OFW remittances … substantial expansion of fund transfer every year. - Websitepic
MONEY sent home by Filipinos working abroad last year breached the US$20 billion mark, totaling US$20.1 billion. The amount, the biggest in any single year, is 7.2 per cent higher than in 2010.
Bangko Sentral Officer-in-Charge Juan de Zuniga said that the substantial expansion of fund transfers from Filipinos abroad was due to remittances from both sea-based and land-based workers rising 14.0 per cent and 5.5 per cent, respectively.
Per region, OFs from the Americas sent the most money, totaling US$10.7 billion. The biggest remitters were those from the US who sent back a total of US$8.5 billion.
OFs from the Middle East, the top destination for Filipino workers, only remitted a total of US$3.2 billion, with those from Saudi Arabia sending the biggest amount at US$1.6 billion.
De Zuniga said the remittances of land-based workers accounted for about three-fourths or 78.4 per cent of total remittances.
De Zuniga also said that for the month of December 2011, remittances grew 6.2 per cent, registering the highest monthly level at US$1.8 billion.
He also pointed out that cash transfers from overseas Filipinos that were estimated to be around 9 per cent of GDP continued to be a major contributor in stimulating domestic demand.
"Remittances remained resilient throughout the year amid the political turmoil in some parts of the Middle East and North Africa, the slowdown in global economic growth and intensified financial strains brought about by the euro area sovereign debt crisis," de Zuniga said.
He added that this developed owing to the diversified destinations and skills of overseas Filipinos, the strategic network of bank and non-bank service providers across the globe, as well as the new financial products and money transfer services offered in the remittance market which helped better capture global remittances.
As of end-December 2011, commercial banks' established tie-ups, remittance centers, correspondent banks and branches/representative offices abroad increased to 4,723 (or by 3.1 per cent) from 4,581 at end-December 2010.
Meanwhile, the latest reports from the Philippine Overseas Employment Administration (POEA) showed that for January 2012, 12.3 per cent (or 7,160) of the total approved job orders of 58,123 were processed.
The processed job orders were mainly in the service, production, professional, technical and related job categories, particularly in Saudi Arabia, United Arab Emirates, Qatar, Taiwan, Singapore and Kuwait.
For the period January-December 2011, the major sources of remittances were the US, Canada, Saudi Arabia, UK, Japan, United Arab Emirates, Singapore, Italy, Germany and Norway.
But as the financial crisis in Europe continues to develop, the BSP expects the country's foreign currency reserves and remittances to grow slower this year.
BSP governor Amando Tetangco said that gross international reserves will probably reach US$79 billion and remittances may hit US$21 billion.
The 2012 forecast for GIR means a growth of 4 percent, much lower than the 22 per cent year-to-date growth this year.
For this year, Tetangco said the forecast is US$21.1 billion or a growth of 5 per cent.
Tetangco said that remittances in 2012 would thus continue to support the consumption of Filipino households that has been one of the key drivers of the economy.
The Philippines, with more or less 10 million Filipino migrants, is the fourth-biggest remittance-receiving countries, next to China, India and Mexico.
With the growth in remittances, BSP earlier said that the country's balance of payments (BOP) for 2012 would likely post a surplus to the tune of US$2.8 billion again.
This is, however, less than the estimated US$10 billion for 2011.
Monetary officials said the decline is anchored on expectations that export earnings may drop further as the economic woes in the United States and the eurozone persist, although they are seen to somewhat abate.
The country's BOP has been in surplus for the past six years, meaning that the Philippines has more funds from trade and investments coming in than it pays out to other countries.
GIR indicates the country's ability to service its foreign currency-denominated liabilities, such as payment for imported goods and services, and payment of foreign debts.-- Malaya Business Insight