MANILA, Philippines — Filipinos working overseas sent an unprecedented amount of money home last December, taking 2007 inflows to a record $14.45 billion, and exceeding the central bank’s target by $100 million, data showed on Friday.
The Bangko Sentral ng Pilipinas, the central bank, said $1.396 billion was sent in December, the highest for any single month and the 20th straight month that inflows topped $1 billion. The December figure was up 5.8 percent year-on-year.
For the full year, remittances increased 13.2 percent over 2006 and exceeded the $14 billion target.
Remittances in 2006 totaled $12.8 billion.
The central bank figures do not include remittances sent through non-banking channels.
Remittances accounted for about 10 percent of nominal gross domestic product in 2007, central bank governor Amando Tetangco Jr. said in a statement.
These inflows are propping up domestic demand, fueling GDP growth to 7.3 percent in 2007 — the best growth in 31 years. They are also providing strong support for the peso, which gained nearly 19 percent against the US dollar last year.
“Robust remittance flows in 2007 were due to continued demand abroad for
Filipino workers and enhanced remittance services provided by banks and non-bank
remittance agents,” Tetangco said.
A total of 1.07 million Filipinos found jobs abroad last year, representing a 1.0 percent increase from the previous year.
The inflows, equivalent to around 10 percent of gross domestic product, are crucial for the domestic economy, fuelling a local spending boom.
They helped drive the peso up over 19 percent against the US dollar in 2007.
But this currency surge means that overseas’ workers foreign currency salaries are translating into less pesos. Authorities are offering hedging facilities to some overseas workers to help lessen the impact from the currency’s rise.
Over eight million Filipinos, around 10 percent of the population, work abroad as nurses, doctors, maids, sailors, musicians, IT professionals and in other roles.
“The significant rise in remittances in 2007 also resulted from the increased presence of commercial banks and local money transfer agents in countries with high concentrations of Filipino manpower,” Tetangco said.
The bulk of remittances come from the United States, the UK, Italy, the Middle East and elsewhere in Asia.
Local banks have said that double-digit growth in remittances is not sustainable.
Previous surges have been led by lenders encouraging overseas Filipinos to send money home officially rather than with friends and relatives but the proportion of inflows coming in through unofficial channels has dropped to around 5 percent of total inflows compared with 20 percent in 2005. (Compiled from reports of Thomson Financial, Reuters and Associated Press)
USEFUL REFERENCE:
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