2010 OFW remittances reach record $18.76B

(Updated 10:25 p.m.) Overseas Filipino workers (OFWs) sent home more than $18.76 billion to their loved ones in the Philippines last year, a new record, the Bangko Sentral ng Pilipinas (BSP) reported Tuesday. Central bank data showed that money transfers by OFWs also reached a new monthly record of $1.694 billion last December, up 8.1 percent from December 2009, which eclipsed the $1.673- billion record booked last October. The amount of remittances in 2010 topped the revised 8 percent growth forecast by monetary authorities, with the BSP initially saying the amount would likely grow by 6 percent. "The 2010 level slightly exceeded the BSP's forecast of $18.7 billion, or an 8.0 percent year-on-year growth for the year," said BSP Gov. Amando Tetangco Jr. Tetangco said remittances jumped by $1.415 billion from the previous record of $17.348 billion in 2009 as the money sent home by sea-based OFWs went up by 11.9 percent while that of land-based workers increased by 7.2 percent. The BSP chief added that remittances last year accounted for about 10 percent of the country's gross domestic product (GDP). He said the amount also provided strong support to domestic demand. "The major driving factors that helped accelerate the growth in remittances were the diversity of the destinations and skills of overseas Filipinos combined with the expanding network of bank and non-bank service providers both here and abroad to capture a larger share of the global remittance market," Tetangco explained. He cited the steady improvements on the variety and coverage of global remittance networks that have enabled more OFWs to send remittances at a more affordable cost, including web-based services, automated teller machines, as well as reloadable or reusable cash cards. "The continuing innovation of financial products and services being offered in the market to facilitate money transfers have likewise contributed to the resilience of remittances throughout the year," Tetangco said. Money transfers and credit rating outlook Robust OFW remittances helped the country book a strong external payments position last year, resulting in a credit outlook and rating upgrade from Standard & Poors and Moody's Investors Service. The country's gross international reserves (GIR) — the sum of all foreign exchange flowing into the country — surged 36.8 percent to a record level $62.371 billion last year from $45.03 billion in 2009. Last January, the country's foreign exchange reserves jumped 39.5 percent to a new record of $63.61 billion from $45.591 billion in the same month last year. The GIR is expected to range between $68 billion and $70 billion this year. Sources of remittances The US, Canada, Saudi Arabia, Japan, United Arab Emirates, Singapore, Italy, Germany, and Norway were the countries where most of the money transfers came from IN 2010, the central bank said. Tetangco earlier said that OFW remittances will continue to boost the peso this year when it is expected to rise within the P42-45 range per US dollar. Some analysts believe that towards the end of 2011, the dollar will drop drop to P41. — With Paterno Esmaquel II/VS, GMA News