OFW money a saving grace for PHL economy in 2012

Remittances — along with robust consumer spending and stable commodity prices —will act as a saving grace, helping buoy the Philippine economy next year.   Despite the global economic uncertainties, remittances from overseas Filipino workers (OFWs) will grow in 2012, albeit slower at 8 percent from double-digit growth in previous years.   Bangko Sentral ng Pilipinas (BSP) Governor Armando Tetangco Jr. expects strong demand for Filipino workers abroad — an assurance of steady inflow of remittances.   His attitude is based on the number of approved job orders that increased by 11.6 percent to 645,775 in January to November this year compared from 578,535 a year earlier.   These are production, service, professional and technical jobs in Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Hong Kong and Taiwan.    BSP data showed that OFWs sent $16.53 billion to the Philippine in the 10 months to October, up 7 percent from $15.45 billion a year earlier.   The World Bank (WB) estimates OFW remittances at $23 billion this, making the Philippines the fourth largest remittance-receiving country after India, China and Mexico.   WB development prospects group director Hans Timmer said remittance flows to developing countries have been resilient. "Remittance flows to all developing regions have grown this year for the first time since the financial crisis," he said.   The risks   However, WB noted certain risks for the Philippines such as Saudi Arabia's plan to replace foreign labor with local workers. Over 1 million OFWs now work in Saudi Arabia.   It also mentioned persistent high rates of joblessness in US and Europe, as well as volatile exchange rates and oil prices.   A report published by First Metro Investment Corporation (FMIC) and University of Asia and the Pacific (UA&P) last November also noted a robust demand for Filipino workers next year, projecting growth in remittances of more than 8 percent.   The amount of money sent home by OFWs may even bounce back to double-digit growth in the coming months, according to the FMIC-UA&P report.   Money from OFWs will keep coming because of the relatively stable peso-dollar exchange rate.   “The peso-dollar exchange rate will continue to be contained even with the instability of the global market given that the Philippines has a high foreign exchange reserve,” it explained.   A comfortable range   The FMIC and UA&P report said the peso exchange rate remained within a comfortable range of P43 to P44, with remittance inflows beefing up the country’s dollar reserves.   “Fitch Ratings said that the Philippines can withstand the effect of financial pressures because of its sturdy foreign exchange reserves,” it added.   Similarly, global money transfer firm Western Union predicts strong inflow of OFW remittances next year.   Patricia Ringen, senior vice president for Western Union's Pacific and Indochina, said the company continues to meet the fast-changing money transfer needs of Filipino consumers.   Data from the Philippine Overseas and Employment Administration showed that 1.47 million Filipino workers were deployed in 2010. — VS, GMA News