OFWs send home $1.6B in September: First double-digit growth this year

MANILA, Philippines – Dollar remittances in September posted a double-digit growth for the first time since December last year as overseas Filipino workers (OFWs) sent more money to their loved ones in the Philippines in time for the Christmas season, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Amando M. Tetangco Jr. announced yesterday that remittances posted a double-digit growth of 10.6 percent to $1.6 billion in September from $1.446 billion in the same month last year.

“The double-digit growth registered for the month was the highest during the year,” Tetangco stressed. The last time remittances posted a double-digit growth was in December last year with 11.4 percent.

For the first nine months of the year, the BSP chief reported that remittances increased by 7.8 percent to $13.782 billion from $12.789 billion in the same period last year as the amount of money sent home by sea-based workers increased by 11.4 percent while that of land-based workers went up by 6.9 percent.

“The continued preference for the skills and competencies of Filipino workers combined with the expanding international remittance transfer network of bank and non-bank channels are factors that could explain the steady flow of remittances into the country,” Tetangco added.

The central bank said the expected steady stream of remittances would also draw continuing support from the increasing global network of banks and non-bank remittance centers which have established more tie-ups with foreign financial institutions.

“The expanding presence of remittance banks and non-banks globally has provided overseas Filipinos and their beneficiaries easier access to financial products and services for their money transfer requirements. This has further shored up the stream of remittances that pass through the banking system,” he said.

Data showed that the number of banks’ branches, remittance centers, correspondent banks, and tie-ups increased to 4,392 as of end-September from 3,730 as of end-December last year.

He explained that major sources of remittances that accounted for 84 percent of the total amount of money sent home through banks included the US, Canada, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Singapore, Italy, and Germany.

Data from the Philippine Overseas Employment Administration (POEA) showed that approved job orders for Saudi Arabia, United Arab Emirates, Kuwait, Hong Kong, and Taiwan reached 525,472 in the first 10 months of the year while land-based workers classified as new hires with processed contracts and awaiting deployment surged by 16.2 percent to 320,915 in the first nine months of the year from 276,192 in the same period last year.

“The recruitment and hiring prospects for overseas Filipinos continued to be broad-based across host countries,” Tetangco said.

The POEA said that there is huge demand for Filipino manpower in South Korea for manufacturing, construction, services, agriculture, livestock, and fishing sector as well as Germany which opened its labor market to highly qualified migrant workers to boost its economy.

Furthermore, the POEA added that it has lifted its deployment ban on overseas Filipino domestic assistants going to selected European countries such as Switzerland, Norway, and Denmark.

In 2009, remittances went up by 5.4 percent to a new record level of $17.348 billion from $16.426 billion in 2008 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.

The BSP’s Monetary Board has already upgraded its growth forecast for the amount of money sent home by overseas Filipinos to eight percent instead of six percent due to the strong demand for Filipino skilled workers.

The policy-setting body recently upgraded the country’s projected external payments position and international reserves this year on the back of the sustained growth in merchandise exports as well as the surge in capital inflows to emerging market economies led by the Philippines.

The Monetary Board agreed to raise the projected balance of payments (BOP) surplus to $8.2 billion instead of revised forecast of $3.7 billion this year due to strong export earnings and robust portfolio flows. This is the second time that the BSP’s policy-setting body adjusted the projected BOP surplus from the original target of $3.2 billion on the back of the central bank’s strong foreign exchange operations as well as higher government borrowings.

Latest data showed that the country’s BOP surplus went up by 49 percent to a new record level of $6.54 billion in the first nine months of the year year from $4.403 billion in the same period last year. For the month of September alone, the country’s BOP surplus surged by 401 percent to $3.062 billion from $611 million in the same month last year.

The BOP surplus last September was a record high monthly surplus since the BSP shifted to the new BOP compilation methodology in 1999. The BOP refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world.

The BSP said the country’s GIR would likely range between $54 billion and $55 billion this year or $5 billion higher than the revised forecast of $50 billion. The GIR is the sum of all foreign exchange flowing into the country. This is the fourth time that monetary authorities revised the projected GIR level this year. Originally, the BSP expected the GIR to range between $47 billion and $48 billion but was later raised to a range of $48 billion to $49 billion and recently to $49 billion to $50 billion.

Latest data released by the BSP showed that the GIR stood at a record level of $53.54 billion as of end-September or almost 26 percent higher than the $42.528 billion level booked as of end-September last year and 7.3 percent more than the $49.905 billion registered as of end-August. –Lawrence Agcaoili (The Philippine Star)