Philippines posts 15 percent drop in cash remittance from Middle East

A man counts a wad of Philippine Peso bills he received from a relative working abroad at a money remittance center in Makati City, Metro Manila, Philippines on Sept. 19, 2018. (REUTERS)
Updated 23 September 2018
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Philippines posts 15 percent drop in cash remittance from Middle East

  • There has been a 15 percent decrease in remittances from Overseas Filipino Workers (OFWs) in the Middle East, with fund transfers from Libya and Israel falling the most at 73 percent and 61 percent — Central Bank of the Philippines
  • Remittances from Kuwait fell by 20.4 percent despite resumption of OFW deployment; Bahrain showed negative 22.9 percent; transfers from Oman dropped by 38.3 percent; and Saudi Arabia showed a slide of 10.4 percent

MANILA: Cash remittance from Filipino workers (OFW), particularly those in the Middle East, saw a steep decline from January to July this year, figures from the Central Bank of the Philippines (BSP) show.
A lawmaker noted that even the lifting of the ban on deployment of Filipinos to Kuwait last May failed to stop the remittance plunge.
Based on latest BSP data, there was 15 percent decrease in remittances from OFWs in the Middle East, although fund transfers from Libya and Israel fell the most at 73 percent and 61 percent respectively.
With that, Rep. Henry Ong, chairman of the House Committee Chair on Banks & Financial Intermediaries, said the policy shift in OFW deployment priorities must happen “sooner rather than later.”
“Filipinos are being held hostage by armed groups in Libya. Israel recently welcomed President Rodrigo Duterte on a brief visit. However, the remittances from these two countries pale in comparison with those from Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, and Oman, which were in the high double-digit percentages decline,” he said.
Remittances from Kuwait fell by 20.4 percent despite the resumption of OFW deployment last May. Bahrain showed negative 22.9 percent, transfers from Oman dropped by 38.3 percent and Saudi Arabia showed a slide of 10.4 percent. 
Qatar is the exception. The remittances decline from Filipino workers there was only 6.3 percent.
The Leyte second district representative pointed out: “There should not even be Filipinos in Libya because the security situation there is horrible, but still Filipinos go because that is where they have found jobs on their own.
“OFWs clearly have bleak and low-paying job prospects here in the Philippines because our wages are way below what they can earn abroad, so we have no choice but to deploy them elsewhere, to countries that will pay them well and respect their rights as migrant workers and as people of varied gender.” .
For this to happen, Ong said the priority list of alternative countries “must include those states that are signatories to the international conventions on human rights, labor, social security, and migrant workers.
“The other criterion would be the economic growth prospects of the target host countries because that will determine how well they will be compensated for their services. OFWs will go where they are respected, wanted, and paid well.” 
Ong lamented, though, that “it does not seem the concerned top officials have what it takes to help OFWs find better jobs in new host countries.
“They are just doing bureaucratic procedures and damage control on the problems that keep cropping up, but we do not see systemic, long-term solutions. Suffering through all that are the OFWs.” 
Meanwhile, aside from the decrease in cash remittance, the Philippines also suffered a decline in deployment of OFWs in 2017 after 10 years of continuous growth.
Recruitment consultant and migration expert Emmanuel Geslani, citing statistics from the Philippine Overseas Employment Administrstion (POEA), said deployment of OFWs to 180 countries went down by 9 percent in 2017 compared ith the previous year. The year 2016, Geslani said, was a banner year of deployment for OFWs with total deployment hitting more than two million.
POEA records show that only 1,992,746 OFWs were deployed in 2017. Geslani said this is the first time after 10 years of continuous increase starting in 2008 with 1,236,613 deployment; 2009 with 1,422,382; 2010 with 1,476,826; 2011 with 1,687,463; 2012 with 1,802,031; 2013 with 1,826,804; 2014 with 1,832,668; 2015 with 1,841,205; and 2016 with 2,112,331.
Geslani said the decrease may be attributed to actors, such as the decline in the hiring of new workers to Saudi Arabia, from 219,134 in 2016 down to 163,238 in 2017. 
A decrease in the number of new hires was also noted in the rest of the top ten OFW destinations, which include Kuwait, Qatar, Hong Kong, Taiwan, the UAE, Japan, Singapore, Malaysia and Oman.
“Another reason for the decline is the increasing shift of Saudi Arabia to employ more citizens to work in companies and malls as part of its ‘Saudization’,” Geslani continued.
In addition, more major projects in the Kingdom have been shelved or delayed, resulting in the exodus of more than 30,000 Filipino skilled workers in construction, maintenance services and oil industries, he added. “Crude oil, which has stayed in the $70-80 level, has prevented Middle East countries from going on construction and infrastructure projects, except for Qatar which is preparing for the football World Cup in 2022.” 
Even the household service workers sector also dropped by 8 percent in 2017 owing to internal controls implemented by the Philippine labor officers in the Middle East, Geslani said.
For 2018, he predicts that deployment of household service workers is not expected to go beyond the 200,000 mark with the deployment ban imposed in Kuwait resulting in the loss of 40,000 jobs.


