The Trade Union Congress of the Philippines (TUCP) has reduced from 15 percent to a new range of 10 to 12 percent the projected average compounded annual growth rate (CAGR) in remittances sent home by overseas Filipino workers (OFWs) through 2010.
“We see still annual remittances growing, although not as briskly as we previously anticipated,” TUCP secretary-general and former Senator Ernesto Herrera said.
In April 2006, TUCP predicted that remittances coursed through banks would grow at an average CAGR of 15 percent and hit $21.4 billion by 2010, or double the $10.68 billion posted in 2005.
Based on the revised 10 to 12 percent average CAGR, Herrera said the labor group now sees remittances hitting between $17.2 billion and P18.8 billion by 2010.
OFWs remitted a total of $10.94 billion in the eight months to August, up 17.2 percent or $1.6 billion versus the same period in 2007, according to the Bangko Sentral ng Pilipinas (BSP).
“They remitted $12.76 billion and $14.45 billion in 2006 and 2007, respectively.
We do not see any year-on-year decline in remittances, only slower-than-expected growth,” said Herrera, former chairman of the Senate labor, employment and human resources development committee.
He said the menacing global economic slump would not adversely affect in a big way the ability of highly skilled Filipino workers to obtain gainful employment overseas.
“With respect to Filipino professionals such as nurses, sailors, pharmacists, physical therapists, teachers and engineers, they will still be able to get jobs overseas,” Herrera said.
“The global healthcare industry, for instance, is relatively recession-proof. Ailing people in highly developed countries will continue to seek treatment, care and hospitalization regardless of their economic condition,” he pointed out.
“However, unskilled Filipino laborers such as domestic staff might be negatively impacted by a deep global economic slowdown. Their services are considered somewhat dispensable. If a banker loses his job, the first to go will be his foreign domestic help,” Herrera said.
Banks and insurers in the US , Europe and parts of Asia have been hit hard by the global financial meltdown. Due to staggering financial losses, some of them have collapsed, while others have been terminating tens of thousands of executives and employees.
Herrera said growth in the deployment of semi-skilled workers would also slow, largely on account of plunging oil, mineral and other commodity prices that would dampen new construction activities in the Middle East and mining-related projects elsewhere.
According to the Philippine Overseas Employment Administration (POEA), a total of 1,005,767 Filipino workers were deployed abroad in the nine months to September, up 26 percent or 207,036 compared to a year-ago.
In its April 2006 forecast, TUCP had cited three key remittance growth drivers in the years ahead:
• The aging of 77.5 million “baby boomers” (those born between 1946 to 1964) in the US , which has spurred the demand for foreign health care workers, including nursing home staff. The oldest baby boomers turned 60 in 2006;
• The ongoing rapid globalization that has increased the need for multinational corporations to retain highly qualified, experienced and English-speaking Filipino business and production managers; and
• Soaring energy prices that have boosted the economies of oil-producing countries in the Middle East that, in turn, have stepped up hiring of foreign workers in industries such as construction, travel and tourism and oil and gas exploration, development and production.
Except for lofty energy prices that have since plunged, Herrera said the two other remittance growth drivers remain intact.
In 2007, some $7.56 billion or 53 percent of the $14.45-billion in OFW remittances came from the US , while another 15 percent or $2.17 billion came from the Middle East .
Based on BSP statistics, OFW remittances expanded at an annual average compounded rate of 16 percent from 2001 to 2005. Remittances reached $6.04 billion in 2001; $6.88 billion in 2002; $7.58 billion in 2003; $8.55 billion in 2004; and $10.69 billion in 2005.