BSP monitoring Mideast impact on remittances

Philippine monetary authorities are closely watching developments in strife-torn Middle East and North Africas, where more than 16 percent of OFW remittances come from, and how the escalating violence may impact on the ability of Filipinos to send money, the Bangko Sentral ng Pilipinas (BSP) said Wednesday. BSP Deputy Gov. Diwa Guinigundo said in an interview with reporters the social and political unrest in Libya, Bahrain, Yemen, Egypt, and Tunisia might have a negative impact on the remittances of overseas Filipino workers (OFWs), as well as exports. "We do not expect serious impact at this point but we are monitoring the situation, considering the bulk of remittances actually come from Middle East," Guinigundo said. Some adverse impact can be expected, according to the central bank deputy chief, who declined to speculate on the significance the situation might have on remittances, which account for 10 percent of the Philippines’ gross domestic product. Instead, Guinigundo is taking a cautious stand saying, “We have to be very careful in terms of the impact of the turbulence in the Middle East." Money sent home by OFWs grew 8.2 percent to a record $18.76 billion last year, from $17.35 billion in 2009, as demand for skilled Filipino workers remains strong, the central bank reported on Feb. 15. Money transfer agents have also expanded their operations abroad, giving OFWs more choices when sending money to relatives in the Philippines. Data showed that Middle East alone accounted for 16 percent of remittances last year, which totaled to $2.96 billion — up 11.2 percent from $2.66 billion in 2009. More than half, or $1.644 billion, of the money OFWs sent from Middle East came from Saudi Arabia, United Arab Emirates ($776.3 million), Qatar ($248.8 million), Bahrain ($167.28 million), Kuwait ($106.5 million), Israel ($67.3 million), and Oman ($66.76 million). The Philippine Overseas Employment Administration has suspended the processing and deployment of Filipino workers to Bahrain, Libya, and Yemen until peace and order conditions return to normal. The Bangko Sentral sees remittances growing 8 percent this year, breaching $20 billion — a new record. Demand for skilled Filipinos remains strong, the central bank reiterated. Philippine merchandise exports soared 33.7 percent to $51.39 billion last year from $38.43 billion in 2009, boosted by the strong recovery of the electronics and semiconductor industry, National Statistics Office data showed. The situation in the Middle East and North Africa will have “some impact," Guinigundo said. “Right now, it will be perhaps on remittances and exports." — VS/JE, GMA News