MANILA, Philippines — Remittances to the country reached an all-time high of over $20 billion last year as demand for Filipino workers remained strong even amid economic and political challenges confronting labor markets in the West and the Middle East.
The Bangko Sentral ng Pilipinas reported on Wednesday, that remittances of $20.1 billion for 2011 marked a 7.2-percent rise over the $18.3 billion registered the previous year, thus hitting the government’s projection of 7 percent.
The growth in remittances came about as job orders for Filipino workers from foreign employers last year stood at 58,123. Officials attributed the strong demand for Filipino workers to their skills and efforts of the government to ink labor agreements with other countries.
The BSP likewise credited the effort of banks and non-bank financial institutions to expand their presence in various countries hosting many overseas Filipino workers for aiding in the growth of remittances.
“[Rise in remittances] developed owing to the diversified destinations and skills of overseas Filipinos the strategic network of bank and non-bank service providers across the globe, as well as the new financial products and money transfer services offered in the remittance market,” the BSP said in a statement.
For December alone, remittances amounted to $1.8 billion, up by 6.2 percent from $1.69 billion in the same month of the previous year.
“Remittances remained resilient throughout the year amid the political turmoil in some parts of the Middle East and North Africa, the slowdown in global economic growth and intensified financial strains brought about by the Euro area sovereign debt crisis,” the central bank further said.
The biggest sources of remittances last year were the United States, Canada, Saudi Arabia, United Kingdom, Japan, United Arab Emirates, Singapore, Italy, Germany, and Norway.
Remittances are a closely watched economic indicator given their ability to push household consumption, which in turn is a major growth driver for the Philippine economy. Remittances in 2011 were equivalent to 9 percent of the country’s gross domestic product, the BSP said.
“Cash transfers from overseas Filipinos continued to be a major contributor in stimulating domestic demand,” the BSP said.
Remittances were credited for helping the economy grow in 2011 even as exports income declined amid anemic demand from crisis-torn countries, mainly those from the Euro zone and the United States.
The Philippine economy grew by 3.6 percent in 2011, a slowdown from the 7.6 percent registered the previous year but was much faster than the growth rates registered by advanced, Western economies.
The Philippines is the fourth-biggest recipient of remittances next to China, India, and Mexico.
For 2012, the government expects remittances to grow further by 5 percent.