Remittances soar 25% in February

 

 

By LEE C. CHIPONGIAN Remittances from overseas Filipino workers (OFWs) continue to register strong growth as the Bangko Sentral ng Pilipinas recorded $ 1.085 million in February, for an increase of 25.4 percent over the level in the same month last year. Total remittances for the first two months of 2007, amounted to $ 2.184 billion, up 22.55 percent compared to the same period last year of $ 1.562 billion. BSP Governor Amando M. Tetangco Jr. said remittances coursed through banks will grow by 10 percent to $ 14.0 billion this year. "Remittances remained strong even as the number of deployed Filipino workers overseas recorded a decline in the first two months of 2007 from the year-ago level," he said. Based on initial data from the Philippine Overseas Employment Administration (POEA), total deployment declined by 12.1 percent year-on-year to 170,072. Classified by type of worker, the number of land-based and sea-based workers was lower by 10.1 percent and 18.8 percent to 134,644 and 35,428, respectively. BSP said the United States, Canada, the United Kingdom, Italy, Saudi Arabia, United Arab Emirates, Japan, Hong Kong, and Singapore are the major sources of OFW remittances. "It was noted that 47.1 percent of remittances emanated from the US even as more than 80 percent of OFWs are deployed in the Middle East and Asian countries due to the common practice of remittance centers in various cities abroad to course remittances through correspondent banks mostly located in the US," said Tetangco. Banks’ wider network, improved financial services to OFWs and their beneficiaries continue to encourage migrant workers to remit their hard-earned foreign exchange via the formal channels. Tetangco said financial intermediaries, acting as channels to facilitate the delivery of remittances and financial services to OFWs and their beneficiaries, "continued to capture a large segment of the growing remittance market." The banking sector’s share of total remitted funds from OFWs is advancing faster than the central bank has anticipated. From $ 3 billion in 2005, the amount of transactions lost to banks is expected to come down to just $ 1.2 billion. The BSP include OFWs’ non-bank remittances in its accounting of balance of payments figures under personal and transfer accounts. The approximate number is that 10-15 percent of these fund transfers go through the informal channels but the BSP said outside of the BOP estimates, actual non-bank OFW cash is 20 percent of total, while 80 percent are bank transfers. This is expected to increase to 90 percent this year. BSP sees money transfers from OFWs increasing this year after banks channel more of these cash through formal networks and show higher OFW monthly reports. The BSP has been encouraging Filipino migrant workers to send fund transfers through banks, which is cheaper and safer than door-to-door or other informal channels of remitting their hard-earned cash. The BSP also intensified efforts to reduce the cost of remitting funds, which is a positive development for the banking system.

 

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