Remittances by Filipinos at lowest in Nov and Dec ’07

Monthly remittances by the 450,000 Overseas Filipino Workers (OFWs) in the UAE have been adversely affected by the appreciation of the peso, which closed 2007 as the strongest Asian currency.

The December inflows brought to Dh1.9 billion ($530 million) the total UAE remittances coursed through banks in 2007, up 24 per cent from Dh1.6 billion ($427.25 million) the previous year, data posted on the Web site of Philippines' central bank show.

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The UAE remittances brought to Dh8.1 billion ($2.17 billion) the amount of money sent home by OFWs in the Middle East, up 13.6 per cent from Dh7 billion ($1.91 billion) in 2006, according to the Bangko Sentral ng Pilipinas (BSP).

Data shows that remittances from the UAE surged to Dh203.5 million ($55.4 million) in August, when the peso began appreciating strongly against the greenback, but dropped sharply to $27.85 million in November from Dh171.5 million ($46.7 million) in October when Filipinos were hoping that the UAE would revalue the dirham.

BSP lists only the UAE, Saudi Arabia and Kuwait as the countries under its Middle East category. It said the data are based on reports from local banks, thrift banks, offshore banking units and foreign exchange corporations.

However, it stressed that data are not "truly reflective" of the amount of remittances because remittance centres in host-countries course the money through correspondent banks mostly in the US.

"Since banks attribute the origin of funds to the most immediate source, US therefore appears to be the main source of overseas Filipinos' remittances," said BSP, which warned earlier that amounts may not add up due to rounding off.

Saudi Arabia-based Filipinos remitted Dh288 million ($78.4 million) in December, up 4.4 per cent from Dh275.8 million ($75.1 million) a month ago. The November and December inflows were also the lowest monthly remittances from Saudi Arabia for last year.

OFW remittances from Saudi Arabia rose 1.8 per cent to Dh4.2 billion ($1.14 billion) between January and December 2007 from Dh4.1 billion ($1.12 billion) in 2006.

In Kuwait, OFWS remitted through banks Dh22.4 million ($6.1 million) in December, up nine per cent from Dh20.6 million ($5.6 million) in November. Total remittances from Kuwait surged 33.2 per cent to Dh606.7 million ($165.2 million) in 2007, up 33.2 per cent from Dh455 million ($124 million) the previous year.

The more than eight million OFWs (some estimates say over 10 million, including those without proper documents) worldwide sent home a total of Dh53.1 billion ($14.45 billion) for last year, or 13.2 per cent more than the Dh46.86 billion ($12.76 billion) recorded in 2006.

The amount fell short of BSP's original expectation of Dh53.6 billion ($14.6 billion) in total remittances for 2007, but Dh367.3 million ($100 million) more than the revised projection of Dh52.5 billion ($14.3 billion).

Increased remittances reflected the growing number of Filipino workers deployed abroad, according to BSP Governor Amanda Tetangco Jr.

The Philippine Overseas Employment Administration said the December deployment grew 20.8 per cent to 73,643 OFWs from November, bringing to over one million the number of Filipinos who left their country to work overseas in 2007.

Tetangco noted that up to 45 per cent of OFWs worldwide are either paid in US dollars or in currencies pegged to the greenback, making these workers lose large amounts in the fluctuating foreign exchange rates.

The Philippine government said that remittances have been funding domestic consumption despite the excess liquidity due to strong foreign exchange inflows, making OFWs the major drive in their country's robust growth last year.