The Government of the Republic of the Philippines Bangko Sentral ng Pilipinas OFW Remittances in the...
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Transcript of The Government of the Republic of the Philippines Bangko Sentral ng Pilipinas OFW Remittances in the...
The Government of the Republic of the Philippines Bangko Sentral ng Pilipinas
Bangko Sentral ng Pilipinas
OFW OFW RemittancesRemittances
in thein thePhilippinesPhilippines
2
Bangko Sentral ng Pilipinas
• Ease foreign exchange Ease foreign exchange liquidity constraintsliquidity constraints
• Increase disposable Increase disposable income and expenditures income and expenditures which lead to higher GDPwhich lead to higher GDP
• Contribute to savings and Contribute to savings and investmentsinvestments
Importance of OFW RemittancesImportance of OFW Remittances
3
Bangko Sentral ng Pilipinas
8.6
7.6
6.9
6.036.05
6.8
0
1
2
3
4
5
6
7
8
9
1999 2000 2001 2002 2003 2004 2005-15
-10
-5
0
5
10
15
20
25
30 OFW OFW
remittances remittances remains to remains to be a major be a major source of source of foreign foreign exchangeexchange
US$ billionUS$ billion Growth Rate (%)Growth Rate (%)
Importance of OFW RemittancesImportance of OFW Remittances
10.7
4
Bangko Sentral ng Pilipinas
RemittancesRemittancesas percent of:as percent of: GDPGDP XGSXGS FDIFDI GIRGIR DSBDSB
Total Cash Total Cash
Remittances Remittances
(US$M)(US$M)
19991999 8.98.9 17.417.4 393.9393.9 45.1 45.1 102.5102.5 67946794
20002000 8.08.0 14.714.7 449.8449.8 40.240.2 99.6 99.6 60506050
20012001 8.58.5 17.517.5 609.8609.8 38.438.4 91.991.9 60316031
20022002 9.09.0 18.418.4 384.3384.3 42.142.1 92.592.5 68866886
20032003 9.69.6 19.619.6 2183.92183.9 44.444.4 95.195.1 75787578
20042004 9.99.9 20.020.0 1823.01823.0 52.752.7 118.4118.4 85508550
2005 2005 10.910.924.424.4
(Jan-Sep)(Jan-Sep)
916.8916.8
(Jan-Nov)(Jan-Nov)57.857.8
136.6136.6
(Jan-Sep)(Jan-Sep)10.710.7
Importance of OFW RemittancesImportance of OFW Remittances
5
Bangko Sentral ng Pilipinas
Profile of OFWsProfile of OFWs
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Bangko Sentral ng Pilipinas
STOCK of OFWsSTOCK of OFWs
Stock of Stock of OFWs OFWs averaged 4.8 averaged 4.8 million over million over the last four the last four years. years.
in millionin million
4.7 4.8 4.9 4.9
0
2
4
6
2001 2002 2003 2004
7
Bangko Sentral ng Pilipinas
0
1
2
3
4
5
6
1999 2000 2001 2002 2003 2004
total landbased seabased
About 95% About 95% of OFWs are of OFWs are land-based land-based workers.workers.
STOCK of OFWsSTOCK of OFWsin in millionmillion
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Bangko Sentral ng Pilipinas
Over the last five Over the last five years, OFWs years, OFWs deployed are deployed are highly skilled highly skilled Filipino workers.Filipino workers.
OFW DEPLOYMENT by SkillOFW DEPLOYMENT by Skillin thousandin thousand
0
20
40
60
80
100
120
140
160
2000 2001 2002 2003 2004 2005 J-Oct
Professionals Service Production Others
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Bangko Sentral ng Pilipinas
BOP ClassificationBOP Classification
Prior to 2004:Prior to 2004:
1.1. Compensation Income – covers cash remittances Compensation Income – covers cash remittances of salaries/earnings of sea-based and land-based of salaries/earnings of sea-based and land-based OFWs passing thru the banking system.OFWs passing thru the banking system.
