OFW inflows hit record high of $12.8B in 2006

By Des Ferriols
The Philippine Star 02/16/2007

Remittances from overseas Filipino workers (OFWs) surpassed all expectations for 2006, reaching a total of $12.8 billion for the year on the back of a record high level of $1.3 billion in December.

The Bangko Sentral ng Pilipinas (BSP) reported yesterday that the full 2006 remittances from OFWs was $500 million higher than the projected total for the year.

Compared to the total OFW remittances that went through banks in 2005, the BSP said the 2006 record was 19.4 percent higher.

The strongest inflow thus far came in last December, reaching $1.3 billion and rising by 37.2 percent compared to the year-ago level.

"This is also the highest monthly remittance level ever recorded thus far," the BSP said in its yearend remittance report.

According to the BSP, the strength of cash remittances has been traced to two major factors that have kept monthly OFW inflows in excess of the billion-dollar level for eight consecutive months last year.

BSP Governor Amando M. Tetangco Jr. said throughout 2006,more Filipino workers were sent abroad and 97 percent of them sent money through banks.

He said financial institutions have been aggressively providing innovative services to make it easier and cheaper for OFWs to channel their money through banks.

Preliminary data from the Philippine Overseas Employment Administration (POEA) indicated that in 2006, new hires and rehires showed annual deployment reaching 1.1 million. This reflected a 10.5 percent year-on-year growth.

By type of worker, the POEA reported that the number of deployed land-based workers was higher by 12.2 percent at 831,318 while the number of sea-based workers went up 5.2 percent to 260,737.

There are now more than eight million Filipinos working overseas, or nearly a tenth of the country’s population.

According to Tetangco, the demand for OFWs is expected to increase further as the government made deployment a priority program, intensifying its human resource development and training programs for potential workers.

The government has intensified its efforts to increase the export of labor, funding programs geared at improving Filipino workers’ competitive advantage over those from other labor-providing countries. 

On top of the increase in labor deployment, the BSP said banks and non-bank remittance companies have been competing intensely to make remittances faster, safer and more efficient.

Specifically, remittance channels have improved the platform for remittances through adoption of advanced systems and new technologies such as Internet/online banking, phone banking and through short messaging system.

The BSP said banks have also developed enhanced and expanded financial products and services to attract OFWs such as bills payment arrangements, international money/cash cards, remittance network expansion and new correspondent remittance agreements with host countries. 

"The link-up of the three major ATM networks also facilitated the access by beneficiaries to the formal channels of remittance transfers," Tetangco said.

The bulk of OFW remittances still came from the US, Saudi Arabia, Canada, Italy, the United Kingdom, Japan, the United Arab Emirates, Hong Kong, Singapore, and Taiwan.

http://www.philstar.com/philstar/news200702160701.htm