OFW remittances up
8% in 1st 6 months

By Clarissa S. Batino
Inquirer News Service

MONEY sent by close to eight million Filipinos working overseas grew by eight percent in the first half to 3.88 billion dollars from 3.59 billion dollars a year ago despite a slight decline in inflow in June as the number of overseas workers who left for employment abroad shrunk during the month, according to the Philippine central bank.

In June, OFW remittances slid 0.6 percent to 591.31 million dollars from 594.89 million dollars in the same period in 2002. The June inflow was lower by 21 percent or 159.4 million dollars from 750.71 million dollars in May.

OFW remittances help boost the supply of dollars in the spot market and keep the peso stable.

The Bangko Sentral ng Pilipinas (BSP) said that deployment of Filipino workers overseas was down 13 percent to 69,536 in June from 79,918 in the same month last year. As a result, deployment of new hires and rehires declined by 4.8 percent in the first semester to 460,782 from 484,169 a year ago.

From a forecast of a flat growth, the BSP said it was now expecting overseas remittances to improve by 6 percent this year to about 7.6 billion dollars from 7.2 billion dollars in 2002. The rosier scenario is for OFW inflow to hit the eight-billion-dollar mark.

The central bank said there had been a marked slowdown in demand for land-based workers, thus the decline in the number of deployment.

However, the BSP said that the slowdown affected mostly low-income workers like domestic helpers as the number of caregivers, engineers, performing artists and other high-paying jobs actually increased.

The growth in remittances could be sustained as more Filipinos leave for high-paying jobs, according to a BSP official.

In June, the number of land-based OFWs slid by 17.5 percent to 51,747 from 62,745 while sea-based workers increased by 3.6 percent to 17,789 from 17,173 in the same period last year.

In the first half, the level of land-based workers went down by 7.6 percent to 349,928 from 378,556 in January-June 2002. Sea-based workers grew in number as of June to 110,854, up 5 percent from 105,613 a year ago.

From January to May, the number of caregivers, engineers and performing artists more than doubled on a yearly basis from 4,900 to 10,100 while the number of domestic helpers went down to 20,700 from 27,000 in the same period in 2002.

The level of dollar remittances had picked up from the observed slowdown during the first few months when prospects of employment abroad became less attractive due to uncertainties caused by the US-Iraq war, which was followed by the outbreak of Severe Acute Respiratory Syndrome.

While both concerns have eased, deployment this year remained lower compared to 2002, according to the labor department.

The observed slowdown has prompted the central bank to assume flat growth in OFW remittances this year in drafting its external payments target. Dollar remittances form part of the country's current account, a big component of the balance-of-payments position.

Labor Secretary Patricia Santo Tomas said that as of the first week of July, deployment was lower by about 4 percent compared to the previous year when new hires and rehires who left the country reached 495,000.

Santo Tomas said her department was targeting to deploy a million Filipinos abroad.

In 2002, the Philippine Overseas Employment Administration, sub-agency of the labor department, said the level of freshly hired and rehired reached 891,908 from 867,599 the previous year.

Foreign exchange inflow from overseas workers comprises nearly 85 percent of the country's gross earnings. It normally accounts for the usual half-a-percentage point difference between the gross domestic product and the gross national product.

Commercial banks report about 85 percent of total remittances while foreign exchange firms account for 10 percent of the total. The data on the remaining 5 percent come from offshore banking units.