Remittances hit record high in May, BSP says

RUBY ANNE M. RUBIO, GMANews.TV
Article posted July 15, 2009 - 06:11 PM

MANILA, Philippines - Money sent home by Filipinos working abroad reached a monthly record high in May this year, as demand for skilled labor continued to be steady, the Bangko Sentral ng Pilipinas (BSP) said.

Remittances for May this year reached $1.48 billion, 3.66 percent from $1.43 billion in 2008, breaching the previous monthly record set in March worth $1.47 billion.

The latest figure brought the total five-month cumulative remittance at $6.98 billion, 2.8 per cent higher than the $6.79 billion reported during the same year.

Besides citing steady demand for Filipino labor, the BSP said that the hike in remittances was also the result of “expanded access of overseas Filipinos and their beneficiaries to a wide range of financial products and services offered by banks and other financial institutions."

United States, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy, and Germany were major sources of remittances during the January-May period with remittances from sea-based and land-based workers growing by 4.6 percent and 2.4 percent, respectively.

Remittances “continued to show signs of strength despite lingering global economic fragilities, providing some basis for cautious optimism regarding steady remittance levels for 2009," BSP Governor Amando M. Tetangco, Jr. said in a statement.

Demand for Filipino workers is expected to hold up as a result of hiring agreements forged between the Philippines and some host countries such as Qatar, Saudi Arabia, Canada, Australia and Japan, the BSP said.

Manila also entered into a bilateral agreement with Seoul with labor departments of both countries approving a hiring agreement.

Meanwhile, the Philippine Overseas Labor Office in Tripoli has started talks with the Libyan Health Ministry for the recruitment of about 4,000 Filipino medical workers in the North African country.

"Despite the relatively weak global economic environment, the Philippine government’s intensified efforts [such as employment facilitation programs] to assist retrenched overseas workers have contributed to the deceleration in the rise in the number of displaced OFWs," the BSP said.

For its part, New York-based GlobalSource said that remittances may slow further and possibly decline by three percent, citing its latest estimates as indicated in its July 10 report.

In April, the think tank said that remittances may be unaffected by the crisis since Filipinos abroad are employed in relatively recession-proof sectors such as healthcare, education, and government service, especially in the US.

It also said that Middle Eastern economies – particularly Saudi Arabia – continue to be resilient, helping sustain demand for Filipino labor.

Pump-priming efforts around the world have also been identified as among the reasons why Filipino workers will continue to the deployed abroad.

"…a drop in remittances, if it happens, will not be immediate and may be masked by a repatriation of savings and lump-sum benefits or, as we are learning, by a twist on the 'flight-to-safety' theme where a chunk of the inflows comprises accounts seeking safer shores [i.e. not current income]," GlobalSource authors Romeo Bernardo and Margarita Gonzales said.

GlobalSource is also looking at a stronger peso by yearend at P47.90 per dollar from an earlier projection of P49.

In its Market Call report in June, First Metro Investment Corp. and University of Asia & the Pacific said sustained demand for our migrant workers in different countries continues to help keep up these inflows of OFW remittances.

"Moreover, with the government’s employment deals with several countries in need of our workers – the risks from the continuing global economic recession affecting the remittances are being tempered," the report said.

Under the Japan-Philippines Economic Partnership (JPEPA), an additional 273 health workers have already been deployed in May, the June Market Call report said.

“Even the rise in retrenchments of OFWs has abated. And with the OFWs and the recipients of remittances having easier access to expanded and enhanced remittance-linked services, the inflows of OFW remittances can be sustained," it added. - GMANews.TV