OFW remittances up 22% to $5.8B

Remittances from overseas Filipino workers (OFWs) surged by 22.1 percent to hit $5.8 billion in the first seven months of the year from $4.7 billion a year ago, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

For July alone, remittances rose by nearly 26 percent to $885 million from $703.9 million in the same period last year.

Repatriated funds, which make up a tenth of the economy, reached a record $8.54 billion in 2004.

The National Economic and Development Authority (NEDA) expects remittances to rise to $12 billion this year.

BSP officer-in-charge Diwa Guinigundo said the continued rise in remittances was due to an increase in the number of deployed Filipino workers and the sustained efforts by commercial banks to provide banking assistance to OFWs.

Filipinos who found work abroad rose 5.2 percent to 599,196 in the first seven months, data from the Philippine Overseas Employment Administration show.

About 7.4 million Filipinos work as nurses, caregivers, entertainers, seamen, doctors and domestic helpers outside a country where 3.99 million, or 10.9 percent, of the labor force is unemployed.

Filipinos in the US, Saudi Arabia, Italy, UK, Hong Kong, Singapore and United Arab Emirates accounted for most of the remittances.

Guinigundo said the continued demand for Filipino workers abroad also reflects the comparative advantage of OFWs in terms of skills. 

The BSP official said this can be attributed in part to the government’s training assistance to OFWs aimed at further advancing human resources development, as well as reinforcing employability and competence (e.g., computer literacy, seafarers’ training and education with new maritime equipment and training facilities).

According to Guinigundo, commercial banks, meanwhile, remained aggressive in their campaign to provide assistance to the growing number of Filipino workers abroad.

He said banks have worked out the introduction of enhanced modes of remittance transfers.

The commercial banks, he said, are also pushing for the establishment of more remittance centers, and strengthening of arrangements with foreign financial institutions and collection agents to facilitate fund transfers of OFWs.  

Moreover, the granting by the Saudi Arabian Monetary Agency (SAMA) of a license to one bank in Saudi Arabia in lieu of the closed money exchange companies — a move meant to address money laundering problems — likewise contributed to the increase in remittances as transactions were coursed through the banking channels.