OFW remittances down 5.9 % in Jan

Remittances from overseas Filipino workers (OFWs) fell by almost six percent to $618 million in January from $657 million in the same period last year, Bangko Sentral ng Pilipinas (BSP) managing director Diwa Guinigundo reported yesterday.

The fall in remittances was despite a 23.3 percent year-on-year improvement in OFW deployment, Guinigundo said.

OFW remittances in 2003 rose 6.3 percent to $7.6 billion from $7.2 billion in the previous year.

For this year, OFW remittances are projected to rise by three percent to $7.8 billion, the BSP said.

The BSP said the volatility of the foreign exchange rate could have encouraged OFWs to delay dollar remittances in anticipation of a further depreciation of the peso against the dollar.

BSP Governor Rafael Buenaventura, however, said that low remittances in the early months of the year was usual since OFWs normally remit more during the holiday season and right before the opening of the new school year in June.

Buenaventura said the BSP did not expect remittances to seriously pick up until May to June.

According to the BSP, preliminary data indicated that new hires and rehires showed that the country’s OFW force reached a total of 118,879 in January 2004, up from only 98,435 last year.

The number of land-based OFW reported an increase of 28.7 percent while sea-based workers continued to decline. Land-based workers comprised mainly of professional and technical workers, service and production-related workers.

The BSP said this trend was considered positive since trained and skilled workers tended to earn more than unskilled workers.

The BSP said most of the country’s OFWs went to the US, Saudi Arabia, Hong Kong, Singapore and Japan.

The BSP, however, has been expressing alarm over the overall decline in the deployment of Filipino workers overseas, warning that other countries will soon overtake the Philippines in the international labor market.

The country has been heavily dependent on remittances from overseas Filipino workers (OFWs) and heavy competition from countries like India, Malaysia and Indonesia could prove disastrous.

According to the BSP, the deployment of OFWs have been slowing down since 1999 and last year, a drastic 8.88 percent decline has been recorded for the period between January and September.

Guinigundo said that although Filipino workers are still competitive, other countries are moving into the labor market with doubled efforts and systematic development strategies intended to grab market share.

Moreover, the traditional destinations in the Middle East have been nationalizing their labor markets while European countries have become even more restrictive against immigration.

As a result, the deployment of Filipino workers have slowed down to a 0.65 percent growth rate in 1999 and 0.55 percent in 2000. There was a 3.04 percent increase in 2001 but this slowed down to 2.8 percent in 2002. By this year, deployment has declined dramatically by 8.88 percent during the first nine months of the year.

Consequently, there was also a continuing decline in remittances which fell 7.78 percent in 1999 and plunged by 10.95 percent in 2000. There was a slight recovery in 2001 but the total still fell by 0.32 percent.