Overseas Filipino Worker (OFW) Remittances, along with Business Process Outsourcing income represent a direct injection of foreign exchange into the country. Taken together they represent almost 50 billion dollars or a fourth of our total GDP over the last few years.
This is significant because they represent incomes that are made outside the country, with minimal financial cost or input from local sources, generatina clear net income.
This tap of direct foreign money is the envy of many countries, since it can continue providing the incone despite calamities, unrest or similar turmoil in the home country. Imagine offshore investments that keep generating revenue even when your local economy is down.
Of course there are social costs especially for families. Thankfully, nowadays technology provides a platform for constant family communication that was bsent in previous years.
That said, data from the Bangko Sentral shows that remittances from overseas Filipinos (OFs) amounted to USD2.56 billion in February 2019, higher by 1.2 percent from USD2.53 billion in February 2018.This brings cumulative remittances for the first two months of the year to USD5.30 billion, representing a 2.3 percent year-on-year growth.
At the same time, cash remittances coursed through banks posted a 1.5 percent growth to USD2.30 billion in February 2019 from USD2.27 billion last year. This generates i cone for local banks.
For the first two months of 2019, cash remittances amounted to USD4.78 billion, an increase of 3.0 percent compared to the USD4.65 billion level in the same period last year.
By country source, the United States registered the highest share of overall remittances for the period at 35.5 percent. It was followed by Saudi Arabia, Singapore, United Kingdom, United Arab Emirates, Japan, Canada, Qatar, Hong Kong, and Germany.
The combined remittances from these countries accounted for 77.3 percent of total cash remittances for January to February 2019.
The continued uptick in these figures bode well for the economy that keeps growing at the 6% level. This bouys the banking sector and keeps our foreign exchange rates balanced as we take in more foreign direct investments and debt to fund the ambitious build build build program.
Naturally, the increase in local opportunities as the economy grows will absorb some OFWs but not all. In the coming years, will we see a decrease in overseas deployments and a reduction on OFW remittances?