Transcript The Government of the Bangko Sentral Pilipinas Republic of theng Philippines OFW Remittances in the Philippines Bangko Sentral ng Pilipinas.

The Government of the
Bangko
Sentral
Pilipinas
Republic
of theng
Philippines
OFW Remittances
in the
Philippines
Bangko Sentral ng Pilipinas
Importance of OFW Remittances
Bangko Sentral ng Pilipinas
• Ease foreign exchange
liquidity constraints
• Increase disposable
income and expenditures
which lead to higher GDP
• Contribute to savings and
investments
2
Importance of OFW Remittances
Bangko Sentral ng Pilipinas
US$ billion

OFW
remittances
remains to be
a major
source of
foreign
exchange
Growth Rate (%)
10.7
9
8
7
30
8.6
25
7.6
6.9
6.8
6.05
6
20
6.03
15
5
10
4
5
3
0
2
-5
1
-10
0
-15
1999
2000
2001
2002
2003
2004
2005
3
Importance of OFW Remittances
Bangko Sentral ng Pilipinas
Remittances
as percent of:
Total Cash
GDP
XGS
FDI
GIR
DSB
Remittances
(US$M)
1999
8.9
17.4
393.9
45.1
102.5
6794
2000
8.0
14.7
449.8
40.2
99.6
6050
2001
8.5
17.5
609.8
38.4
91.9
6031
2002
9.0
18.4
384.3
42.1
92.5
6886
2003
9.6
19.6
2183.9
44.4
95.1
7578
2004
9.9
20.0
1823.0
52.7
118.4
8550
2005
10.9
57.8
136.6
(Jan-Sep)
10.7
24.4
916.8
(Jan-Sep) (Jan-Nov)
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Bangko Sentral ng Pilipinas
Profile of OFWs
5
Bangko Sentral ng Pilipinas
STOCK of OFWs
in million
Stock
of OFWs
averaged 4.8
million over
the last four
years.
6
4.7
4.8
4.9
4.9
4
2
0
2001
2002
2003
2004
6
Bangko Sentral ng Pilipinas
STOCK of OFWs
in million
About
95% of
OFWs are
land-based
workers.
6
5
4
3
2
1
0
1999
total
2000
2001
2002
landbased
2003
2004
seabased
7
Bangko Sentral ng Pilipinas
OFW DEPLOYMENT by Skill
in thousand

