Over a thousand Filipinos have been repatriated from Saudi Arabia in recent months in line with the crackdown on illegal workers but this situation is not expected to make a big dent on remittance inflows to the Philippines.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said initial assessment shows that this situation will have short-term effect on remittance inflows since “the reduction (of inflows) will come from undocumented workers.”
“They are not exactly the bulk of our overseas workers,” he told PNA in a text message.
As of end-August this year, overseas Filipinos’ personal remittances to the Philippines reached US$ 16.03 billion, 5.9 percent higher than the US$ 15.05 billion same period last year.
Inflows from KSA during the eight-month period accounts to about 8.44 percent, higher than the 7.68 percent same period last year.
It grew by 16.4 percent, higher than the 3.41 percent growth in the first eight months of 2012.
The BSP has a five percent remittance growth target for 2013 and Guinigundo said they are keeping the target despite the negative external developments.
In 2012, the central bank also have a five percent remittance target but actual inflows grew by 6.3 percent year-on-year to US$ 23.35 billion from the previous year’s US$ 21.92 billion.
Historically, Overseas Filipino Workers (OFWs) are able to counter negative impact of developments in the Middle East on employment because they can easily find jobs in other places.
Guinigundo noted that “with diversified skill sets, Filipino Overseas Workers could be deployed somewhere else in the Gulf or in Europe as shown during the two Gulf wars,” he said.
He also pointed out that there are lots of OFWs who are in the medical field, thus, “their services are critical and are in demand.”
Also, since Philippine banks have established stronger ties with financial service companies overseas, the central bank executive said cost of sending money has gone down, which in turn, is a plus factor to the resiliency of remittance inflows to the domestic economy.
“Most important, the number of both deployed and processed workers have remained strong so the impact of Saudization could somehow be softened,” Guinigundo said.
“We expect our BPO (business process outsourcing) and tourist receipts to provide some substantial counterweight to this negative development,” he said.
Remittance is among the country’s major growth drivers as it accounts about 10 percent of the domestic gross product (GDP)
With remittance expected to remain robust expansion of the domestic economy is ensured when it comes to this particular growth driver.
In the first half this year, the Philippines posted a growth of 7.5 percent, same with that of China and higher than the government’s six to seven percent full-year target. PNA