OFW remittances hit record USD10.7 B in 2005

Manila Bulletin Feb 16, 2006 OFW remittances hit record USD10.7 B in 2005

Money sent home by millions of Filipinos working abroad hit a record high of USD10.7 billion last year, giving strength to the peso, making government debt payments cheaper and stimulating spending by consumers. Pushed from the Philippines by poverty and lack of opportunities, around 10 percent of the country’s 85 million people work abroad, often as nurses, nannies, sailors, laborers, musicians and engineers. Their official remittances, sent through banks and other formal channels, rose 25 percent in 2005 from the previous year, the Bangko Sentral ng Pilipinas said on Wednesday. The bulk of the money came from the United States, Saudi Arabia, Italy, Japan, Hong Kong, Britain, the United Arab Emirates and Singapore. "It will continue to grow because of the demand for nurses and caregivers," said the Bangko Sentral ng Pilipinas deputy governor, Diwa Guinigundo. "It may not be replicated, since it is already at its peak, but it will still be in double digits." In December, when Christmas spending accelerates, remittances grew 10.7 percent to USD962 million from the same month of 2004. At USD10.7 billion, last year’s remittances were equivalent to around 10 percent of Philippine gross domestic product and nearly 9.5 percent of gross national product, at current prices. But the total could be at least 20 percent higher if cash sent home with relatives and friends was included, officials have said. The money breathes life into the economy by fuelling consumer spending that accounts for 70 percent of GDP. It also helps shield the Philippines from the full effects of weak exports and agricultural output. Last year’s flood of remittances helped make the peso Asia’s best-performing currency in 2005 with gains of more than 6 percent. The stronger peso makes imports cheaper and eases the burden of the government’s nearly USD76 billion in debt. But it makes Philippine exports more expensive and stings overseas workers by giving them less bang for their buck now, at about P51.50 to the dollar, than when the currency was around P56 in mid-2005 and P53.09 at the end of last year. Although the economy grew 5.1 percent last year and the government expects it to be supported by improved revenues this year, Filipinos continue to emigrate in droves. Preliminary data from the Philippine Overseas Employment Administration showed the number of newly hired and rehired overseas Filipino workers grew 5.2 percent last year from 2004. The exodus of educated people is depriving the nation of some of its brightest and best, particularly in the health sector, where some doctors retrain as nurses to get work abroad. The promise of remittances — money for better food, shelter, education and opportunities — can carry the social cost of fractured families, with one or both parents absent and children drifting into truancy and drugs while being raised by relatives. For those who do leave, the situation abroad can be grim, especially for large numbers of women working as maids, nurses and entertainers. Philippine newspapers frequently report on working conditions in other countries that border on slavery and sexual abuse of female workers. (Reuters)