OFW remittances mark 2nd month slowdown

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Personal remittances by overseas Filipino workers (OFWs) in February rose from a year earlier but marked a second monthly slowdown since December 2013.

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Data released by the Bangko Sentral ng Pilipinas (BSP) showed that remittances in February grew 6 percent to $1.99 billion from $1.88 billion in the same month last year.

But the February figure marks a decline from $2 billion posted in January this year and from $2.4 billion in December the previous year.

The central bank attributed the year-on-year increase in personal remittances to the steady rise in transfers of land-based workers with long-term contracts (4.3 percent), and sea-based and land-based workers with short-term contracts (10.3 percent).

Standard Chartered Bank economist Jeff Ng, however, said the second consecutive month of lower-than-expected remittance growth is slightly “disappointing” and could affect the country’s current account surplus.

“The data is slightly disappointing and poses downside risks to the current account surplus. We expect the current account surplus to narrow to 3.6 percent in 2014, from 4.3 percent in 2013,” he said.

The Philippines’ current account is the sum of net receipts from sales abroad of goods and services, overseas income and other current transfers, including remittances from OFWs.

Personal remittances represent the sum of net compensation for OFWs; personal transfers such as current transfers in cash or in kind by OFWs, as well as other household-to-household transfers between Filipinos abroad, and capital transfers between households.

The February remittance figure brought the cumulative amount of remittances for the first two months of the year to $3.99 billion, indicating year-on-year growth of 6.4 percent. Last year, January to February cumulative remittances stood at $3.75 billion.

Focusing on the brisk year-on-year pace of growth, Bank of the Philippine Islands associate economist Nicholas Antonio Mapa said the remittances give comfort to authorities that consumption and investment, particularly in cars and housing, will continue to be strong in the coming months.

Mapa said OFW remittances continue to be a reliable source of both foreign exchange and funding for consumption.

The United States, Saudi Arabia, United Arab Emirates, United Kingdom, Singapore, Japan, and Canada were the major sources of cash remittances.

Full-year 2013 personal remittances reached $23.35 billion. This year, the BSP expects cash remittances to reach P23.6 billion, growing by 5 percent.

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1 Comment

  1. Rosauro Feliciano on

    The government dependency on OFW’s remittances is not good for three major reasons:
    (1). Our college and universities are training our people to serve other countries. (2). Our government became so dependent on the remittances to finance the salaries of government employees including its foreign staffs. (3). There is a continual broken family structure because of long separation between husbands and wives. Under this situation our government is not at all serious to solve unemployment problem while the dignity of our women who works as house maids in foreign countries has no difference between the suffering of slave workers and maids; the only difference is the Maids are paid. Our government officials appear to be very proud in announcing that so and so overseas employment statistics for so and so year has increased. They really don’t feel ashamed unless they need to experience working as OFWs to see for themselves the working conditions of our women working as maids, which is entirely different than the kind of works maids are doing in our own country. There are those who have college degrees and have no choice but to work as maids because the salary appears to be very high when converting to our currency while not recognizing the fact that the cost of living in the country where they work is very high and so there are limitations to buy things for their personal needs as they need to send their monthly earning to their children. On the professional level there are enormous restrictions from personal needs to meeting requirements of the foreign country. Our Senators and Congressmen must stop thinking for themselves into becoming super rich. They should cooperate with one another and stop corruption in order to find solution to this unemployment problem in front of us all.