2.2. Current Transfers – covers gifts/donations Current Transfers – covers gifts/donations received by resident beneficiaries from migrant received by resident beneficiaries from migrant Filipinos Filipinos
Concepts/Compilation MethodologyConcepts/Compilation Methodology
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Bangko Sentral ng Pilipinas
BOP ClassificationBOP Classification
Starting 2004:Starting 2004:
OFW transactions are measured and classified using the OFW transactions are measured and classified using the one-year residency rule in accordance with the IMF’s one-year residency rule in accordance with the IMF’s BPM5.BPM5.
1.1. Resident OFWs – those who work abroad for less than Resident OFWs – those who work abroad for less than one year (e.g., entertainers / performing artists and one year (e.g., entertainers / performing artists and
sea- based workers with short-term working contracts)sea- based workers with short-term working contracts)
2.2. Non-resident OFWs – those who work abroad for a Non-resident OFWs – those who work abroad for a period of one year or more (e.g., other land-based period of one year or more (e.g., other land-based workers with long-term working contracts) workers with long-term working contracts)
Concepts/Compilation MethodologyConcepts/Compilation Methodology
11
Bangko Sentral ng Pilipinas
BOP ClassificationBOP Classification
1.1. Compensation of Employees – covers remittances Compensation of Employees – covers remittances of resident OFWsof resident OFWs
2.2. Workers’ Remittances – cover remittances of non-Workers’ Remittances – cover remittances of non-resident OFWs.resident OFWs.
3.3. Other current transfers – cover gifts/donations of Other current transfers – cover gifts/donations of migrant Filipinos who permanently reside abroad.migrant Filipinos who permanently reside abroad.
Concepts/Compilation MethodologyConcepts/Compilation Methodology
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Bangko Sentral ng Pilipinas
Measurement & Sources of DataMeasurement & Sources of Data
1.1. International Transactions Reporting System International Transactions Reporting System (ITRS) – based on bank reports to BSP on cash (ITRS) – based on bank reports to BSP on cash passing through banks and remittances through passing through banks and remittances through money transfer operators (MTOs)money transfer operators (MTOs)
2.2. NSO Survey on Overseas Filipinos (SOF) for NSO Survey on Overseas Filipinos (SOF) for estimates of cash passing through other channels estimates of cash passing through other channels and for remittances-in-kindand for remittances-in-kind
Concepts/Compilation MethodologyConcepts/Compilation Methodology
13
Bangko Sentral ng Pilipinas
Modes of OFW RemittancesModes of OFW Remittances
Mode % to Total
1995 2004Average
1995-2004
Cash 87.4 95.2 92.0
Banks 67.1 77.2 69.0
Informal
Channels20.3 18.0 23.0
Non-Cash ( In-kind) 12.6 4.8 8.0
Total 100.0 100.0 100.0
Remittance ChannelsRemittance Channels
Source: Survey on Overseas Filipinos (SOF), NSO
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Bangko Sentral ng Pilipinas
Concept of residenceConcept of residence
Seabased workers - residentsSeabased workers - residents
Landbased workersLandbased workers
o Entertainers normally with a 6-month Entertainers normally with a 6-month employment contract – residentsemployment contract – residents
o All others generally having a 2-year All others generally having a 2-year employment contract – non-residentsemployment contract – non-residents
Estimation Methodologies:Estimation Methodologies: CURRENT CURRENT
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Bangko Sentral ng Pilipinas
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]
Estimation Methodologies: CURRENTEstimation Methodologies: CURRENT
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Bangko Sentral ng Pilipinas
Stock of Stock of OFWsOFWs
Based on benchmark numbers per Based on benchmark numbers per category established by the Task Forcecategory established by the Task Force
Monthly updating based on a moving Monthly updating based on a moving total:total:
Stock Stock t=1t=1 = Stock = Stock t=0t=0 + number of deployed + number of deployed t=1 t=1 – –
number of workers with finished contractnumber of workers with finished contract
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Bangko Sentral ng Pilipinas
Workers’ remittancesWorkers’ remittances
Residual of total remittances in Residual of total remittances in cash cash 1/ and in kind 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)
Estimation Methodologies: CURRENTEstimation Methodologies: CURRENT
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Bangko Sentral ng Pilipinas
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)
Estimation Methodologies: CURRENTEstimation Methodologies: CURRENT
