MONEY transfers by overseas Filipino workers (OFW) to their families in the Philippines are in for a slowdown this year, as OFW deployment to Asia and the Middle East starts to taper off.
Remittances may grow between zero and 2.5 percent this year, according to the think tanks Eagle Watch and First Metro Investments Corp. (FMIC)-University of Asia and the Pacific (UA&P).
“We have been looking at the data of OFW deployment, and in 30-plus years it has already tapered off even before the problem right now with oil. Asia and Middle East already had lower deployment as of last year,” said Dr. Alvin Ang, economist and senior fellow at Ateneo Eagle Watch.
Remittances, Ang pointed out, might grow by only 2.5 percent this year.
The central bank has yet to release the full-year 2015 remittance data. As of end-November, the amount of cash transfers through banks totaled $22.84 billion, up 3.6 percent from a year earlier period.
And noted the number of professionals, or highly-skilled workers, were on the wane compared with the number of blue collar workers.
“On a per capita basis, remittances will fall because the bulk of the remitters are from the low-skilled workers the bulk was from services and the low-skilled workers,” he said.
“We are seeing that remittances will taper off. Maybe this year 2.5 percent growth will be the norm. That will be like for the next few years staring this year,” according to the economist.
Meanwhile, FMIC and UA&P cited the negative developments hounding the countries of destination.
“This is with the likely depreciation of Middle East currencies relative to the US dollar, and the moderate threat of job layoffs that may arise from slowing construction activity,” FMIC and UA&P said in their latest joint issue of “The Market Call.”
Oil-producing countries, particularly in the Middle East, that have accumulated huge international reserves through more than a decade of high oil prices may now rethink their spending priorities, according to the report.
These countries might “… need to prop up their economies through stronger government spending,” the think tank added.