By Ted P. Torres Updated January 20, 2009 12:00 AM
[ philstar.com ]
The inflow of remittances from overseas Filipino workers (OFWs) will likely slow to a four-percent growth this year, from an expected 16 percent last year, due to the lingering impact of the global financial crisis, the World Bank said in a report.
The financial institution said remittance growth, although lower, will be driven mainly by remittances from OFWs employed in recession-proof industries and areas.
“Downside risk to that projection is significant and would have important implication for the economy. In particular, if the global economic slowdown is more protracted than expected, the likelihood of cuts in OFWs increases,” the World Bank said in its quarterly update released yesterday.
Data from the Bangko Sentral ng Pilipinas (BSP) indicated that remittances coursed through the country’s banking system already reached $15 billion as of end-November last year.
The BSP is expecting total remittances to reach $16.3 billion for the whole of 2008, or a 16-percent growth rate.
The World Bank added that remittances are also affected by macroeconomic prospects and investment opportunities at home. “This motive for remittance might become weaker as the Philippine economy, and the property sector in particular, slow down.”
Concerns, however, were also raised on the extent of the mass layoffs being experienced by overseas Filipinos.
“Significant uncertainty surrounds the unemployment forecast as the size of the overseas Filipinos that might have to return to the country is subject to large uncertainly and their number is very large,” the World Bank said.
An estimated four to five million workers may have to return to the Philippines after being laid off from various countries of employment.
These returning Filipinos may have to compete with the country’s total workforce of 36.2 million, and another 2.7 million unemployed in 2007.
The United States, Hong Kong, Singapore and several countries in Europe have already declared they are in economic recession while the United Kingdom is expected to declare a state of recession soon.
Roughly 60 percent of remittances from overseas Filipinos emanate from the United States. Likewise, 30 percent of remittances come from sea-based Filipino workers.