Tuesday, December 29, 2009

Strong rise in Gulf remittances to Philippines

Remittances from the millions of Filipinos working abroad rose strongly in September from August, data from the country’s central bank showed, contributing to upbeat forecasts for the economy.

But with the Gulf accounting for more than half the number of Filipino workers hired abroad last year, they are unlikely to escape the slowdown unscathed. At the same time, buoyancy in other markets is expected to boost remittances growth and keep the overall economy on track for expansion this year.

People are the Philippines’ biggest export, with 10 million of the country’s population of 92 million living outside the country. They send home, on average, at least $1 billion (Dh3.67bn) a month in remittances. Filipino workers sent home $1.44bn in September, up 8.6 per cent from a year ago, the Bangko Sentral ng Pilipinas said.

The September figure brought total remittances for the first nine months to $12.79bn, up 4.2 per cent from the same period last year, Amando Tetangco, the governor of the central bank, said. While the Philippines and its banks have had little exposure to the recent call for a six-month debt delay by Dubai World, it has many commentators and labour group activists concerned.

There are up to 350,000 Filipino workers in the UAE, of which about 250,000 are in Dubai. Last year, more than half of newly hired or rehired Filipinos were based in the Middle East, government data shows, and 193,810 of those were in the UAE.

This compares with 44,631 in 2001 and means the country accounted for nearly one in five of the total number of new hires and rehires last year. Remittances help to drive consumer spending in the Philippines, which accounts for more than two thirds of the country’s GDP.

They have grown with demand for Filipino labour and improved, wider access to remittance products and services. “These factors support the optimistic outlook for the sustained growth in remittances through the rest of 2009,” said Mr Tetangco. He forecast that remittances from Filipinos would grow by 4.2 per cent this year from last year’s record figure of $16.4bn.

Overseas nationals were also sending more money back than usual to help with reconstruction efforts after typhoons hit the archipelago in recent months, Mr Tetangco said. The importance of overseas workers to the Philippines can be seen in the special queues for them at the country’s airports, and special deals at local hotels and restaurants for their trips home.

There are also a number of state agencies aimed at protecting the rights of Filipino expatriates, such as the Overseas Workers Welfare Administration (OWWA), which has offices in Abu Dhabi and Dubai . Many Filipino workers are employed in the services sector.

Filipino nurses are also in great demand worldwide. The ministry of health estimated last year that 85 per cent of the country’s trained nurses, or 21,500 of them, have left the country, and many doctors retrain as nurses to take advantage of the demand. Much of the world’s shipping is crewed by Filipinos.

The rise in remittances means the Philippines is on track to meet its growth target of between 0.8 per cent and 1.8 per cent this year, although Mr Tetangco said it could be at the lower end of this range after weaker growth than expected in the third quarter. In the nine months from January to September, the main sources of remittances were the US, Canada, Saudi Arabia, Britain, Japan, Singapore, the UAE, Italy, and Germany.

“The deployment of Filipino workers abroad is anticipated to increase given the continuing hiring arrangements between the Philippines with existing and non-traditional labour markets, as well as the forthcoming relocation of US military facilities from Japan to Guam over the course of the next five years,” Mr Tetangco said. The IMF raised its forecast for remittances to 4 per cent growth from an earlier estimate of a 4 per cent contraction.


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