Over 2 million Filipinos are working in the Middle East who may be affected by the continued global oil price drop. While the Central Bank data showed OFW remittances increased, there is an impending threat on retrenchment among OFWs in the Middle East.
According to the Department of Finance, the decrease in oil prices did not affect OFW remittances. “So far, the steep drop in crude petroleum prices has not affected Middle East remittances,” Gil Beltran, Finance undersecretary said. However, Beltran added that the Philippine government should diversify the destination of overseas Filipino workers as global oil prices have continued to drop.
From January to November of 2015, remittances have increased by 3.63 percent amounting to $22.83 billion, according to Central Bank. However, this was lower than the 4 percent target last year.
OFWs in the Middle East hold jobs that are ‘socially necessary,’ which means there is lesser chance of job turnovers for Filipino workers. Yet, Beltran pointed out that “reduced concentration could minimize risks from socio-political upheavals and economic instability.” Therefore, it is important to take earlier actions that could reduce future risks.
“The DOLE should be ready with viable options in case the economic crunch starts to bite,” Beltran said.
In Saudi Arabia, a substantial budget deficit has incurred because of oil prices dropping lower than $30/barrel, according to John Leonard Monterona, Regional Director of Migrante Middle East. Monterona said they had been closely observing the economic problems in the Middle East that could affect millions of Filipino workers.
The Middle East is the second biggest contributor of remittances next to the United States. The latter contributed 40 percent of the total in 2015 while the former shared 23 percent. From January to November last year, Middle East remittances grew by 9.6 percent to $5.243 billion. Asia is third on the list with 15.5 percent contribution followed by Europe with 14.5 percent.
“The country should continue exploiting non-traditional markets for deploying OFWs to reduce risks,” Beltran added.