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Bangko Sentral ng Pilipinas
Need to harmonize definition of residence with population Need to harmonize definition of residence with population statistics / national income account /employmentstatistics / national income account /employment
Past system of monitoring headcount of migrant workers Past system of monitoring headcount of migrant workers has limitations:has limitations:o Difficulty of monitoring those with no valid work documents i.e.., Difficulty of monitoring those with no valid work documents i.e..,
those counted as tourists upon departurethose counted as tourists upon departure
o Upward bias in headcount due to: mobility of workers in landlock Upward bias in headcount due to: mobility of workers in landlock countries; returning workers with unexpired work contract and countries; returning workers with unexpired work contract and those frequently on vacation are not netted out in the stock those frequently on vacation are not netted out in the stock estimates estimates
Need to improve design of Survey of Filipinos OverseasNeed to improve design of Survey of Filipinos Overseas
Need to improve remittance estimates by source country Need to improve remittance estimates by source country
Statistical IssuesStatistical Issues
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Bangko Sentral ng Pilipinas
Initiatives to improve Monitoring of RemittancesInitiatives to improve Monitoring of Remittances
Estimate potential income of OFWs by:Estimate potential income of OFWs by:
1.1. Establishing a benchmark estimate of stock of OFWsEstablishing a benchmark estimate of stock of OFWs
2.2. Gathering data on average salary per worker by skill Gathering data on average salary per worker by skill category and by countrycategory and by country
3.3. Review survey design of the SOFReview survey design of the SOF
Concepts/Compilation MethodologyConcepts/Compilation Methodology
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Bangko Sentral ng Pilipinas
Web:Web: www.bsp.gov.phwww.bsp.gov.ph
E-mail:E-mail: [email protected]@bsp.gov.ph
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Bangko Sentral ng Pilipinas
• The SOF is a nationwide survey that The SOF is a nationwide survey that seeks to gather information on seeks to gather information on Filipino citizens who left for abroad Filipino citizens who left for abroad during the last five years. during the last five years.
• It is a rider survey to the October It is a rider survey to the October round of the Labor Force Survey round of the Labor Force Survey (LFS)(LFS)
Survey on Overseas FilipinosSurvey on Overseas Filipinos
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Bangko Sentral ng Pilipinas
ObjectivesObjectives
• To provide data on overseas Filipinos (OFs) To provide data on overseas Filipinos (OFs) particularly the overseas contract workers particularly the overseas contract workers (OFWs) and their contribution to the economy(OFWs) and their contribution to the economy
• To obtain national estimates on the number of To obtain national estimates on the number of OFs including overseas workers and their OFs including overseas workers and their socio-economic characteristicssocio-economic characteristics
• To provide estimates on the amount of cash To provide estimates on the amount of cash and in kind transfers received by the families and in kind transfers received by the families and mode of remittancesand mode of remittances
Survey on Overseas FilipinosSurvey on Overseas Filipinos
25
Bangko Sentral ng Pilipinas
• The SOF is an annual survey and is a rider The SOF is an annual survey and is a rider to the Qtr4 Labor Force Survey (LFS)to the Qtr4 Labor Force Survey (LFS)
• The sample households of the SOF are the The sample households of the SOF are the same as that of the LFS same as that of the LFS
• Only the sample households that responded Only the sample households that responded “YES” to the question, “Is there a family who “YES” to the question, “Is there a family who left abroad at anytime during the last five-left abroad at anytime during the last five-year period” year period”
Survey on Overseas FilipinosSurvey on Overseas Filipinos
26
Bangko Sentral ng Pilipinas
The SOF contains:The SOF contains:
•Socio-economic characteristics (i.e., sex, Socio-economic characteristics (i.e., sex, age, marital status, highest educational age, marital status, highest educational attainment, and occupation)attainment, and occupation)
•Place of work abroadPlace of work abroad
•Remittances (Cash and in-kind)Remittances (Cash and in-kind)
•Mode of remittances (i.e., banks, friends/co-Mode of remittances (i.e., banks, friends/co-workers, others) workers, others)
Survey on Overseas FilipinosSurvey on Overseas Filipinos
27
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?Who are Overseas Filipinos?
