OFW demand accelerates growth in remittances

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Other countries’ need for doctors and health workers as well as skilled builders and cleaners – as they recover from the pandemic – as well as increased use of digital financial services are driving deployment there. of Filipino workers and boost remittances to the Philippines.

Based on the latest forecast from the Bangko Sentral ng Pilipinas (BSP), remittances from Filipino Overseas Workers (OFW) are expected to increase by 4% annually, not only in 2022 but also in 2023, in line with trends to long term.

In 2021, personal remittances reached a new high of $34.9 billion, of which 90% or $31.9 billion was sent via banks.

This amount increased by 5.1% from $33.2 billion in 2020, after decreasing by 0.8% from $33.5 billion in 2019. Over the past 10 years, remittances of personal funds increased by an average of 5.7% per year.

“It’s getting harder and harder [for remittances] grow by 5%, 7% or so, because we already have a huge base,” BSP Governor Benjamin Diokno said during a press briefing.

Substantial growth

“It would have been easier if we had $10 billion a year, but at over $30 billion a year, 4% or 5% growth is substantial,” Diokno added.

BSP said the main factors fueling the growth in remittances include rising global demand for OFW, especially jobs related to medical and health services as well as construction and maintenance. household – jobs that help host countries in the pandemic recovery process.

In 2021, the number of OFWs deployed to other countries jumped 35% to 745,000, rebounding from a 75% decline in 2020.

Bilateral agreements

In addition, the Ministry of Labor and Employment has entered into bilateral labor agreements with host countries to continue to allow entry of OFWs.

In addition, there is an increased use of digital financial services in remittances, which reinforces the upward trend in the adoption of these technologies in both domestic and cross-border transactions.

Also, OFWs tend to keep a proportion of their remittances in Philippine pesos for family upkeep, especially for basic spending needs.

Diokno noted that remittances have helped boost consumption in the Philippines during the pandemic.

The BSP Q4 2021 Consumer Expectations Survey showed that households receiving remittances used the funds to purchase food and other household needs (96%); paying for education (50.5%); medical expenses (45.8 percent); and for savings (31.7%).

Diokno said the BSP encourages senders and receivers to increasingly channel remittances into savings and investments by cultivating financial learning between them. INQ

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