Ahmed Al-Habtoor: Portrait of a driven auto executive

Updated 19 May 2019
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Ahmed Al-Habtoor: Portrait of a driven auto executive

  • There is no country on this planet where you will see Bentleys, McLarens and Bugattis as much as in the UAE.

DUBAI: Over the course of a morning in his office in Deira, Dubai’s traditional business district, Ahmed Al-Habtoor talked eloquently and expertly about the motor business in the UAE and the Arabian Gulf, about customers’ likes and dislikes, about the tough times the industry has faced recently, about his best-selling models, and about the importance of the sector within the UAE economy.
Then, he dropped a small bombshell. He is always chauffeurdriven, and seldom gets behind the wheel of any of the luxury vehicles he trades daily. “I don’t care about driving cars, I care about selling them,” he revealed.
From the youthful chief executive officer of Al Habtoor Motors, who could have his pick of Bugattis, Bentleys, McLarens and other “fast boys toys,” that was quite a revelation.
“I don’t like driving, I like to be on my phone checking emails and messages. I don’t have the patience to look for parking, and anybody who can afford to have a driver should do so,” he added.
So Al-Habtoor is, in more senses than one, a driven executive. The motor division is a key part of the Al Habtoor conglomerate, started by his father, the group chairman Khalaf, in the 1970s as an engineering business but which has expanded through real estate, hotels and hospitality, to education and entertainment.
Motors has been an integral pillar of the Habtoor portfolio since it was set up in 1983 to handle the Mitsubishi franchise in the UAE. “We have strict corporate governance, law, a constitution in the company. The rules are set and we are here to implement the directions of the chairman. We have our own ideas, we try to be creative, but it is a well-established, solid company with very strong roots,” he said.
here is still a large number of workers — whom he called “partners” — who can date their employment back to the very beginning of the Mitsubishi franchise.
He admits to two alternative frustrations in his job, depending on the economic climate.
“When the market is active and business is fantastic, I get frustrated at the pressure of delivering to my clients. I’m just busy, trying to meet the expectation of delivering the right product at the right time,” he explained. “The other frustration is when the market is challenging and low, I’m busy trying to be busy, trying to find business. It’s all about being busy.”
For the past few years, the “challenging” market has been to the fore, as he candidly admitted. The fall in the oil price in 2014-15 began to affect the economies of the energy exporters of the Arabian Gulf toward the end of the following year, and the motor sector was seriously hit. Sales volumes declined sharply — compounded by government spending cuts and some policy decisions.
“I think in 2017 the volume was acceptable. In 2018, it dropped when the government implemented VAT. I don’t think VAT was the wrong decision, but it had a negative effect. It was implemented when the market was in a weak situation. If the market was booming, it would have been much easier for us,” he said.
Al Habtoor Motors’ longevity gives its CEO a perspective on the forces that shape the industry. “It’s a cycle. There is always a cycle every 6-8 years. When oil prices started to fall it had an effect. In our region, government spending is the key to moving the economy. Not only in Dubai, but the whole of the UAE.”
He estimated that the motor industry was the second biggest sector in the UAE’s non-oil economy, behind real estate, but saw no real linkage in the simultaneous downturns in property and motor sales.
The other factor that affected car sales — especially in the high volume and fleet car business — was the increasing reluctance of banks in the UAE to continue previous levels of finance to small and medium enterprises (SMEs) during the worst of the downturn.

