Remittances sent to the Philippines by overseas Filipino workers (OFW’s) grew faster than expected in 2009 reaching over $17 billion for the first time saving the economy from recession.
Officials said that demand for Filipino labour did not shrink despite the global financial crisis.
Money sent by OFW’s rose by 5.6-percent from the $16.43 billion the previous year, the Bangko Sentral ng Pilipinas (BSP) reported this week.
The latest growth in remittances outpaced the BSP’s own forecast of only 4 percent. It also proved wrong earlier predictions that money from Filipinos overseas will shrink by as much as 30 percent because of layoffs and company closures in countries that fell into, including the United States.
In December alone, remittances amounted to $1.58 billion, up 11.4 percent from the $1.41 billion recorded in the same month the previous year.
Remittances are a closely watched economic indicator. These largely fuel household consumption, which in turn serves as one of the key drivers of the domestic economy.
According to estimates, remittances are equivalent to ten percent of the economy’s total output.
Economic managers said sustained rise in remittances was one reason the Philippines last year avoided a recession, from which many countries suffered. The Philippines, measured by its GDP, grew by 0.9 percent last year.
“Remittances remained resilient amid the recent global financial crisis, providing strong support to domestic demand,” the BSP said in a statement.
Money sent by Filipinos overseas is credited for helping beef up the country’s total reserves of foreign currencies, or the gross international reserves (GIR). The GIR, which indicates a country’s ability to engage in commercial transactions with the rest of the world, stood at a historic high of $45 billion by the end of 2009.
The country’s dependence on remittances, however, is hit by some critics. They said that although remittances help boost the economy, decision to work abroad has adverse consequences on family relations. Source Inquirer.net