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Double Digit Growth in August Brings January-August OFW Remittances to $5.5 Billion

10.15.2004

Remittances by overseas Filipino workers (OFWs) posted 45.9 percent year-on-year growth in August to reach US$791 million. This marks the fastest growth since 1999.  The August remittance brought the cumulative level for the first eight months of 2004 to US$5.5 billion, up by 9.4 percent compared to the $5.1 billion recorded during the same period in 2003. The growth in remittances during the period provides greater optimism that the country’s projected 6 percent growth (or equivalent to US$8.1 billion) for the whole of 2004 is achievable and may be exceeded.

The surge in the level of remittances in August was attributed mainly to:  

1)  increase in the number of OFWs as well as deployment of higher paid workers;[1] and

2)   commercial banks’ aggressive promotion campaign and wider service coverage to attract more OFWs to use the formal channels by improving the efficiency of remittance system, expanding the number of remittance centers, and increasing tie-ups with foreign financial institutions.   

OFW remittances, bulk of which continue to come from Hong Kong, Japan, Singapore, Italy, U.S., U.K., Saudi Arabia, and United Arab Emirates (UAE), remain to be an important component in both the national income accounts and balance of payments.  Remittances for the first semester accounted for about 16 percent of the country’s current account receipts and 11 percent of gross domestic product. 

OFW remittances for the remaining months of 2004 are expected to sustain the uptrend with the onset of the Holiday season.

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[1] Preliminary data from the Philippine Overseas Employment Administration (POEA) on new hires and rehires for the period January-August 2004 showed deployment increased by 6.2 percent to 629,616 from 592,945 a year ago. Newly hired workers, considered as addition to the existing pool of workers, consisted largely of performing artists, healthcare providers, production workers, and household and restaurant support staff.

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