Over the last five
years, OFWs
deployed are
highly skilled
Filipino workers.
160
140
120
100
80
60
40
20
0
2000
2001
Professionals
2002
Service
2003
2004
Production
2005
J-Oct
Others
8
Concepts/Compilation Methodology
Bangko Sentral ng Pilipinas
BOP Classification
Prior to 2004:
1.
Compensation Income – covers cash remittances
of salaries/earnings of sea-based and land-based
OFWs passing thru the banking system.
2.
Current Transfers – covers gifts/donations
received by resident beneficiaries from migrant
Filipinos
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Concepts/Compilation Methodology
Bangko Sentral ng Pilipinas
BOP Classification
Starting 2004:
OFW transactions are measured and classified using the
one-year residency rule in accordance with the IMF’s
BPM5.
Resident OFWs – those who work abroad for less than
one year (e.g., entertainers / performing artists and seabased workers with short-term working contracts)
1.
2.
Non-resident OFWs – those who work abroad for a
period of one year or more (e.g., other land-based
workers with long-term working contracts)
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Concepts/Compilation Methodology
Bangko Sentral ng Pilipinas
BOP Classification
1.
Compensation of Employees – covers remittances
of resident OFWs
2.
Workers’ Remittances – cover remittances of nonresident OFWs.
3.
Other current transfers – cover gifts/donations of
migrant Filipinos who permanently reside abroad.
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Concepts/Compilation Methodology
Bangko Sentral ng Pilipinas
Measurement & Sources of Data
1.
International Transactions Reporting System
(ITRS) – based on bank reports to BSP on cash
passing through banks and remittances through
money transfer operators (MTOs)
2.
NSO Survey on Overseas Filipinos (SOF) for
estimates of cash passing through other channels
and for remittances-in-kind
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Modes of OFW Remittances
Bangko Sentral ng Pilipinas
Remittance Channels
Mode
% to Total
1995
2004
Average
1995-2004
87.4
95.2
92.0
Banks
67.1
77.2
69.0
Informal
Channels
20.3
18.0
23.0
Non-Cash ( In-kind)
12.6
4.8
8.0
100.0
100.0
100.0
Cash
Total
Source: Survey on Overseas Filipinos (SOF), NSO
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Bangko Sentral ng Pilipinas
Estimation Methodologies:
CURRENT
Concept of residence
 Seabased workers - residents
 Landbased workers
o Entertainers
normally with a
employment contract – residents
o All
others generally having a
employment contract – non-residents
6-month
2-year
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Bangko Sentral ng Pilipinas
Estimation Methodologies: CURRENT
Income Account: Compensation of Employees (CE)
CEIncome: CESeabased + CEEntertainers
 Seabased workers
CESeabased= [Stock of workerst=0 x ave. salary per workert=0] +
[no. of deployedt=1x ave. salary per workert=1] –
[no. of workers with finished contract x ave. salary per worker]
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Bangko Sentral ng Pilipinas
Stock of OFWs
 Based
on benchmark numbers per
category established by the Task Force
 Monthly updating based on a moving
total:
Stock t=1 = Stock t=0 + number of deployed t=1 –
number of workers with finished contract
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Bangko Sentral ng Pilipinas
Estimation Methodologies: CURRENT
Workers’ remittances
Residual of total remittances in
cash 1/ and in kind 2/
1/ FX rem thru banks x Raising factor using
Results of 2002 SOF (1.2 for 2004 and 1.25
for 2003)
2/ Computed based on ratio of import in-kind to
total cash remittances per 2002 SOF
(estimated at 7 percent)
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Bangko Sentral ng Pilipinas
Estimation Methodologies: CURRENT
Current Transfers: Workers’ Remittances (other Land-based
OFWs)
= Non-residents’ Cash Remittances
Remittances in-kind
+
2/
1/ FX rem thru banks x Raising factor using Results of 2002
SOF (1.2 for 2004 and 1.25 for 2003)
2/ Computed based on ratio of import in-kind to total cash
remittances per 2002 SOF (estimated at 7 percent)
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Bangko Sentral ng Pilipinas
Statistical Issues
 Need to harmonize definition of residence with population
statistics / national income account /employment
 Past system of monitoring headcount of migrant workers
has limitations:
o
Difficulty of monitoring those with no valid work documents i.e..,
those counted as tourists upon departure
o
Upward bias in headcount due to: mobility of workers in landlock
countries; returning workers with unexpired work contract and
those frequently on vacation are not netted out in the stock
estimates
 Need to improve design of Survey of Filipinos Overseas
 Need to improve remittance estimates by source country
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Concepts/Compilation Methodology
Bangko Sentral ng Pilipinas
Initiatives to improve Monitoring of Remittances
Estimate potential income of OFWs by:
1.
Establishing a benchmark estimate of stock of OFWs
2.
Gathering data on average salary per worker by skill
category and by country
3.
Review survey design of the SOF
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Bangko Sentral ng Pilipinas
Web:
www.bsp.gov.ph
E-mail: [email protected]
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Bangko Sentral ng Pilipinas
Survey on Overseas Filipinos
• The SOF is a nationwide survey that
seeks to gather information on
Filipino citizens who left for abroad
during the last five years.
• It is a rider survey to the October
round of the Labor Force Survey
(LFS)
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
Objectives
• To provide data on overseas Filipinos (OFs)
particularly the overseas contract workers
(OFWs) and their contribution to the economy
• To obtain national estimates on the number of
OFs including overseas workers and their
socio-economic characteristics
• To provide estimates on the amount of cash
and in kind transfers received by the families
and mode of remittances
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
• The SOF is an annual survey and is a rider
to the Qtr4 Labor Force Survey (LFS)
• The sample households of the SOF are the
same as that of the LFS
• Only the sample households that responded
“YES” to the question, “Is there a family who
left abroad at anytime during the last fiveyear period”
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
The SOF contains:
• Socio-economic characteristics (i.e., sex, age,
marital status, highest educational attainment,
and occupation)
• Place of work abroad
• Remittances (Cash and in-kind)
• Mode of remittances (i.e., banks, friends/coworkers, others)
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?
Filipinos whose departure occurred within the
given five-year period such as:
1) Filipino overseas contract workers (OFW) who
are presently and temporarily out of the
country to fulfill an overseas contract for a
specific length of time or who are presently at
home on vacation but still has an existing
contract to work abroad.
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?
OFWs may be classified as:
a) Land-based workers - hired directly by an
employer abroad, through the assistance of
the POEA or through a private and licensed
recruitment agency.
b) Sea-based workers - work for a shipping
company abroad or manning any kind of
international fishing/passenger/cargo vessels.
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?
2) Other Filipino workers abroad with valid
working visa or work permits
3) Filipinos whose place of employment is
outside the Philippines but whose employer is
the Philippine government.
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?
4) Filipinos who are abroad on training,
scholarships or any other similar purpose,
even if they are known to be working abroad.
5) Filipinos working in other countries as
consultants/advisors of international
organizations.
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Survey on Overseas Filipinos
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?
6) Filipino immigrants and residents in other
countries.
7) Filipinos abroad who are holders of other
types of non-immigrant visa such as
tourist/visitor, student, medical and others.
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Bangko Sentral ng Pilipinas
Estimation Methodologies: CURRENT
OFW-related Travel Import
Travel Import = CERes OFWs- Total Remittances
Total Remittances (banks + non-banks)
= Cash Rem per Bank Report x Raising Factor *
•
Raising Factor using Results of 2002 SOF : 1.2 (2004) and 1.25 (2003)
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Bangko Sentral ng Pilipinas
Estimation Methodologies: CURRENT
OFW-related Travel Export
Travel Export
= Number of OFWs on visit
expenditure 2/
1/
x ave. per capita
1/ Source: POEA, OFW Deployment (Rehires)
2/ Source: National Accounts, Personal Consumption
Expenditure (current prices)
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