Remittances grew 5.6% to $17.35B in ’09

MANILA, Philippines--REMITTANCES SENT TO THE PHILIPPINES grew faster than expected in 2009 in what monetary officials said was proof that demand for Filipino labor did not shrink despite the worst of the global crisis.

Money sent by Filipinos abroad reached $17.35 billion last year, registering a 5.6-percent growth from the $16.43 billion the previous year, the Bangko Sentral ng Pilipinas reported yesterday.

The growth in remittances outpaced the BSP’s own forecast of only 4 percent. It also proved wrong earlier predictions that money from Filipinos overseas would shrink by as much as 30 percent because of layoffs and company closures in countries that fell into a recession, including the United States.

In December alone, remittances amounted to $1.58 billion, up 11.4 percent from the $1.41 billion recorded in the same month of 2008.

BSP Governor Amando Tetangco Jr. earlier said remittances managed to grow despite the crisis because layoffs in some countries were offset by hirings by companies in alternative labor markets.

Bernardo Villegas, economics professor at the University of Asia & the Pacific, earlier said Filipinos who lost their jobs because of the crisis did not go home but instead sought new jobs offshore.

The behavior of Filipinos was unlike other migrant workers who immediately went back to their home countries after being laid off. Villegas added that some foreign companies prioritized Filipinos in deciding which of their employees to retain.

Remittances are a closely watched economic indicator as these largely fuel household consumption that, in turn, serves as a key driver of the economy.

Economic managers said the sustained rise in remittances was one reason the Philippines avoided a recession last year. The Philippine economy, as measured by the gross domestic product (GDP), grew 0.9 percent in 2009.

For this year, the BSP expects remittances to grow 6 percent from the 2009 level. - By Michelle Remo, Philippine Daily Inquirer, February 15, 2010