August remittances surge amid OFW demand
MANILA, Philippines–Cash sent home by migrant workers continued to rise at a better-than-expected rate in August as demand for Filipino labor remained strong overseas.
This came amid geopolitical tensions abroad, particularly in the Middle East, where a significant portion of the country’s eight million overseas Filipino workers (OFW) are based.
“The increase in remittances was driven largely by the steady increase in transfers from land-based workers with work contracts of one year or more,” the BSP said on Wednesday.
Data from the Bangko Sentral ng Pilipinas (BSP) showed OFWs sent home $2.05 billion in remittances in August, up 6 percent year on year. For January to August, remittances were up 5.8 percent to $15.5 billion.
For all of this year, the BSP expects remittances to rise by 5 percent to about $25 billion. Last year, remittances, at nearly $23 billion, accounted for over 8 percent of gross domestic product.
Remittances from migrant workers are the country’s biggest source of foreign exchange, which provides support for the peso’s value. This also ensures the steady supply of foreign currencies in the country, which the government and local businesses need to do business with the rest of the world.
For the January-August 2014 period, cash remittances reached $15.5 billion, or a 5.8-percent increase compared to $14.7 billion registered in the same period in 2013.
Cash remittances from land-based and sea-based workers rose by 5.2 percent to $11.8 billion, and 8 percent to $3.7 billion, respectively.
The bulk of cash remittances (79 percent) came from the United States, Saudi Arabia, the United Arab Emirates (UAE), the United Kingdom, Singapore, Japan, Canada and Hong Kong.
Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that for January-August 2014, job orders reached 619,388, of which 38.6 percent were processed job orders intended for service, production, and professional, technical and related workers in Saudi Arabia, the UAE, Kuwait, Taiwan and Qatar.
The Philippines is the world’s fourth-largest recipient of remittances, behind Mexico, India and China.
Apart from sustained demand for migrant workers, the efficient network of bank and non-bank remittance channels established worldwide “and their efforts to expand financial services to cater to the various needs of OFWs provided support to the inflow of remittances,” the BSP said.
Originally posted at 5:16 pm | Wednesday, October 15, 2014
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