OFW remittances up 2.8% to $1.4 billion in Aug

MANILA, Philippines - Remittances from overseas Filipino workers (OFWs) went up by 2.8 percent in August on the back of the steady deployment of Filipino workers abroad and the increasing number of remittance centers worldwide, the Bangko Sentral ng Pilipinas reported yesterday.

BSP Governor Amando M. Tetangco Jr. said remittances from OFWs amounted to $1.369 billion in August or $32 million higher than the $1.332 billion recorded in the same month last year.

This brought the cumulative remittances for the first eight months of the year to $11.34 billion, representing a 3.7-percent increase from the $10.94 billion recorded in the same period last year.

This growth comes despite earlier forecasts by the government and international institutions that remittances from overseas workers would be flat or fall this year due to the global financial crisis.

Major sources of remittances from January to August this year include the US, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy, and Germany.

Tetangco reported that OFW remittances continued to underpin the resilience of the economy and has remained a stable source of foreign exchange for the country.

“As recent developments point to improving global economic conditions, a more favorable outlook for remittances through end-2009 is anticipated,” Tetangco said.

The BSP is now looking at a four-percent growth remittances to a $17.1 billion this year from $16.4 billion in 2008.

The BSP which was originally looking at a zero growth in the amount of remittances said the revised outlook would be supported by the steady deployment of Filipino workers abroad and the increase access to formal remittance channels through the establishment of more remittance centers and tie-ups abroad.

“Providing optimism for steady flow of remittances in the months ahead are the employment agreements forged between the Philippines and host countries such as Qatar, Saudi Arabia, Canada, Australia, Japan, South Korea, and Taiwan and the impending major US military base expansion in Guam starting next year,” Tetangco said.

He also cited the recently concluded 4th Joint Labor Council Conference between the Philippines and Taiwan wherein both countries agreed to extend a memorandum of understanding on the Special Hiring Program for Taiwan beyond March 2010.

The BSP chief added that a larger share of global remittance market was captured as commercial banks continued to build up their remittance business partners worldwide.

Likewise, government financial institutions also strengthened their correspondent relationships with remittance companies abroad.

The BSP expects remittances to increase at a faster rate of six percent in 2010 due to the global economic recovery.

Due to robust remittances, the BSP revised upwards the projected gross international reserves (GIR) to a range between $42 billion and $43 billion instead of $37.5 billion and $38.5 billion this year and to $47 billion next year.