OFW inflows seen to grow 9% this year

MANILA, Philippines – Remittances from overseas Filipinos are forecast to grow by up to nine percent in 2010 as demand for Filipino workers remains strong, a report by First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UAP) said.

Remittances will continue to account for over 10 percent of gross domestic product (GDP), likely offsetting the negative impact of the El Nino weather disturbance on agricultural crops, the report noted.

Remittances in 2009 reached $17.3 billion, 5.6 percent higher than the $16.4 billion level in 2008, and equivalent to 10.8 percent of GDP.

The Bangko Sentral ng Pilipinas (BSP) initially forecast that remittances coursed through the country’s banking system would either contract 0.2 percent or register flat growth in early 2009. But as the first semester resulted in positive growth monetary authorities revised their estimates to a positive two to four percent.

Initial government forecasts now place remittance growth rates from a low six percent to a high nine percent.

The snail-paced recovery of the global economy does not seem to demoralize Filipinos looking for opportunities abroad, the report said.

“In the US, growing numbers of Filipinos are working in white-collar jobs such as accounting and finance, and are still in demand. Filipino seamen are the cream of merchant fleets and some lines are using the shipping recession to replace higher-paid crews with Filipinos. As for the hard-suffering Filipina domestic helpers, spoilt employers have come to depend on them,” the report said.

Complementary to this preference are the efforts of the government to increase job opportunities abroad by talking to host countries and the increase of banking services, which cater to the money transfer needs of these remitters.

Another reason for the robust growth was the job placement of Filipinos across the world. Last year, the top three sources of remittances were the US, Canada and Saudi Arabia. Given this diversification, remittances continued to rise since some of the destinations of these laborers were not greatly affected by the global recession.

In peso terms, remittances grew from 6.4 percent in November to 7.5 percent in December year-on-year. Although the peso still appreciated by 3.5 percent against the dollar, its slower appreciation compared to last month’s 4.4 percent made this possible, the report added.

“We view that overseas Filipinos remittances will continue its growth albeit in single digits, we see that the recovery of the US and the continued construction activity in the Middle East would be the positive factors to this sustained growth. At the same time, the continued strong peso would, unfortunately, significantly mitigate the positive impulse given by these remittances to the domestic economy,” the FMIC-UAP report added. –Ted P. Torres (The Philippine Star)