[ Malaya.com.ph ] January 12, 2009
International investment bank JP Morgan on Friday said that the remittances of overseas Filipinos will not contract in 2009 due to the diversified base of workers that are "increasingly employed in service/professional industries".
However, the US-based bank sees flat growth for this year.
"We expect remittances to see flat growth in 2009 on the back of the very weak global economic backdrop. Nonetheless, we do not expect remittances to contract," it said.
JP Morgan said that based on official estimates, there are 8.7 million OFWs that are spread out in 202 different countries across the globe, with most countries accounting for less than 10 percent each of the total stock of workers.
The exceptions are the US (32 percent), the Saudi Arabia (12 percent), UAE (6 percent) and Canada (5 percent).
"In the US and Canada, however, the vast majority of workers have permanent status that allows them better flexibility to look for replacement jobs in case of retrenchment as opposed to contractual workers," JP Morgan said.
Furthermore, the bank said that roughly 65 percent of overseas workers deployed in the past decade were in service or professional industries.
"(They) are less economically sensitive and we believe will be more resilient to the global downturn," the report added.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco has said that they expect remittances from overseas Filipinos to slow down this year—growing between 6-9 percent only compared to the projected 13 percent growth in 2008.
This means, using the BSP’s minimum growth projection, remittances will hit $17.9 billion in 2009, $17.3 billion of which will be coursed through the banking system.
For 2008, the BSP estimates that the banking system captured $16.3 billion in remittances, up by 13 percent.
Tetangco said that the slowdown in money sent home by overseas Filipino workers will be one of the direct effects of the financial turmoil that is pushing other countries into recession.
According to the latest figures from the BSP, cumulative remittances for the first 10 months of 2008 totaled $13.7 billion, 15.5 percent higher than the level recorded during the same period in 2007 when remittances stood at $11.9 billion.
For the whole of 2007, remittances reached $14.5 billion, 13 percent higher from 2006’s $12.76 billion.
Money sent home by overseas Filipinos for the month of October last year alone reached $1.4 billion, the second biggest monthly inflow last year.
Remittances have remained above the one billion dollar-level for the past 30 months.
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