OFW inflows up 6.2% to $1.5 B in February

MANILA, Philippines – Remittances from overseas Filipino workers (OFWs) grew by only 6.2 percent in February, the slowest in nine months, but the Bangko Sentral ng Pilipinas (BSP) remains confident on the resilience of remittances nothwithstanding the tensions in Middle East and North African (MENA) states as well as the disaster in Japan.

BSP Governor Amando M. Tetangco Jr. reported yesterday that remittances went up by 6.2 percent to $1.5 billion in February from $1.41 billion in the same month last year.

However, the monthly growth recorded in February was the slowest since May last year when remittances posted a monthly growth of 6.5 percent. The growth in OFW remittances has likewise slowed down for the third straight month after posting a 10.5 percent growth in November to 8.1 percent in December, 7.6 percent in January, and 6.2 percent in February.

Despite the slowdown, Tetangco said the BSP is confident that remittances would remain robust this year. Monetary authorities expect an eight percent growth in remittances for this year.

“Remittances are expected to remain strong, as the ongoing crises are expected to have limited impact on the overall remittance flows while other labor markets may take up the slack in overseas employment,” he stressed.

In the first two months of the year, the BSP chief said the amount of money sent home by overseas Filipinos climbed 6.9 percent to $2.98 billion from $2.78 billion in the same period last year as remittances from sea-based Filipino workers jumped 12.7 percent while that of land-based workers grew 5.5 percent.

He pointed out that Filipinos in the US, Canada, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, and Italy accounted for 80.2 percent of the total remittances in January and February.

“Remittance flows into the country continued to draw strength from steady demand for Filipino manpower abroad,” Tetangco added.

In fact, the state-run Philippine Overseas Employment Administration (POEA) processed 43,360 job orders for service, production as well as professional, technical, and related workers in the first quarter of the year for deployment in Saudi Arabia, United Arab Emirates, Qatar, Kuwait, and Taiwan.

The BSP chief pointed out that OFWs and their beneficiaries could expect reliable, fast, and cost effective money transfer services as well as other innovative financial products that complement their savings and investment needs with the stronger presence and continuing expansion of the remittance network in strategic locations worldwide.

“These positive developments continue to underpin the resilience of remittances not withstanding the ongoing crises in MENA states and Japan,” he said.

According to him, government efforts on the redeployment of displaced OFWs are being carried out though the Department of Labor and Employment’s Task Force Middle East.

OFW remittances went up by 8.2 percent to a new record level of $18.76 billion last year from $17.35 billion in 2009, exceeding the revised eight percent growth forecast set by the BSP for 2010. Originally, the BSP penned a six percent growth for OFW remittances last year but revised the target due to the strong demand for skilled Filipino workers abroad.

This year, the BSP sees OFW remittances growing by another eight percent to breach the $20 billion level.

However, monetary authorities are now looking at a lower growth due to the impact of the tensions in MENA states as well as the devastating magnitude 8.9 earthquake and tsunami in Japan.

The BSP would review the projected eight percent growth in OFW remittances as well as the country’s projected external payments position including gross international reserves (GIR) and the balance of payments (BOP) this month to take into consideration latest indicators and developments. –Lawrence Agcaoili (The Philippine Star)