Growth in remittances seen tapering
By Jerome Aning
Philippine Daily Inquirer
First Posted 20:23:00 10/26/2008
Filed Under: Economy, Business & Finance
MANILA -- Citing the brewing global financial crisis, a moderate labor group has revised its projected growth of remittances sent home by overseas Filipinos from 15 percent to a range of 10 to 12 percent through 2010.
The Trade Union Congress of the Philippines said the average "annual compounded growth rate in remittances" (ACGR) it computed in April 2006 -- wherein the group predicted that remittances coursed through banks would result in an average ACGR of 15 percent -- may have to be revised.
TUCP originally projected that remittances would hit $21.4 billion by 2010, double the $10.68 billion posted in 2005.
"We see still annual remittances growing, although not as briskly as we previously anticipated," TUCP secretary-general Ernesto Herrera explained in a statement.
OFWs remitted a total of $10.94 billion in the first eight months to August this year, up 17.2 percent or by $1.6 billion from the same period in 2007, according to the Bangko Sentral ng Pilipinas.
They remitted $12.76 billion and $14.45 billion in 2006 and 2007, respectively.
“We do not see any year-on-year decline in remittances, only slower-than-expected growth," added Herrera.
The former senator said the “menacing” global economic slump would not adversely affect in a big way the ability of highly skilled Filipinos workers to obtain gainful employment overseas.
"With respect to Filipino professionals such as nurses, sailors, pharmacists, physical therapists, teachers and engineers, they will still be able to get jobs overseas," Herrera said.
"The global healthcare industry, for instance, is relatively recession-proof. Ailing people in highly developed countries will continue to seek treatment, care and hospitalization regardless of their economic condition," he pointed out.
"However, unskilled Filipino laborers such as domestic staff might be negatively impacted by a deep global economic slowdown. Their services are considered somewhat dispensable. If a banker loses his job, the first to go will be his foreign domestic help," Herrera said.
Banks and insurers in the US, Europe and parts of Asia have been hit hard by the global financial meltdown. Due to staggering financial losses, some of them have collapsed, while others have been terminating tens of thousands of executives and employees.
Herrera said growth in the deployment of semi-skilled workers would also slow down, largely on account of plunging oil, mineral and other commodity prices that would dampen new construction activities in the Middle East and mining-related projects elsewhere.
According to the Philippine Overseas Employment Administration, a total of 1,005,767 Filipino workers were deployed abroad in the nine months to September, up 26 percent or by 207,036 compared to a year-ago.
The government has admitted that some OFWs may be displaced by the crisis, but added that the government could be coming out with a contingency plan to help the returning OFWs get training, start an small investment or find other jobs.
However, a recruitment industry consultant said the government should concentrate on placing more funds for the establishment of training centers for skilled workers in order to fill the “huge” demand in the Middle East, Canada, Australia and Guam where construction projects would start by 2010.
“Contingency funds to be allocated for possible lay-offs in the gloomy business situation in the Western countries are better off placed in massive training programs for skilled positions now lacking in the country due to the continuing outflow of skilled manpower to the huge construction projects in the Middle East,” Emmanuel Geslani said.
Geslani cited a report from the International Labor Organization which, he said, confirmed that the growing shortage of managers and skilled professionals in Southeast Asia could stifle the growth of the countries in the region.
“The growing skills shortages raised the questions about the quality and relevance of tertiary education in ASEAN, adding that the problem was not a lack of applicants, but their poor qualifications,” Geslani said.
He recalled that the foreign chambers of commerce in the country had noted that job mismatches in the country.
The chambers have asked the Commission on Higher Education to look into the courses offered to graduating high school students that offer only white-collar jobs instead of blue-collar jobs which are now in demand.
The report added that skills shortages could undermine enterprise competitiveness in a variety of ways. They can lead to capacity underutilization and productivity losses, increase labor turnover, higher wages increases and higher recruitment and training costs.
According to Geslani, the country can benefit more in the long run by putting up the training centers in the provinces where most of the unemployed and underemployed millions are located and by giving them training for local or foreign jobs that could withstand the world-wide recession effects.
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