Prophets of doom were quick to predict a continuing decline of remittances following the 3-percent drop in the money sent home by overseas Filipino workers (OFWs) last October.
Cash remittances coursed through banks, according to the Bangko Sentral ng Pilipinas (BSP), amounted to $2.099 billion in October 2016, the lowest monthly remittances since the $1.997 billion posted in January 2016.
The BSP explained that the contraction in October 2016 was due to foreign-exchange fluctuations, including the depreciation of the dollar, as well as other currencies, such as the pound sterling and the euro.
Because of the pessimistic mindset, I think some were surprised when the BSP released its report for the following month, which showed cash remittances surging by 18.5 percent, to reach $2.2 billion, bringing the total for the first 11 months of 2016 at $24.3 billion, a 5.2-percent growth year-on-year.
Economists said the double-digit surge in remittances was an added boost to economic growth in the fourth quarter, when GDP grew by 6.6 percent, higher than the 6.3 percent posted in the same quarter in 2015. The government attributed the full-year GDP growth of 6.8 percent to higher investment and consumption (which is where remittances usually go).
For many years, and despite numerous global crises, remittances have shown resilience. This is why the Philippine economy continues to grow, avoiding the recession that hit export-dependent countries.
I believe remittances will continue to grow, for several reasons. One, the US economy is improving, which augurs well for OFWs and immigrants in the United States and their dependents in the Philippines.
In the Middle East, oil-exporting countries may have been hit by the price slump last year but some are already diversifying their economies and developing other industries, like tourism and retail.
Thus, many hotels, shopping malls and restaurants are rising in the Middle East, the labor requirements of which could be easily filled up by Filipinos.
Another factor behind the resilience of remittances is the resilience of the OFWs itself. Workers who encounter problems in a country usually move to other countries where the job and pay conditions are better.
Hong Kong and Shanghai Banking Corp. said in a media briefing last month that the Philippine economy would remain robust this year despite global uncertainties. The bank cited continuous strong remittances as one of the factors behind the economy’s resilient growth.
While I see a continuing growth in remittances, we cannot, and should not, expect Filipinos to continue working in other countries. In the long run, they will come home.
Personally, I want to see the day when Filipinos are able to make a decent living in the Philippines and no longer need to separate from their loved ones to find better jobs abroad.
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