BSP says OFW remittances to increase to $13.5b this year

BSP says OFW remittances to increase to $13.5b this year
By Eileen A. Mencias
January 9, 2006
Manila Standard Today
http://www.manilastandardtoday.com/?page=business02_jan09_2006

The Bangko Sentral ng Pilipinas said it expects remittances from overseas Filipino workers (OFWs) this year to hit $13.5 billion, roughly 10 percent more than the estimated $12.3 billion in 2005.

BSP Gov. Amando Tetangco Jr. said demand for Filipino labor, especially in higher-paying jobs like those in the health industry, continues to be strong and shows no signs of tapering off.

OFW remittances have helped the Philippine economy for several years, bringing in much-needed foreign currency.

Remittances, one of the major factors in the recent appreciation of the peso, have also increased consumer spending despite double-digit unemployment levels.

The BSP is working out an incentive program to encourage Filipino migrant workers to tap formal banking channels in sending money home rather than relying on informal means such as the padala system.

Of the $12.3 billion estimated remittances by the more than five million OFWs last year, only $10.7 billion passed through banks and other formal channels, BSP Deputy Gov. Diwa Guinigundo said.

Guinigundo said BSP preliminary estimates show only $12.3 billion of the expected $13.5 billion remittances this year will pass through formal channels.

The BSP has been exerting efforts to bring down the cost of sending money to the Philippines to lure migrant workers tap formal channels.

Despite risks, some have opted for informal channels because it is much cheaper.

Initial discussions raised the possibility of coming up with contests or raffles to encourage Filipinos working abroad to tap banks when sending money home.

The BSP’s program for Filipino migrant workers focuses on four major components: payments and settlements, financial savings and investments, international relations and advocacy campaign. Action plans for the four areas are already being drafted.

The BSP incentive program for OFWs is in response to Executive Order No. 446 signed on July 12, 2005. The EO assigned the labor department to oversee and coordinate the implementation of various initiatives for Filipino migrant workers.