4-month OFW remittances up 10.8%; April growth down

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4-month OFW remittances up 10.8%; April growth down
Posted: 0:41 AM Jun. 16, 2006
Doris C. Dumlao
Inquirer

FOR the first time in 17 months, the growth in overseas Filipino workers' (OFWs') income remittances fell below double-digit levels at 0.34 percent in April to $899 million from a year as the number of new workers deployed abroad decreased, the central bank reported Thursday.

Since November 2004, monthly OFW inflows posted double-digit growths year-on-year and hit an eight-year high of $1.04 billion last March, up 15.6 percent from a year earlier.

"Nonetheless, the cumulative January-to-April remittance level of $3.7 billion posted a double-digit growth of 10.8 percent compared to the same period last year and the 10-percent growth projected for 2006," said Governor Amando Tetangco of the Bangko Sentral ng Pilipinas (BSP, the central bank).

Citing preliminary data from the Philippine Overseas Employment Administration (POEA) on new hires and rehires, Tetangco said the total number of deployed workers during the four months fell 2.7 percent year-on-year to 359,402.

The number of land-based workers, who made up 74.7 percent of total new deployment, dropped 5.8 percent to 268,637. Sea-based workers increased eight percent to 90,765.

"Partly compensating for the effect of the contraction in the number of deployed workers was the sustained aggressive marketing campaigns conducted by local banks such as client giveaways, better offered rates, increased visibility through product brochures, efficient modes of money transfers such as Internet/online banking, phone banking, bills payment services and increased remittance centers and tie-ups abroad," Tetangco said.

"These bank initiatives offered overseas workers with a wide array of instruments/facilities for faster means of remittance transfer to beneficiaries," he said.

The major sources of remittances were still the United States, Saudi Arabia, Italy, Japan, Hong Kong, and the United Kingdom.

Bankers said OFWs were remitting money in installments, or whenever needed by their beneficiaries, instead of sending it in bulk.

The BSP expects OFW remittance growth of 10 percent this year as against the 25 percent recorded last year, because of certain global risks, such as stricter implementation of anti-money-laundering measures and immigration policies in First World countries.

The World Bank's Global Development Finance (GDF) publication says worldwide remittance flows -- comprising remittances by overseas workers from different countries, compensation of employees, and overseas workers' money transfers -- exceeded $233 billion in 2005, of which $167 billion went to developing countries.

According to conservative estimates, total flows, including those coursed through non-bank channels, could be higher by 50 percent, the GDF says.

"Recently, high oil prices have swelled remittance flows from oil-exporting countries," it says. "Bahrain, Kazakhstan, Kuwait, Oman, Saudi Arabia and the Russian Federation have been important sources of remittances to developing countries."

The GDF 2006 also says the depreciation of the US dollar, which raised the value of remittances when converted into local currencies, and the increase in overseas workers and their incomes had contributed further to the surge in these remittances. With INQ7.net