overseas Filipinos were underpinned by the continued expansion of bank and non-bank service providers’ international and domestic market coverage to capture a larger share of the global remittance market as well as the introduction of innovative products and services that cater to remitters’ specific needs,” he added.

Commercial banks’ established tie-ups, remittance centers, correspondent banks, and branches or representative offices abroad increased to 4,192 as of 2009 from 3,015 as of 2008.

Data from the Philippine Overseas Employment Administration (POEA) showed that the government processed about 41.6 percent or 221,548 of the total job orders that reached 532,214 last year. These jobs comprised mainly of service, production as well as professional, technical, and related job categories in Saudi Arabia, Qatar, UAE, Kuwait, and Hong Kong.

POEA reported that Middle East countries particularly Saudi Arabia continue to absorb a significant number of deployed OFWs including those that have been displaced elsewhere.

“The geographical diversification of OFWs has also contributed to the resilience of remittance flows,” Guinigundo said.

The BSP was originally looking at a zero growth last year but later revised the outlook to a growth of four percent due to the steady deployment of Filipino workers abroad and the increase access to formal remittance channels.

OFW remittances are expected to grow faster at six percent next year especially with the signing of a memorandum of agreement between the BSP and member banks of the Association of Bank Remittance Officers Inc. (ABROI).

The agreement calls for the use of the central bank’s Philippine Payments and Settlements Systems (PhilPaSS) to send the remitted money to the beneficiaries’ accounts in other banks.

OFW families are expected to save at least P92 million to as high as P922 million due to the faster and cheaper delivery of remittances to the beneficiaries at a lower rate of P50 per transaction instead of the current range of between P100 and P550 per transaction.

This year, the BSP sees OFW remittances growing at a faster rate of six percent. –Lawrence Agcaoili (The Philippine Star)