Remittance growth may fall to single digit levels

MANILA, Philippines - Cash sent home by overseas Filipino workers (OFW) will only grow by single-digit levels this year, the lowest ever recorded since remittance flows were tracked by the government two decades ago. Remittance inflows this year will be slower than the original projection of six to nine percent growth, Iluminada Sicat, BSP economic statistics director, said. Sluggish US and European economies would lead to weaker demand for labor, risk aversion, and rapidly diminishing consumer spending, Sicat said. Based on its earlier projections, the BSP said remittances in 2009 would reach between $17.9 billion and $18.4 billion, which included cash sent through banks and money that pass through other non-bank channels. Remittances, on average, grow by 10 percent yearly. Latest data from the BSP indicated that remittances from overseas Filipinos reached $15 billion in November last year, 15-percent higher than remittance levels in 2007. In turn, remittances — considered as one of the most dependable pillars of the country’s economic growth — boost consumer spending which further drives expansion. “We still project a growth but there would be a slowdown in this growth," said BSP governor Amando Tetangco. “But definitely, remittances will not decline because we have more permanent residents abroad than we used to. Our workers abroad are also employed in better-paying skilled positions." However, deployment of seafarers might be hurt since the decline in global trade also lowers appetite for crewmembers onboard oceangoing vessels, Tetangco said. Nevertheless, the BSP governor said that Filipino seafarers are generally favored by shipping companies. Filipino workers also have an advantage in the health and medical profession as well as other high-paying, high-skill position in other industries, he said. The BSP is still reassessing the balance of payments projections which include forecasts for remittance inflows, Sicat said, adding that the central bank is closely monitoring global developments and how these will affect the Philippines. “Nonetheless, we expect deployment growth will remain positive but at a slower pace compared to the double digit growth recorded in 2008 at 24 percent," Sicat added. As of November, the Philippine Overseas Employment Administration (POEA) reported an increase in the deployment of workers overseas. In January to November 2008, deployment jumped 24.4 percent. POEA data also showed that about 90 percent of newly-hired overseas workers in January to October last year consisted of professionals and skilled workers. For its part, the Department of Labor and Employment (DOLE) said the slump in OFW deployment could be mitigated by strong labor demand in host countries such as Canada, Australia, UAE, and Qatar. - GMANews.TV