Fortify alternatives to remittances, Dof urges
THE Philippines should strengthen alternatives to remittances as a source of income, the Department of Finance’s chief economist said amid global market volatility.
“Given the volatility of the world economy, alternative sources of income such as the BPO ( business process outsourcing) industry should be strengthened,” Finance Undersecretary Gil S. Beltran said in an internal economic bulletin last week.
Latest data from the Bangko Sentral ng Pilipinas showed that remittances for the first four months of the year totaled $8.67 billion, a 3.1% growth from the same period last year.
This was despite traditional destinations such as Japan, Saudi Arabia, the United Arab Emirates, Hong Kong and the United Kingdom recording negative growth in remittances.
Inflows from Filipinos in Canada, one of the top 10 destinations, even saw a steep 34.7% drop to $ 217.6 million, from $ 333.5 million for the first four months of 2015.
Double-digit growth in miscellaneous countries, such as “other Asia, other Americas, other Oceania and other Middle Eastern countries,” helped offset the declines in major host countries. Remittances from African countries, for one, grew 118.4%.
The decline in remittances from Saudi Arabia and the UAE was countered elsewhere in the region, as inflows from the Middle East grew 13.95% overall in spite of fluctuating oil prices.
This trend, Mr. Beltran noted, “reflects greater dispersion of OFWs who are shifting towards emerging, fast-growing labor markets.”
Still, he noted the role of remittances in spurring domestic consumption, which commonly accounts for a bulk of growth in the gross domestic product.
“If domestic consumption is the driver of the Philippine economy, then its fuel is remittances,” Mr. Beltran said. “The Philippine government should ensure its continued inflow through investing in human capital development.”