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Remittances from overseas Filipino workers (OFWs) are expected to
post a moderate growth in 2008 despite a global economic slowdown,
according to the Bangko Sentral ng Pilipinas.
Nestor Espenilla Jr., the central bank’s
deputy governor, said Tuesday the remittances coursed through banks
are expected to grow by 15 percent this year to $16.6 billion.
This forecast is higher than the 11-percent
growth amounting to $16 billion that was expected for 2008.
But it is lower than the 18.2-percent rise, or
$9.6 billion, recorded as of end-July 2008.
“We’re estimating that the slowdown can be
around 15 percent,” Espenilla told reporters at the sidelines of
the Chamber of Thrift Banks general membership meeting.
“There is still resiliency in terms of
remittances,” he said.
Remittances, the main driver of domestic
consumption, grew 13 percent to $14.449 billion in 2007, exceeding
the Bangko Sentral’s full-year target of 10 percent.
Their main sources for 2008 will be the United
States, Saudi Arabia, United Kingdom, Italy, United Arab Emirates,
Canada, Japan, Singapore and Hong Kong.
Unlike before when remittances were sent home
chiefly by skilled workers, Espenilla said, this time they would
come from accountants, engineers, office workers, nurses and other
health workers and other professionals.
The two million Filipinos in the United States
will account for 30 percent of the total $16.6 billion expected to
be remitted in 2008.
OFW layoffs
More than 50,000 to 100,000 of them who are not
American citizens and who are working in the agricultural and
service industries there are expected to return to the Philippines
because of the current US financial turmoil, Vice President Noli de
Castro said also on Tuesday. He cited reports from the Department of
Labor and Employment.
But de Castro assured that the government is
prepared to address the needs of these returnees.
“We have to find them alternative means of
livelihood even on temporary basis or at least while the global
economic crisis is there,” he said during a television interview.
The returnees who had saved up, de Castro added,
could start small businesses.
Not many returnees
The government refuted reports that many OFWs
are moving back because of the global economic crisis.
“It’s not a sad Christmas for OFWs,” Press
Secretary Jesus Dureza told reporters during a press conference also
on Tuesday. “We have not received indications from our 37 labor
officers abroad on reduction of requirement for OFWs. The situation
remains stable, we don’t expect reduction in demand for OFWs,
especially in the Middle East.”
He said it is “not safe” to associate the
return of OFWs who have finished their contracts with the supposed
lack of jobs abroad caused by the economic crisis.
Like de Castro, Dureza said the government is
“prepared for the worst and we have mechanisms to receive [the
returnees] and provide necessary assistance to them.”
Lawmaker also upbeat
Equally upbeat about the future of the OFWs was
Sen. Edgardo Angara, the chairman of the Senate Committee of Banks,
Financial Institutions and Currencies.
Advising them not to panic amid worries over the
global financial crisis, Angara also on Tuesday said in a statement
that Filipinos overseas should be prudent on spending their
remittances so they can divert expenditures to investments.
“Past reforms introduced by the central bank,
which involve increase of capital, increase of provision and the
several laws enacted by Congress that will push the prudential
supervision of the banks, have buttressed our country’s position
to withstand the crisis” he added.
Reforms unveiled
The reforms unveiled by the Bangko Sentral
included the Personal Equity Retirement Account (PERA), which was
already signed into law by President Gloria Arroyo and the Credit
Information System Act, which is due for signing by the end of
October.
Angara also advised the OFWs to invest in the
retirement account.
Under the PERA, an individual contributor can
make a total maximum annual contribution of P100,000 to his
retirement account. The contributor shall be given an income tax
credit equivalent to 5 percent of the total PERA contribution.
Income from the contribution as well as the eventual distribution of
the PERA to the contributor shall be tax-exempt. This amount is
withdrawable when the contributor reaches the age of 55.
The International Monetary Fund earlier said
remittance inflows to the Philippines are likely to decline because
of a slowdown in advanced economies.
As of July 2008, preliminary data from the
Philippine Overseas Employment Administration showed that the number
of Filipinos that left for employment overseas reached 761,836, an
increase of 28.2 percent from last year’s 594,445. This climb
reflected foreign employers’ preference for Filipino workers who
remain competitive because of their skills and proficiency in the
English language.
The Bangko Sentral also earlier said overseas
employment prospects would also be supported by a recently concluded
arrangement among Asean nations to standardize, regulate and monitor
professional standards, such as those for accountants, dentists and
medical practitioners.
Asean, or the Association of Southeast Asian
Nations, groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The arrangement is expected to facilitate the
mobility of professionals within Asean.
Moreover, discussions are continuing between the
Philippine government and prospective employers from France, Canada,
Australia, Saudi Arabia, Norway and Finland for possible deployment
of more nurses, engineers and other professionals.
-- Maricel E. Burgonio, Llanesca T. Panti, Angelo S. Samonte And
Chino S. Leyco
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