OFW inflows surge to $917M in Jan

Filipinos working overseas sent nearly a billion dollars in cash to their families in the country in January, up 16.5 percent from a year earlier, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

January remittances reached $917 million, compared to $787 million a year ago, BSP Governor Amando M. Tetangco Jr. said yesterday.

The BSP attributed the 16.5-percent rise to an increase in the number of overseas workers sending money through banks. It also said more money from overseas Filipinos was being sent for investment purposes.

Informal remittance services have dramatically declined in popularity among OFWs as banks stepped up their aggressive drive to make it simpler, cheaper and easier for OFWs to use banks instead.

"Commercial banks have stepped up their drive to serve the banking needs of OFWs by ensuring faster remittance transfers and expanding their centers and tie-ups abroad," BSP Governor Amando M. Tetangco Jr. said. "Naturally, more OFWs want to use banks instead because they are a lot safer."

The more significant development, however, was the reported increase in the amount of remittances used for direct payments of investments in the Philippines, particularly in real estate.

According to Tetangco, this trend had been noted early on with the pick-up in the housing sector as OFWs acquired homes for their families. He said this was even stronger in January, based on reports by commercial banks.

"These factors compensated for the dampening impact of the decrease in the deployment of OFWs," Tetangco said.

According to Tetangco, the report of the Philippine Overseas Employment Administration (POEA) showed a 7.2 percent decline in total deployment for January.

Tetangco said the deployment of land-based labor declined by 9.8 percent to 77,391 workers in January, offsetting the increase in the number of deployed sea-based workers compared to last year.

Despite the drop in labor deployment, Tetangco said the strong start in remittances still augured well for the country’s projected remittance growth for the year.

In 2006, remittances from OFWs are expected to grow by at least 10 percent, possibly surpassing the $10.7 billion remitted in 2005. Last year’s growth rate was a surging 25 percent due mainly to the increase in labor deployment.

The BSP said that in December 2005 alone, remittances reached almost a billion dollars, hitting $962 million as OFWs sent money home for the holidays.

The increase in deployment resulted from an active campaign by the Arroyo administration to promote Filipino labor abroad since the Philippine economy can not support high-paying jobs in the domestic labor market.

"The continued demand for OFWS is due in part to efforts undertaken by the government, in cooperation with the private sector, to conduct various marketing missions aimed at promoting and identifying employment opportunities for Filipino workers," the BSP said.

As a result, the country has been deploying highly skilled and, thus, higher paid Filipino workers such as engineers, teachers, nurses and medical workers who would otherwise not find jobs commensurate to their skills.

To date, the BSP said the bulk of remittances come from the U.S.A., Saudi Arabia, Italy, Japan, Hong Kong, U.K., United Arab Emirates and Singapore.