OFW remittances up 5.6% in 2009

According to the Institute for Development and Econometric Analysis, Inc. (IDEA), remittances of overseas Filipinos (OF) outgrew government projection of 4%, as it surged by 5.6% to US$ 17.3 billion in 2009. The total amount represents 10.8% of the country’s gross domestic product. The last month of 2009 saw inflow of remittances that is greater than the previous year by 11.4% at US$1.6 billion – the highest in 2009. The sustained demand for Filipino workers overseas and the innovation of financial products and services that cater to the needs of the remitters have strengthened the inflow of international remittances.

Continued deployment of overseas workers was seen in 2009 as there remain countries that were secluded from the effects of the global financial crisis. Government negotiations with other countries to facilitate hiring of displaced workers and to open up new employment opportunities have also contributed to this growth. According to the Philippine Overseas Employment Administration, total approved job orders for 2009 amounted to 532,214.

       Furthermore, the Bangko Sentral ng Pilipinas (BSP) reported year?on?year growth of 11% in deposits in November to P3.4 trillion, enabling local banks to perform their lending and investing functions without spending too much on funding. While demand deposits rose by 16.8%, savings deposits comprised almost half of total deposits, growing at 13.5%. Time deposits increased by 4.1%. Likewise, a BSP?conducted survey of private economists revealed that prices may rise by as much as 4.8% this year, still within the central bank’s target of 3.5?5.5%. Higher prices of global commodities and the low inflation base rates may cause higher inflation, but modest demand and a stronger currency could reduce inflationary pressures, according to Antonio Centura of the BSP’s Department of Economic Research.

However, national government (NG) debt grew by 4.4% year?on?year in November, according to the Treasury bureau. The month posted P4.4247 trillion worth of NG debt, up from P4.2364 trillion recorded in November 2008. Debt owed to foreign creditors stood at 45%, but grew by 7.6% from the preceding year. On the other hand, domestic debt covered 55% of the total and rose by less than 2% from November 2008. With this, the government’s budget deficit fell P500 million short of its optimistic worst?case scenario projection of P298 billion. While government expenditures were lower by P67 billion from its target, revenues deviated by P116 billion away from its goal. Finance Secretary Margarito Teves attributed the budget shortfall to the decline in imports, decrease in asset sales, and revenue?eroding policies.

 Lastly, according to the same published report, the government may trim down its agricultural output target of 5% to 0?2% for 2010, as effects of El Nino continue to cause trouble to farm output. Data from the Agriculture department showed that P2.84 billion of farm sector damage was brought about by the phenomenon, as of February 17. As of February 8, damages were reported to have reached P1.39 billion already.

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