According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest Industry Trends, a regular publication produced by IDEA, the total cash remittances continue to flow into the country at record highs. For the year 2011, the World Bank ranked the Philippines third, following India and China, among those countries which acquired the highest remittance inflows as total influx reached US$20 billion.
Moreover, data from the BSP shows that the remittances for the whole of 2012 was recorded at US$21.39 billion, 6.3 percent higher than the US$20.12 billion in 2011. This accounts for about 6.5 percent of the Philippines’ Gross National Income (GNI) and 8.5 percent of the Gross Domestic Product (GDP). In December alone, inflows amounted to US$1.98 billion, which is the highest recorded for the year.
Gleaning over the BSP data however, the influx of remittances is seen as growing at a decelerating rate yearly. In particular, the year 2004 posted the highest growth rate, increasing by 25 percent year-on-year. On the other hand, the year 2008 proved to be the worst year for the industry, not least due to the onslaught of the recession at the time, with a mere 5.6 percent growth, per IDEA.
According to the same published report, the dependence of the Filipino households on the money sent by the OFWs is expected to hold strong as more Filipinos will be deployed abroad during this year: the POEA recently approved 782,201 job permits of Filipino workers filed by foreign employers in countries such as Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Taiwan and Hong Kong.
The sustained growth of remittances over the years has been underpinned by the continuous innovations on the part of banks and other financial institutions which offer remittance services to the Filipino households. Most cash remittances received by Filipino households are coursed through commercial banks. According to the 2011 Survey on Overseas Filipinos (SOF) by the National Statistics Office (NSO), 71.9 percent of the total cash remittances are channeled through banks, followed by financial agencies which account for a mere 4.7 percent of the total, according to IDEA.
During the first half of 2012, PNB disclosed that its remittance volume significantly increased by 29 percent year-on-year. Furthermore, PNB’s market share grew to 19 percent in the first half of 2012 coming from the 16 percent share during the same period last year. Recently, it has launched the Philippine National Bank Remittance Center, Inc. (PNB?RCI) Phone Remit which allows for a faster 24/7 service to remit money through cellular phones, available initially in about 22 states of the United States.
Furthermore, mergers and partnership deals among banks and other financial institutions have been the trend throughout the years to provide more efficient and wide ranging remittance services. Notably, the PNB and Allied Banking Corporation merger was recently approved by the Philippine Deposit Insurance Corporation (PDIC) and the BSP. Last December 2012, the Land Bank of the Philippines signed a partnership deal with Banca Popolare di Sondrio (BPS), an Italian bank, to cater to the needs of the OFWs in Italy by allowing the remitters to transfer funds through the BPS branches. (to be continued)
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