Economy



By Keith Richard D. Mariano


OFWs should diversify away from Middle East, DoF says




Posted on January 25, 2016


THE PHILIPPINES should continue diversifying the destinations of overseas Filipino workers (OFWs), the chief economist at the Department of Finance (DoF) said, as the decline in oil prices continues to weigh on Middle Eastern economies.

“While OFWs are in professions that are socially necessary (e.g., nursing, education, management) and are therefore less prone to job turnover, reduced concentration could minimize risks from socio-political upheavals and economic instability,” Finance Undersecretary Gil S. Beltran said in an internal economic bulletin last week.

Latest data from the Bangko Sentral ng Pilipinas show that cash remittances from OFWs increased 3.2% year on year to $2.19 billion in November, accelerating from the flat growth in October and sustaining the recovery from the 0.6% contraction in August.

The November remittances brought the year-to-date amount to $22.83 billion or 3.6% above the $22.03 billion recorded for the comparable 2014 period. The central bank expects cash remittances to total $25.3 billion for 2015.

The United States remains the biggest source of remittances coursed through banks, accounting 40% of last year’s total. The Middle East emerged as the second leading source with a 23% share, followed by Asia’s 15.5% and Europe’s 14.5%.

“So far, the steep drop in crude petroleum prices has not affected Middle East remittances,” Mr. Beltran said, citing the 9.6% year-on-year increase in remittances from the oil-producing region, to $5.24 billion from $4.78 billion, in the January-November 2015 period.

“This implies that Middle Eastern economic activities continued to be pursued, financed largely by reserves.”

Nevertheless, Mr. Beltran said the Department of Labor and Employment “should be ready with viable options in case the economic crunch starts to bite” and that the country “should continue exploiting nontraditional markets for deploying OFWs to reduce risks.”

“The destination of OFWs is becoming more dispersed. Except for Europe and Oceania, the share of other countries which are usually the smaller countries is growing faster than traditional markets,” the Finance official noted.