Barclays sees 10% growth in OFW remittances this year

MANILA, Philippines – Investment bank Barclays Capital sees the amount of money sent home by Filipinos abroad growing by double-digit level this year due to a strong demand for skilled Filipino workers and the recovering global economy.

In a study, Barclays Capital said overseas Filipino workers’ (OFW) remittances would grow by 10 percent this year due to the steady improvement of the country’s economic conditions.

The growth forecast of Barclays Capital was more optimistic than the six percent growth forecast set by the Bangko Sentral ng Pilipinas (BSP).

The investment bank also expects the country’s domestic output as measured by the gross domestic product (GDP) expanding by 4.3 percent or higher than the projected growth of 2.6 percent to 3.6 percent set by economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC).

“We expect remittances to rise by 10 percent through 2010 given strong deployment last year and the improving global outlook, with our annual 2010 GDP projection being 4.3 percent,” Barclays Capital added.

Latest data from the BSP showed that OFW remittances went up by 7.7 percent to $2.785 billion in the first two months of the year from $2.585 billion in the same period last year due to continued strong demand for professional and skilled Filipino workers combined with favorable global employment opportunities.

Remittances from sea-based workers went up by 13.4 percent while that of land-based workers increased by 6.4 percent during the two-month period. Major sources of remittances in January and February were the US, Canada, Saudi Arabia, Japan, UK, Singapore, United Arab Emirates, and Italy. These countries accounted for the bulk or 82 percent of the total inflows reported by local banks.

Data from the Philippine Overseas Employment Administration (POEA) showed that the total number of deployed overseas workers for the full year 2009 posted a year-on-year growth of 15.1 percent to 1.422 million from 1.236 million in 2008.

Of the total deployed overseas workers in 2009, more than three-fourths were land-based, of which about 68 percent were rehired workers. The number of rehired workers rose by 24.3 percent to 742,447 as a result primarily of the government’s job generation and facilitation programs to help displaced overseas workers find alternative jobs in emerging markets and in countries that are not severely affected by the global financial meltdown.

Last year, remittances went up by 5.4 percent to a new record level of $17.348 billion last year from $16.426 billion and exceeded the revised four percent growth forecast set by the central bank due to the steady growth of OFW remittances to the sustained demand for skilled Filipino workers overseas particularly engineers, medical practitioners, and teachers. –Lawrence Agcaoili (The Philippine Star)