bsp.remittances

MANILA — The Bangko Sentral ng Pilipinas (BSP) said growth in remittances sent home by overseas Filipinos workers (OFWs) will slow down due to the political turmoil in the Middle East and North Africa (MENA) and the disasters in Japan.

In a presentation delivered an economic briefing sponsored by the Security Bank last Friday, BSP Deputy Governor Nestor Espenilla said the Central Bank is projecting growth in remittances of 7 percent, a percentage point lower than its original forecast of 8 percent.

The new growth forecast yields remittances of $20.1 billion this year.

Last year, remittances grew 8.2 percent to $18.8 billion.

“The new numbers take into account the MENA crisis and Japan,” Espenilla said.

Japan is among the top five remitting countries, accounting for 4.7 percent of total remittances last year.

MENA countries contribute lower than $1 billion of remittances.

But Espenilla stressed that remittances, considered as the economy’s saving grace for the past few years, will remain resilient this year.

“Remittances in 2011 are expected to remain resilient amid possible downside risks such as the turmoil in the MENA region and natural disasters in Japan,” he said.

While remittances from Japan could drop in the short term, reconstruction could encourage greater demand for OFWs.

If conflict in the MENA region is contained to those currently affected countries, the impact on actual remittance flows could be limited, Espenilla said.

Last Friday, the BSP also announced that remittances from the nearly 10 million Filipinos overseas hit $1.5 billion in February, up 6.2 percent over the same period last year.

“Remittance flows into the country continued to draw strength from the steady demand for Filipino manpower abroad,” BSP Governor Amando Tetangco said.

The February result brought the two-month total to nearly $3 billion, representing a growth of 6.9 percent from the $2.59 billion registered in the same two-month period in 2010, Tetangco said.

Data from the Philippine Overseas Employment Administration (POEA) showed that 43,360 job orders were processed as of the end of March 2011 in response to the manpower requirements in Saudi Arabia, United Arab Emirates, Qatar, Kuwait and Taiwan.

Officials said 1.363 million Filipino workers were deployed in the January-November period last year, up 2.7 percent from 1.327 million.

Most of them were land-based workers who were deployed in Saudi Arabia, the UAE, Hong Kong, Qatar and Singapore.

Tetangco also said OFWs and their families can expect fast and cost-effective money transfers as the remittance network in strategic locations worldwide will be expanded.

He said innovative financial products will also be offered to complement their savings and investment needs.

“These positive developments continue to underpin the resilience of remittances not withstanding the ongoing crises in MENA states and Japan,” he said.

Tetangco said government efforts on the redeployment of displaced OFWs are being carried out though the Department of Labor and Employment’s Task Force Middle East.

Remittances are a pillar of the economy as these flows, equivalent to about 10 percent of Gross Domestic Product (GDP), support private consumption, the currency and the country’s balance of payments.