“It was not a very wise decision to withdraw support from SMEs. The economy depends on large companies, but at the end of the day, consumption comes out of the (medium) and small businesses. Uncertainty and insecurity in the market made a lot of people stay away from buying,” he said.
Al-Habtoor estimated that car sales volumes in the fleet business were down by 50 percent from the highs of 2015, as they were across the whole of the volume motor business. “Last year was very challenging, but thankfully we managed all the challenges,” he said, on the back of an upturn in business measured across the whole of last year.
He has reason to be more optimistic in the current year. “There has been stimulus to the economy, Expo 2020, and the confidence in the market improved. The changes to visa arrangements, the reduction of license fees — all these are having an effect,” he said.
On the “Expo effect” — the expected boost to the UAE economy from the huge business fair planned for next autumn — he was cautiously positive. “We’ve seen that coming through already. Now it is nominal, but we are seeing green shoots. It is not a big effect yet but it is happening, and the more we go toward October next year the more benefit will come,” Al-Habtoor said, adding that he was confident of getting back to 2015 levels eventually.
That is good news for the Mitsubishi, Fuso, Jac and Chery marks that are Habtoor’s staple. But the group also has an impressive stable of luxury cars, with the dealerships for Bentley, the McLaren sports brand, and the super-car Bugatti, in the UAE
The UAE’s reputation for glamorous, extravagant cars — even down to the Dubai police fleet — is a global phenomenon, and Al-Habtoor does not think it will change any time soon, even in challenging economic circumstances.
“A lot of people want beautiful cars and the best. It always was like that, it still is now and it will be in the future. The UAE and Dubai is always about the best. It’s in the culture of the city. There is no country on this planet where you will see Bentleys, McLarens and Bugattis as much as in the UAE,” he said.
The economics are different in the luxury brands, which were not as badly hit by the oil-related slump as the volume business. “The luxury end was affected by the downturn, but it’s more resilient, it’s OK,” he said.
“In the first four months of this year, we’re the number one dealer in the world for Bentley, and have consistently been among the biggest Bentley dealers in the world, if not the biggest. When luxury goods are moving, not just cars, but jewelry and other things, I feel that the economy will come back soon,” he said.
Bentley sales have been given a boost by the introduction at the end of last year of a new Continental GT, and by the continued appeal of the Bentayga, the company’s first move into the SUV market, which has huge appeal for motorists in the region. Deliberately priced at below 1 million dirhams ($272,250), the luxury SUV aims to take on other upmarket four-wheel-drive vehicles.
He seemed especially pleased with the performance of the McLaren range within his portfolio, vying with other more famous brands in the lucrative but very competitive sports car segment — another best seller in the region.
At the top end, McLaren competes with the best in the sports car market, and its BP23 model sells at more than 10 million dirhams. “There are only 116 vehicles around the world and we have six of them. In that ultimate series sector, McLaren is dominating,” Al-Habtoor said.
Then there is Bugatti, the French super-sports car whose Chiron model is one of the most expensive seen on the UAE’s roads, selling at around 12 million dirhams. Last year, the company sold 12 of them, Al-Habtoor said, but any ideas that McLaren is competing with, and cannibalizing sales, of Bugatti were dismissed.
“That’s like comparing a normal plane with a UFO. I once drove a Bugatti on a track at over 200km and it was as if I was having a picnic in the garden — you don’t even feel it,” he said.
Occasional high-speed track driving, apparently, is one of the few occasions he likes to give the chauffeur a day off.