OFW remittances jump 17% to $3.1-B in Jan-Apr

OFW remittances jump 17% to $3.1-B in Jan-Apr

The Philippine Star 06/16/2005

Cash remittances from overseas Filipino workers (OFWs) coursed through the banking channels rose anew last April, pushing the total amount in the first four months up by a hefty 17.2 percent to $3.1 billion, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

In April alone, remittances sustained a double-digit growth trend with $790 million in inflows, higher by 19.1 percent from a year earlier.

BSP officer-in-charge Amando Tetangco Jr. said three factors primarily drove the growth in dollar remittances during the period: increased worker deployment; the onset of school enrollment; and the aggressive promotion by banks of their respective remittance services.

Tetangco noted that the continued deployment of higher-paid workers abroad such as nurses, engineers and musicians resulted in a similar rise in remittances. "The preference for Filipino mariners also contributed to the higher level of remittances during the period."

Based on data from the Philippine Overseas Employment Administration (POEA), both land-based and sea-based workers posted double-digit growth in deployment last April. In terms of skill, the POEA said most of the new hires consisted largely of service workers (42.7 percent), professional/technical workers (29.4 percent), and production workers (24.1 percent).

The bulk of remittances continued to originate from the US, Saudi Arabia, Italy, Japan, UK, Hong Kong, Singapore and the United Arab Emirates.

Tetangco added the increased transfers by OFWs to their beneficiaries to defray school enrollment expenses also contributed to the higher level of remittances during the period.

He pointed out that the vigorous campaign by local commercial banks to encourage OFWs to utilize the formal mode of fund transfers through promotional campaigns, increase in the number of remittance centers, and arrangements with foreign financial counterparts resulted in the better capture of OFW cash remittances.

In the past, the BSP estimated that the banking system was capturing only about 70 to 80 percent of all OFW income being remitted to their families in the country.

Since then, however, Tetangco said banks have been aggressively competing for the remittances of OFWs, encouraging more inflows through the banking system and away from traditional door-to-door couriers.

The surge in OFW dollars was part of the reason the BSP upgraded its projected balance of payments (BOP) surplus for this year from $464 million to $852 million.

The BSP earlier said OFW remittances could reach $9.4 billion this year and could possibly go up to as high as $12 billion including the inflows not captured by the banking system.

The BSP said that based on its updated estimates, the combined impact of higher dollar inflows and the shift in accounting policies would increase the BOP surplus by almost $400 million this year.