BSP rues scuttling of OFW bonds sale

 

By Jun Vallecera

Reporter

THE flow of remittances from overseas Filipino workers surged past the $1-billion mark for the ninth month in a series, totaling $1.1 billion in January. The strong flow raised the likelihood of the full-year number to lift by at least 10 percent to around $14 billion and escalating the need to find practical uses for that much money sloshing around, its vast economic potential untapped. Last year’s OFW flows totaled $12.7 billion, but that much money was not of much use either, as the plan to sell a remittance-backed bond for the exclusive benefit of OFWs and their families was scrapped. Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the aborted bond sale would have made available an attractive investment option for OFWs likely to spend hard-earned money on consumer goods. Less than half of all OFW families set aside a portion of their money as savings and those that actually take the trouble to do so do not know where to invest that money for maximum economic impact. Tetangco said had counterparts in government listened to them one or two years earlier when they first saw the uptrend in OFW remittances, some form of investment instrument could have been in place by now, benefiting not just OFWs and their families but the entire economy as well. “But that was then, when interest rates were higher, making the bonds potentially more attractive to investors,” he said of the missed chance. Domestic interest rates at present stand at some 3 percent, give or take a few percentage points—not enough incentive considering that inflation stood at 2.6 percent a month ago. Tetangco traced the one-billion-dollar level-busting remittance flow to the aggressive marketing efforts of banks and money transfer agents that provided OFWs greater access to financial services that were not possible before. He noted there was even a drop in OFW deployment in January, with data from the Philippine Overseas Employment Administration showing only a deployment of 96,359 or 7.1 percent lower from year ago level.  “Both the number of land-based and sea-based workers contracted by 3.4 percent and 21.1 percent to 79,408 and 16,951, respectively,” Tetangco said. Still, the remittances grew because the deployed OFWs were better skilled than their predecessors and better paid that ever before, he added. The deployment of skilled Filipinos was seen to rise in the months ahead as these workers train for employment in high-end jobs in the field of information technology, telecommunications and tourism, among others, Tetangco said.

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