OFW remittances contribute to peso's appreciation – BSP
Davao City (23 October) -- Rising remittances from overseas Filipino workers (OFWs), Philippine exports and foreign capital in the country are contributory factors to the Philippine currency's appreciation against the dollar.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Gunigundo attributed the dollar's weakening to the US' fiscal deficit from higher expenses than earnings and its current accounts deficit from lesser American exports than imports.
OFWs remitted through the banks $9.3-billion from January to August 2007 which is 15.3% higher than the level recorded in the same period last year.
Remittances from more than eight million OFWs have helped in the country's economic growth by boosting consumption and supporting the peso, which has risen by 11.3% to become the best performing currency in Asia after the Indian rupee. The peso closed at P44.05 to the dollar (Oct 17).
The sustained growth in remittances was due to demographic trends in advanced economies, geographical and skill diversification with high-skilled and therefore better-paid Filipino workers earning higher salaries.
The BSP expects $14.7 billion in remittances by the end of this year, which is almost 15% higher than the $12.8 billion overseas Filipinos send home in 2006.
Major sources of remittances were the US, United Kingdom, Italy, the United Arab Emirates, Saudi Arabia, Canada, Singapore, Japan and Hong Kong.
President Arroyo has ordered the DOLE and NEDA to conduct a study on the impact of the strong peso on the OFWs and their families.
The President also called on the BSP and Department of Finance to find ways to bring down the remittance fees being paid by OFWs just to send home their earnings to families.
The President also directed concerned agencies to develop supplemental income-generating activities for the OFWs and their families so that the remittances would go to more productive use. (PIA XI) [top]