Remittances from overseas-based Filipinos grew at a faster pace in May despite the drag caused by the political unrest in the Middle East and North Africa and the ill-effects of the natural disaster in Japan earlier in the year.
The Bangko Sentral ng Pilipinas on Friday reported that money sent home by Filipinos abroad continued to increase during the month due to the sustained demand for Filipino laborers.
Remittances amounted to $1.69 billion in May, up 6.9 percent from $1.59 billion in the same month last year. This compares with the 6.3-percent expansion in April.
Total remittances for the first five months reached $7.9 billion, up 6.2 percent from $7.49 billion a year ago.
The average remittance increase for the first five months kept the full-year target of a 6-percent growth on track.
There were concerns earlier that remittances might decline this year due to the political unrest in the Middle East, host to a significant number of Filipino workers.
However, the BSP said remittances remained strong because of the continued increase in the demand for Filipino workers in alternative labor markets.
Data from the Philippine Overseas Employment Administration showed that Filipino workers continued to be deployed abroad, offsetting the job losses resulting from the social unrest in the Middle East and North African region and the disasters that occurred in Japan.
The BSP likewise said the move of Philippine banks either to expand offshore or to engage in tie-ups with remittance agents abroad allowed Filipino workers offshore to more easily send money. This, in turn, encouraged the workers to send more, the central bank said.
“The growing presence of bank and non-bank money transfer channels both locally and internationally as well as the expanding variety of products and services offered by the remittance networks have enabled overseas Filipinos to send a higher value of remittances using more innovative financial services in the market,” the BSP said in a statement.
Meantime, new concerns over the ability of remittances to hit the full-year target were raised following the announcement from the Saudi government that it would no longer issue work permits to Filipino domestic helpers.
The BSP expressed confidence, however, that the impact of the problem in Saudi Arabia would be minimal because the percentage of domestic helpers to the total number of OFWs has been shrinking while that of professionals has been rising.
“To support overseas Filipinos who will be displaced by the Saudization program, the government is exploring job opportunities offered by other countries such as Australia and Canada,” the BSP said, citing statements from the country’s labor department.
Remittances are a closely watched indicator in the Philippines because it largely fuel household consumption.