Filipinos whose departure occurred within the Filipinos whose departure occurred within the given five-year period such as:given five-year period such as:
1)1) Filipino overseas contract workers (OFW) who Filipino overseas contract workers (OFW) who are presently and temporarily out of the are presently and temporarily out of the country to fulfill an overseas contract for a country to fulfill an overseas contract for a specific length of time or who are presently at specific length of time or who are presently at home on vacation but still has an existing home on vacation but still has an existing contract to work abroad.contract to work abroad.
Survey on Overseas FilipinosSurvey on Overseas Filipinos
28
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?Who are Overseas Filipinos?
OFWs may be classified as:OFWs may be classified as:
a)a) Land-based workers - hired directly by an Land-based workers - hired directly by an employer abroad, through the assistance of employer abroad, through the assistance of the POEA or through a private and licensed the POEA or through a private and licensed recruitment agency. recruitment agency.
b)b) Sea-based workers - work for a shipping Sea-based workers - work for a shipping company abroad or manning any kind of company abroad or manning any kind of international fishing/passenger/cargo vessels. international fishing/passenger/cargo vessels.
Survey on Overseas FilipinosSurvey on Overseas Filipinos
29
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?Who are Overseas Filipinos?
2)2) Other Filipino workers abroad with valid Other Filipino workers abroad with valid working visa or work permits working visa or work permits
3)3) Filipinos whose place of employment is Filipinos whose place of employment is outside the Philippines but whose employer is outside the Philippines but whose employer is the Philippine government.the Philippine government.
Survey on Overseas FilipinosSurvey on Overseas Filipinos
30
Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?Who are Overseas Filipinos?
4)4) Filipinos who are abroad on training, Filipinos who are abroad on training, scholarships or any other similar purpose, scholarships or any other similar purpose, even if they are known to be working abroad.even if they are known to be working abroad.
5)5) Filipinos working in other countries as Filipinos working in other countries as consultants/advisors of international consultants/advisors of international organizations.organizations.
Survey on Overseas FilipinosSurvey on Overseas Filipinos
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Bangko Sentral ng Pilipinas
Who are Overseas Filipinos?Who are Overseas Filipinos?
6)6) Filipino immigrants and residents in other Filipino immigrants and residents in other countries.countries.
7)7) Filipinos abroad who are holders of other Filipinos abroad who are holders of other types of non-immigrant visa such as types of non-immigrant visa such as tourist/visitor, student, medical and others.tourist/visitor, student, medical and others.
Survey on Overseas FilipinosSurvey on Overseas Filipinos
32
Bangko Sentral ng Pilipinas
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)
Estimation Methodologies: CURRENTEstimation Methodologies: CURRENT
33
Bangko Sentral ng Pilipinas
OFW-related Travel Export
Travel Export
= Number of OFWs on visit 1/ x ave. per capita expenditure 2/
1/ Source: POEA, OFW Deployment (Rehires)
2/ Source: National Accounts, Personal Consumption Expenditure (current prices)
Estimation Methodologies: CURRENTEstimation Methodologies: CURRENT