10.15.2012

Personal remittances from overseas Filipinos (OFs) continued to rise in August 2012, posting a growth of 7.9 percent from the year-ago level to reach US$2 billion, Bangko Sentral ng Pilipinas Officer-in-Charge Juan D. De Zuiga, Jr. announced today.1This favorable development brought the cumulative personal remittances during the first eight months of the year to US$15.3 billion, higher by 5.6 percent compared to the level registered in the same period last year. Growth in remittances was sustained by higher personal transfers from land-based OF workers (OFWs) with work contracts of one year or more (by 3.3 percent), as well as sea-based workers and land-based workers with short-term contracts (by 13.3 percent).

Cash remittances from OFs coursed through banks likewise expanded by 5.5 percent to reach US$13.7 billion for the first eight months of 2012 relative to the level registered in the comparable period last year. The steady influx of remittances was observed from both sea-based (US$3.2 billion) and land-based workers (US$10.5 billion). Key sources of remittances were the U.S. (43.1 percent of total cash remittances), Canada (9.5 percent), Saudi Arabia (7.7 percent), the United Kingdom (4.9 percent), Japan (4.9 percent), the United Arab Emirates (4.2 percent), and Singapore (4 percent).

Preliminary reports by the Philippine Overseas Employment Administration (POEA) indicated continued demand for skilled Filipino workers. For the period January-September 2012, a total of 231,316 job orders mostly for service, production, and professional, technical and related workers were processed in response to the manpower requirements in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, and Taiwan. The POEA also reported that workers with processed contracts and those awaiting deployment reached 1,081,513 for the first semester of 2012. However, this was lower by about 35 percent than the level recorded in the same period last year. Meanwhile, the Department of Labor and Employment (DOLE) reported last month that the Philippines ratified the Maritime Labour Convention (MLC), 2006, dubbed as the Seafarers International Bill of Rights and the International Labor Organization (ILO) Convention No. 189 or the Decent Work for Domestic Workers Convention. These measures should provide better work opportunities abroad through strengthened protection for OFs.

With expectations of sustained demand for skilled Filipino workers overseas, remittances are projected to continue to boost economic activity and provide a steady supply of foreign exchange. Moreover, the increasing use of financial channels for transfers and the continued introduction of innovations in remittance products are expected to contribute to the steady flow of remittances into the country.

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1The BSP started the release of data on personal remittances in June 2012. As defined in the Balance of Payments Manual, 6th Edition (BPM6), personal remittances represent the sum of net compensation of employees (i.e., gross earnings of overseas Filipino (OF) workers with work contracts of less than one year, including all sea-based workers, less taxes, social contributions, and transportation and travel expenditures in their host countries), personal transfers (i.e., all current transfers in cash or in kind by OF workers with work contracts of one year or more as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines), and capital transfers between households (i.e., transfers of fixed assets and financial assets that arise from the migration of individuals from one economy to another).

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/Personal Remittances Sustain Growth Momentum; January-August 2012 Level Reaches US$15.3 Billion