MANILA, 22 June 2006 — Remittances from Overseas Filipino Workers (OFWs) are expected to increase by another 20 percent this year, judging from the $3.7 billion sent through banking channels from January to April 2006, the Central Bank of the Philippines (BSP) has said.
The $3.7 billion cumulative remittances for the first four months of the year posted a double-digit growth of 10.8 percent compared to the $3.35 billion remittances recorded for the same period last year, it said.
The slight slowdown in remittances growth for the first four months of the year was attributed to the reduction in the total number of deployed overseas workers.
Preliminary data from the Philippine Overseas Employment Administration (POEA) on new hires and rehires from January to April 2006 showed that the total number of deployed workers dropped by 2.7 percent to 359,402.
Land-based workers, which comprised 74.7 percent of total deployed OFWs, declined by 5.8 percent to 268,637 while sea-based workers was higher by 8.0 percent to 90,765.
Partly compensating for the effect of the contraction in the number of deployed workers was the sustained aggressive marketing campaigns conducted by local banks (e.g., client giveaways, better offered rates, increased visibility through product brochures); efficient modes of money transfers (such as internet/on-line banking, phone banking, bills payment services); and increased remittance centers and tie-ups abroad. These bank initiatives offered overseas workers with a wide array of instruments/facilities for faster means of remittance transfer to beneficiaries.
BSP Gov. Armando Tetangco said the BSP was encouraging OFW families to save part of their remitted incomes in banks or engage in business.
According to a BSP survey of households in Metro Manila, only 11 percent of OFW families attempt to invest in the stock market or engage in business. A larger 39 percent kept savings in banks and other depository institutions.
About 10 percent of households in Metro Manila have at least one OFW, the survey showed. Of these families, 91.3 percent received remittances in the past 12 months.
The survey also showed that nearly all — 95.5 percent — of the households used part of the remittances to buy food and pay for other domestic expenditures.
Tetangco said, “We’ve been coordinating with the banks, so the banks can offer financial products that the OFWs and their families can buy or participate in. That’s for one group of OFWs that are not prepared to engage in business.”
“We want to see more OFW families putting a part of the remittances in banks or financial products,” he said. “For those that don’t have the inclination or the time to manage their investment, the bank will basically manage that for you. That’s also good because there will be more resources for banks to invest in productive activities.”
Tetangco said the banking system was also ready to support OFW families with entrepreneurial talent.
“We can tie this up with microfinance so let’s say if somebody has a certain amount of capital but would need additional, he can go to a bank and borrow, either under a microfinance program or those with bigger requirements tap SME (small and medium-scale enterprise) lending,” he said.
