Money sent home by Filipinos working overseas reached a record $1.47 billion in March, but the pace of growth has slowed to 3.04 percent as traditionally strong remittance sources, like the US and the Middle East, contracted or were flat.

While remittances in March were higher than the $1.3 billion received in February—when it posted an annual growth of 4.9 percent from an almost flat growth in January—prospects of continuing recovery was interrupted. The March 2009's pace of 3.04 percent was even lower than the 3.35 percent posted in October 2008, when months of double digit annual growths prior to the global economic woes abruptly ended.

March is traditionally a strong month for remittances as the overseas Filipino workers (OFW) send home money to fund education-related expenses. Final amortization of tuition fees are due and some graduations are held in March.

Remittance inflows have traditionally been posting monthly and annual growth rates as more Filipinos leave for work abroad. About 4,000 leave daily, adding to the estimated one-tenth of the population already based abroad. OFWs send the fourth largest remittance funds among other migrant labor-sending countries, according to the World Bank.

The global economic slowdown, however, has led economists to wonder if the rich countries that host OFWs could continue to absorb —and retain — migrant workers as they, too, try to provide jobs to their own citizens.

Middle East and US

Remittances from the US, which usually account for and to which some transfers are coursed to for over 50 percent of total remittances, reached $779 million in March. This brought the money sent from and through the US to $2.103 billion for the first three months—slightly lower than the $2.11 billion in the first quarter of 2008.

Meantime, OFWs from countries in the Middle East, another major source, sent $210 milion in March. This was 6 percent lower than the same month last year—the first time in years that remittances from the oil-rich region contracted.

The slack was picked up by a 10.45 percent net increase in funds sent home by OFWs in Asian countries, such as Hongkong and Taiwan. Those from Japan and Singapore sent lower amounts, though.

OFWs in Asian countries sent sent home $178 million in March, or $517 million in the first quarter.

Those in Europe also sent home $284 million, or 4.5 percent more, in March, bringing the entire quarter volume to $760 million, a 4 percent increase.

Deployment

Monetary officials have been citing deployment reports from their counterparts in the labor department. In a statement, the Bangko Sentral ng Pilipinas (BSP) cited the 27.3 percent increase in the deployment of OFWs in the first 2 months of the year, and the 279,889, or an almost 37 percent increase in, processed total active job orders as of May 12, 2009. It said that bulk of the job orders were in the production, services, and professional skill categories.  

Citing the Philippine Overseas Employment Administration (POEA), the BSP said, "[the] latest labor statistics showed that the increase in the number of displaced OFWs has slowed down as the government intensified its  efforts to directly assist the displaced OFWs find alternative jobs in emerging markets and in countries that are least affected by the crisis."

Recruitment agencies have contested the government's deployment data since the rosy official numbers do not match their experience of increasing OFW contracts no longer being renewed. They said OFWs who returned to their work abroad after their Philippine vacation must have bloated the government’s count of ‘rehires’, which refer to those who actually renewed their job contracts and returned to their previous foreign employers.

The government continues to give assurances that jobs overseas remain available to absorb Filipinos looking for employment. In addition to labor accords signed between the Philippine government and host countries, like Canada, Australia, Japan, Korea, Qatar, and Algeria, the government said it has intensified its efforts to redeploy retrenched OFWs to countries that have not been hard-hit by the global economic crisis such as Saudi Arabia and Libya.

Consumption

The BSP expects remittances, a key pillar of the domestic economy as it drives consumption and boosts the peso, to likely stay flat this year from 2008's $16.4 billion total.

But BSP governor Amando Tetangco said earlier this week it was possible to see better than zero growth in remittances this year if demand for Filipino labor abroad continues despite the global downturn. Monetary officials' remittance forecasts have been more rosy than that of the World Bank's, multinational banks', and other groups that expect dramatic declines in the range of 4 to 17 percent.

Capitalists watch the pace of remittance growth for their own business and investment strategies. So far, local companies that benefit from remittance-led consumption have disclosed to the stock market lower or flat sales.

Property companies have been experiencing slower sales in residential houses, which in the past have been become one of the choice investment outlets of OFWs. Mobile phone companies have also been seeing their subscribers sending less text messages, a popular form of communication for almost a decade. SM Prime, which has the biggest mall network nationwide, has experienced lower revenues from cinemas and other recreational activities.