WOW Pinoy

OFW remittances seen reaching $17B this year

The central bank, Bangko Sentral ng Pilipinas (BSP), expects money remittances from overseas Filipino workers (OFWs) to reach $17 billion this year, a new record high and topping the earlier BSP forecast.

BSP Governor Amando Tetangco Jr. also told reporters at the sidelines of an economic briefing in Congress that the country’s external accounts would sustain surpluses this year and next.

“Remittances will continue to be our source of inflows,” Tetangco said.

In the central bank’s earlier forecast, OFW remittances were expected to hit about $16.45 billion this year, up 10 percent from 2007 despite some fears that the US-led global slowdown could temper inflows. Of the total overseas remittances earlier projected for this year, about $15.89 billion was expected to be coursed through the banking system.

“We remain positive that the external accounts would still show a surplus in 2009,” Tetangco said in a separate e-mail, when asked about prospects for next year given the recent softening of global food and fuel prices.

For this year, the balance of payments is expected to post a surplus of $2.5 billion.

“We also expect that even as further slower growth in major economies hangs over us, the demand for our highly skilled and better paid overseas Filipino workers would not be severely affected,” Tetangco said.

Through the years, the Philippine banking system has made substantial progress in capturing remittance flows. Banks continue to provide expanded financial services to overseas Filipinos and their families through tie-ups with foreign financial institutions, establishment of remittance centers and marketing offices abroad, and stronger partnership with manning agencies.

The deployment of Filipino workers has not declined this year despite the looming US recession that is widely expected to create ripples across the globe. From a stop-gap measure initiated by the government to curb unemployment in the 1970s, overseas employment has developed into a vital industry generating foreign exchange exceeding foreign investment inflows for the Philippines.
OFW money remittances through the banking system have exceeded the $1 billion a month since May 2006.

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