Philippines Exclusive: A Recession? Not for OFWs

The spectre of recession may have cast a long shadow on the host countries, but there's no stopping the overseas Filipino workers (OFWs) from doing what they do the best – sending remittances home. In a year when many de v e l oped markets risk facing bulging unemployment rolls, the OFWs are surging ahead, pocketing more overseas jobs and hence sending higher remittances to their home country.

Not only has the country so far remained unscathed by the global financial crisis, experts anticipate an increase in remittances, the lifeblood of the Philippines economy, because of the economic slowdown elsewhere. According to Dr. Fernando Aldaba of the Ateneo de Manila University, the loss of jobs in the financial sector is likely to be compensated by increased employment for the OFWs in other sectors, particularly healthcare. The US slowdown, according to the experts, is likely to compel the service providers look for cheaper foreign labour during the months ahead.

From January to August this year, a total number of 884,907 Filipinos have ventured overseas for employment. This shows a 26.4% growth over 699,937 in the same period last year. And this figure is expected to cross the 1 million mark soon and reach 1.1 million by the year end (Philippine Overseas Employment Agency).

The increased deployment of workers abroad has led to an 18.2% yearly jump in remittances for the first seven months this year. According to central bank estimates, remittances received through formal channels are expected to register nearly 9% growth in 2008 to $15.7 billion, compared to $14.45 billion last year.

Commenting on the migration trend, Bangko Sentral ng Pilipinas (BSP) Governor Amando M Tetangco recently said that the rise in remittance flow could be attributed to foreign companies' preference for the highly-skilled and English speaking Filipino workers.

While the increased migration and ready acceptance of OFWs in overseas job markets helped the cause, a windfall gain came in the weakening of peso versus dollar that increased the value of remittances sent home. The peso slipped by 17.0% against the dollar between February 2008 and September 2008.

However, there is a growing concern in the country about the need for use of the increasing flow of remittances into long term productive usage. Economists suggest emulating some African countries and pool the resources to put the hard-earned money into infrastructure and economic development.