Money sent by Filipinos working overseas is one of the major contributors to Philippine Economic Growth. It is the largest source of dollar income for the economy. OFW remittances showed a slow growth of only 2 percent in November reaching only a total of $2.12 billion, which is far behind the 7 percent expansion reported in October, according to data from Banko Sentral ng Pilipinas (BSP).
This is its slowest pace since January 2009 or months after the start of the 2008 global financial crisis. During this time, remittance grew by only 0.1 percent. Then from January to November 2014, remittances grew by 5.7 percent to a total of $21.99 billion.
OFW remittance slowed despite the growing demand of Filipino labor abroad based on the government’s worker deployment agency. “The continued deployment of skilled manpower remained a key driver of the sustained growth of remittance flows.” BSP Deputy Governor Diwa Guinigundo said that the slower growth in November could be the result of weaker peso. “What they’re after is the peso value. The tendency is to adjust so the peso value of remittances will be the same. They can afford to send smaller amounts.”
OFW remittances are among the strong drivers influencing the buying behaviour of consumers for domestic consumption contributing over two-thirds of economic output. It ensures a steady supply of foreign currencies that eases import bill costing more that the revenue earned from exports.
ING Bank reported that remittances are expected to grow by 7 percent, while DBS predicts a 6.9 percent growth. Major sources of remittances are the United States, Saudi Arabia, United Arab Emirates, Singapore, Japan and Hong Kong.
BSP further added that based on the data from Philippine Overseas Employment Administration (POEA), job orders for OFWs reached 855,357. A major percentage of the job orders at 38.3 percent are for the following sectors: service, production, technical and related jobs in Saudi Arabia, Kuwait, Taiwan and Qatar.
According to the 2014 survey on OFW’s by the Philippine Statistics Authority (PSA), the number of Filipinos working abroad was estimated at 2.3 million. Overseas Contract Workers (OCWs) or those with existing work contract comprised 96.0 percent or 2.2 million of the total OFWs.
Source: Business Inquirer