MONEY - TOP STORIES
January 16, 2007
Updated 03:28:30 (Mla time)
Inquirer
OVERSEAS Filipino workers (OFWs) sent home $11.44 billion in the first 11 months of 2006, an all-time high, up 17.6-percent from the same period in 2005, the central bank reported Monday.
In November, the money remittances amounted to $1.14 billion, up 27.8 percent from a year earlier, keeping the monthly level at the $1 billion for the seventh straight month.
There is a strong possibility that the full-year 2006 total will exceed the central bank’s projection of $12.3 billion, said Governor Amando Tetangco Jr. of the central bank, Bangko Sentral ng Pilipinas (BSP).
“The strength of remittances during the 11-month period may be attributed to the continued preference for Filipino workers by host countries and improved financial services made available by banks and other non-bank remittance channels,” Tetangco said.
The remittances came mainly from the United States, the United Kingdom, Saudi Arabia, Italy, Japan, Canada, Hong Kong, the United Arab Emirates, Singapore and Taiwan.
Citing preliminary data from the Philippine Overseas Employment Administration on new hires and rehires, Tetangco said the number of OFWs deployed from January to November reached 1.04 million, up 12.8 percent from the same months in 2005. Land-based workers increased 13.8 percent to 786,687 and sea-based workers, 9.8 percent to 250,447, he said.
“It is expected that the demand for Filipino workers will continue to be strong given the country’s large pool of skilled and professional human resources,” Tetangco said.
“Banks, meanwhile, continued to serve as efficient and preferred channels of remittance transfer due to their introduction of innovative financial services, such as Internet/on-line banking, phone banking, bills payment arrangements, as well as their competitive service fees and conversion rates,” the BSP chief added.
Tetangco said banks, private remittance companies and other formal remittance agents were focused on setting up improved infrastructure mechanisms to increase the number of remittance centers and strengthen tie-ups abroad.
“These initiatives are expected to facilitate faster and easier transfer of remittances by OFWs to their beneficiaries,” he said.
The increasing shift by OFWs away from informal channels, especially given the steady decline in remittances charges by banks, is also seen to further increase the flows coursed through the banking system.
In 2005, the BSP assumed in its computation of the country's international payments that 20 percent of OFW money remittances were done outside of the banking system and flowing instead through informal channels, defined as unlicensed or unregulated operations such as friends, acquaintances or other travelers. This so-called leakage in the OFW remittance flows dropped to 10 percent in 2006 and is expected to fall to five percent this year, according to the latest BSP estimates.
An earlier study on the Mexican experience showed that remittances held as deposits in the banking system would yield a beneficial multiplier effect of between two to three times as these could be channeled to investments, including small and microbusinesses. As such, the BSP is promoting the use of formal banking channels as a safer and more productive cash remittance system for millions of Filipinos working abroad.
Through the years, OFW remittances have made the Philippine economy more resilient to shocks that could otherwise affect growth, inflation, external accounts and employment. In terms of employment, for instance, the ratio of jobless Filipinos would have doubled to 20 percent from the current 10 percent if all OFWs remained in the country instead.
In the first nine months of 2006, cash remittances from OFWs accounted for 17.8 percent of total current account receipts and about 10 percent of gross national product. By Doris C. Dumlao, with INQUIRER.net
http://services.inquirer.net/express/07/01/16/html_output/xmlhtml/20070116-43627-xml.html
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