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, according to the Bangko Sentral ng Pilipinas.
In November alone, OFWs’ 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.
Thus, it’s almost a foregone conclusion that the full-year remittances would exceed the BSP’s $12.3-billion forecast. And that excludes money sent through informal channels like friends, relatives and door-to-door courier services.
“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 nonbank remittance channels,” according to BSP Gov. Amando Tetangco Jr.
The remittances came mainly from countries with large communities of Filipino expatriates—the United States, the United Kingdom, Saudi Arabia, Italy, Japan, Canada, Hong Kong, United Arab Emirates, Singapore and Taiwan.
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.
Meanwhile, banks continued to serve as efficient and preferred channels of remittance transfer due to their introduction of innovative financial services, such as Internet/online banking, phone banking, bills payment arrangements, as well as their competitive service fees and conversion rates.
To attract more remittances, banks, private remittance companies and other formal remittance agents are 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,” Tetangco said.
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.
The bottom line is, OFWs, through their remittances do not only keep the economy afloat, but are now driving growth. Their role in the national economy has grown a lot from saving the country from collapse during the early 80s.
That’s the good news. The bad news, according to the Ibon Foundation is that the Philippines’ heavy dependence on remittances reflects a lack of domestic fiscal capacity and domestic employment opportunities.
“The sheer scarcity of jobs is already a sign that all is not well and that the economy lacks an internal dynamism that is able to productively harness and employ the Filipino workforce,” Ibon research head Sonny Africa said.
“The declines in domestic investment imply a diminishing capacity to expand production and warn of a slowdown in the very near future,” he pointed out.
Export of labor was a people’s initiative (not the recently junked people’s initiative to change the Constitution) launched during the ’70s when the Middle East countries discovered their oil-based power and their need for skilled manpower.
Today, OFWs are no longer considered as a phenomenon that will fade after a short while. It is still driven by the demand for skilled manpower in countries with a lot of cash but not a lot of skilled labor, but now, demographic changes come into the future. The aging populations in wealthy countries like Japan, which are suffering from zero or very low birth rates, are creating more demand for Filipinos in new job categories—nursing and care-giving—which offer higher salaries than domestic jobs or construction workers.
As long as the global demand for Filipino workers grow, our leaders need not worry about other adverse factors. The Philippines’ modern-day heroes will continue to fuel the national economy.
E-mail at raulbvalino@yahoo.com.ph.
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