Remittances to Philippines surge 41.5pc

These inflows helped bring to over Dh7 billion ($1.91 billion) the money sent through banks by overseas Filipino workers (OFWs) from the Middle East for the 10-month period, or up 26.52 per cent from Dh5.51 billion ($1.5 billion) a year ago. BSP lists only Kuwait, Saudi Arabia and the UAE under its Middle East category.

Governor Amando Tetangco, of Bangko Sentral ng Pilipinas (BSP), said in Manila that the increase in remittance inflows is partly due to improved access by OFWs to Philippine money transfer agents, noting that there have been growing partnerships between local financial institutions and their foreign counterparts.

Monthly remittances from the UAE, however, dropped 1.4 per cent to Dh171.43 million ($46.7 million) in October from Dh173.85 in September, BSP data released yesterday show, a fact that OFWs here ascribe to the declining value of the dollar against the dirham.

In September the remittances of UAE-based OFWs dropped 14.5 per cent to Dh173.7 million ($47.34 million) from Dh203.3 million ($55.4 million) in August, due to the continuing appreciation of the peso against the dirham.

Foreign exchange bureaus here convert into dollars the dirhams being sent by OFWs to their families while the receiving banks in the Philippines convert these dollars into pesos. Each remittance is charged Dh15 and the receiving banks impose a corresponding charge called "back-end fees".

Most of the estimated 250,000 OFWs in the UAE have reduced their monthly remittances thinking that their host-government would revalue the dirham, abandon the dollar-peg and embrace a currency basket.

"We have been waiting for the UAE government to revalue the dirham so we can have a stronger purchasing power," said Sally, a sales clerk in Bur Dubai.

On Thursday the Philippine peso continued its more than seven-and-a-half-year' rise at 11.11 against the dirham, which is worth 3.68 to the US dollar based on the foreign exchange rate used by four major Philippine banks having tie-ups with exchange centres in the UAE. The dirham is officially pegged at 3.67 to the greenback.

The total amount of money sent home in October by over 10 million OFWs worldwide jumped 17.1 per cent year-on-year to an all-time high of Dh5.1 billion ($1.4 billion), BSP data show adding that the September inflows reached Dh4.2 billion ($1.14 billion).

These brought to Dh43.6 billion ($11.9 billion) the 10-month foreign exchange inflows from OFWs, or up 15.2 per cent from Dh37.8 billion ($10.3 billion) for the same period last year.

OFW remittances have grown at a compounded annual rate of 11 per cent over the last 10 years, accounting for 10 per cent of the Philippines' total economic output.

Kuwait-based Filipinos sent home Dh45 million ($12.24 million) in October, a 10 per cent drop from Dh50 million ($13.6 million) in September. However, they registered the highest increase of 65 per cent for the 10-month period to Dh564 million ($153.6 million) from Dh342 million ($93.1 million).