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OFW Remittances Hit US$12.8 Billion in 2006, exceeding the forecast by US$0.5 Billion

02.15.2007

Overseas Filipino workers’ (OFWs) remittances coursed through the banks in December 2006 grew year-on-year by a hefty 37.2 percent to US$1.3 billion, the highest monthly remittance level ever recorded thus far.  This brought the total OFW remittances in 2006 to US$12.8 billion, up by 19.4 percent from 2005, and higher than the forecast for the year by US$500 million.

The strong inflows of cash remittances, which have been in excess of the billion-dollar level for the past eight months, can be traced mainly to the higher deployment of Filipino workers abroad and to financial institutions’ adoption of innovative ways to improve delivery of financial services, expand their network and enhance their infrastructure to reach a greater number of overseas Filipinos and their beneficiaries. 

Preliminary data in 2006 from the Philippine Overseas Employment Administration (POEA) on new hires and rehires showed annual deployment reaching 1.1 million (or a year-on-year growth of 10.5 percent), reflecting the increased demand for Filipino workers.  By type of worker, the number of deployed land-based workers was higher by 12.2 percent at 831,318 while the number of sea-based workers went up by 5.2 percent at 260,737. The demand for OFWs is expected to increase further as the Government intensifies its human resource development and training programs for potential workers, improving their competitive advantage over those from other labor-providing countries.  Moreover, sea-based workers have maintained their leadership in the labor market for highly skilled maritime workers, as noted by the Department of Labor and Employment (DOLE). 

Meanwhile, banks and non-bank remittance companies heeded the call of the Bangko Sentral ng Pilipinas (BSP) to make the delivery of remittances faster, safer and more efficient.  Specifically, remittance channels have improved the platform for remittances through adoption of advanced systems and new technologies (such as internet/on-line banking, phone banking and through short messaging) and enhanced and expanded financial products and services (e.g., bills payment arrangements, international money/cash cards, remittance network expansion, new correspondent remittance agreements with host countries).  The link-up of the three major ATM networks also facilitated the access by beneficiaries to the formal channels of remittance transfers.

The bulk of OFW remittances continued to come from the U.S.A., Saudi Arabia, Canada, Italy, the United Kingdom, Japan, the United Arab Emirates, Hong Kong, Singapore, and Taiwan.

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