MANILA — While government economic managers report that overseas Filipino remittances are increasing, actual remittances or transfers are in fact slowing, according to research group IBON.
Data from the Bangko Sentral ng Pilipinas (BSP) show that the year-on-year growth of remittances dropped from 4.9% in February and 3.1% in March to just 2.2% in April. But government reported that deployment of OFWs continues to rise while displaced workers are able to find alternate work abroad. According to IBON, if remittances are slowing despite rising deployments, this may imply that average earnings of OFWs are dropping and also lower incomes for each remittance-dependent household.
Thus, depressed consumption and economic growth that the country is experiencing is not just because migrant workers and their families are saving but also because remittances are slowing to begin with.
The deepening global crisis has actually already caused overseas remittances in the first four months of 2009 to fall in 10 out of the 20 countries which account for 96% of overseas remittances back to the Philippines. Meanwhile, remittance growth in another four countries is already slowing and could soon turn negative, with only slight growth in the remaining six countries. Unless these trends reverse, they indicate further depressed consumption and growth in the economy as well as deteriorating welfare for millions of remittance-dependent households around the country.
The largest fall was in remittances from the US which shrank 10.4% in the January-April 2009 compared to the same period last year. The US$2.29 billion in remittances from the US in the first four months of 2009 was US$266.4 million less than the US$2.55 billion remitted in the same period in 2008. Remittances recorded as coming from the US accounted for 48% of total flows back to the country in 2008.
Also shrinking were remittances from the United Kingdom (9.4% fall), Italy (24.5%), United Arab Emirates (1.9%), Hong Kong (22.4%), Taiwan (32.5%), Bahrain (10.4%), Kuwait (52.7%), South Korea (12.6%) and Spain (10.1%). These 10 countries in total remitted US$458.6 million less in the first four months of 2009 compared to the equivalent period last year.
Remittances from Saudi Arabia, Canada, Singapore and Australia were still growing but at slower rates compared to previous years. Only five countries– Japan, Germany, Norway, Qatar, Greece and Malaysia– recorded faster growth rates in remittances in the first four months. These barely compensated for the falling remittances in the other countries however, and growth in total remittances in the first four months of 2009 drastically slowed to just 2.6% from 14.5% growth in the same period in 2008 and 26.1% in 2007.
These top 20 remittance-sending countries together accounted for US$5.21 billion in remittances or 95% of the US$5.50 billion total in the first four months of 2009.
The shrinking or slowing remittances across so many countries underscores the global nature of the turmoil and how overseas Filipinos are not immune or “recession-proof”. As it is, remittances by Filipinos from 63 countries have shrunk with those from dozens more countries already slowing.
These may be early indications that the country’s cheap labor export policy is starting to reach its limits in the face of global migration trends in recent years and the global turmoil since last year. Remittance growth in each of the first three months of 2009 is slowing and already much lower than in previous years, while the seemingly large increase in deployments last year has still not been enough to reverse its overall trend of slowing growth. The country cannot continue to rely so much on foreign jobs for its citizens. More than ever, economic policies have to be geared towards creating domestic jobs through real agrarian reform, agricultural development and building Filipino industry. (end)
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.