First Meeting of the Luxembourg Group - Philippines ... · PDF fileStatistical Measurement of...

Remittances Statistics: First Meeting of the Luxembourg Group

June 2006

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Bangko Sentral ng Pilipinas

Statistical Measurement ofStatistical Measurement of

OOVERSEASVERSEAS

FFILIPINOILIPINO

WWORKERSORKERS’’RemittancesRemittances::

Present Practices and Present Practices and Future DirectionFuture Direction

A Presentation to the A Presentation to the 11stst Luxembourg Meeting on RemittancesLuxembourg Meeting on Remittances

26 26 –– 27 June 200627 June 2006


Benefits of OFW RemittancesBenefits of OFW Remittances


Levels (US$M) */Levels (US$M) */Growth Rates Growth Rates

(%)(%)Q1Q1

20052005

01

323359

121476

284

2051

404

2455

-97.732.215.011.527.931.527.7

27.3

13.9

25.0

20052005

0139.4

16.77.9

34.117.1

7.0

15.3

11.1

14.6

02

377388

151728

304

2365

449

2814

20062006

443

1,2321,286

435,024

918

7,085

1,465

8,550

20042004 Q1Q120062006

5Africa

1,434Europe1,417Mid East

By Country:9,020

Land-based

1,669Sea-based

By Worker:

1,172Asia

55Oceania6,605Americas

1Others

10,689OFW Remittances

20052005

Cash remittances coursed through banks rose by 25.0 percent in 2005Robust inflows arising from the better capture of remittances and demand for OFWsFirst quarter of 2006 showed growth of 14.6% to US$2.8 billion

*/ Cash Remittances coursed through banks

OFW Remittances (in US$ M)

1000

3000

5000

7000

9000

11000

2002 2003 2004 2005 Q1 2005

Q1 2006

0

5

10

15

20

25

30Growth Rate

Source: BSP


Value of OFW RemittancesValue of OFW Remittances

145.4(J-Mar)

17.8(J-Apr)

654.4(J-Mar)

23.3(J-Mar)

9.8(J-Mar)

10.83.7(J-Apr)

2006

142.257.8944.323.910.025.010.72005

12.8

10.1

14.2

-1.6

Growth Growth RateRate(%)(%)

8.6

7.6

6.9

6.0

LevelLevel(in US$ (in US$ BilBil) ) 1/1/

Remittances as % of:Remittances as % of:

118.551.71242.720.09.22004

95.344.41543.419.68.92003

88.742.1446.618.28.42002

92.438.43092.817.57.92001

DSBDSBGIRGIRFDIFDIXGSXGSGNPGNP

1/ Cash remittances coursed through the banking system


Profile of Profile of OFWsOFWs


Stock of Stock of OFWsOFWsin millionin million

4.7 4.8 4.9 4.94.5

0

2

4

6

2001 2002 2003 2004 2005

Source: Commission on Filipinos Overseas, DFA Source: Commission on Filipinos Overseas, DFA


0

1

2

3

4

5

6

1999 2000 2001 2002 2003 2004 2005

total landbased seabased

Stock of Stock of OFWsOFWsIn millionIn million



OFW Deployment by SkillOFW Deployment by Skillin thousandin thousand

0

20

40

60

80

100

120

140

160

1995 2005

Professionals Service Production Others

Source: Philippine Overseas Employment Administration (POEA)Source: Philippine Overseas Employment Administration (POEA)


OFWOFW Deployment by DestinationDeployment by Destination

Europe7%

Asia35%

Middle East54%

Americas1%

Others3%

050

100150200

250300350

400450

2000 2001 2002 2003 2004 2005

M. East Asia Europe Americas Others 20052005

Asia and the Middle East account for the top destination of Asia and the Middle East account for the top destination of deployed landdeployed land--based workers.based workers.

in thousandin thousand



Remittance ChannelsRemittance Channels

5.0In Kind

95.0In Cash% to TotalMode

20.0

80.0

Thru informal channels

Thru formal channels

Of cash:

Based on Selected Results of the 2004 Survey of Overseas FilipinBased on Selected Results of the 2004 Survey of Overseas Filipinososof the National Statistics Officeof the National Statistics Office


Formal ChannelsFormal Channels

Banks

Local agency

Money transfer operators

Door-to-door remittance services tied-up with banks

Bangko Sentral ng PilipinasInformal ChannelsInformal Channels

Hand carry sent through friends and relatives

Money brought home by the migrant worker


Current PracticesCurrent Practices


Concept of residenceConcept of residence

SeabasedSeabased workers: workers: residentsresidents

LandbasedLandbased workersworkersoo Performing artists normally with a 6Performing artists normally with a 6--month month

employment contract: employment contract: residentsresidents

oo All others generally having a 2All others generally having a 2--year year employment contract: employment contract: nonnon--residentsresidents

Estimation Methodologies:Estimation Methodologies:


Stock of Stock of OFWsOFWs

Based on benchmark numbers per category Based on benchmark numbers per category established by the Task Force on OFW and established by the Task Force on OFW and Travel StatisticsTravel Statistics

Monthly updating based on a moving total:Monthly updating based on a moving 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


Compensation of employees (CE)Compensation of employees (CE)

(Income Account)(Income Account)SeabasedSeabased workersworkersCE CE SeaSea--basedbased = Remittances = Remittances ÷÷ 0.800.80

(Contract requires remittance to beneficiary of 80% of basic sal(Contract requires remittance to beneficiary of 80% of basic salary)ary)

Performing ArtistsPerforming ArtistsCE CE Performing ArtistsPerforming Artists ==

[Stock of workers [Stock of workers t=0t=0 x average salary per worker x average salary per worker t=0t=0 ] ] + + [no. of deployed [no. of deployed t=1t=1 x average salary per worker x average salary per worker t=1t=1 ] ] ––[no. of workers with finished contract x average salary [no. of workers with finished contract x average salary per worker prevailing at time of their employment]per worker prevailing at time of their employment]


WorkersWorkers’’ remittancesremittances

(Current Transfers)(Current Transfers)

Residual of total remittances in cash and in Residual of total remittances in cash and in kind after deducting implied remittances of kind after deducting implied remittances of resident resident OFWsOFWs


Summary Methodology of Total RemittancesSummary Methodology of Total Remittances

•• Resident Resident OFWsOFWs

RR1 1 (performing artists) = CE (performing artists) = CE –– Travel expendituresTravel expenditures

RR22 (sea based) = Cash remittances thru banks(sea based) = Cash remittances thru banksx x undercoverageundercoverage ratioratio+ remittances in kind+ remittances in kind


Summary Summary MethodologyMethodology of Total Remittancesof Total Remittances

•• NonNon--Resident Resident OFWsOFWs

NRNR = (total cash remittances thru banks)= (total cash remittances thru banks)x x undercoverageundercoverage ratioratio-- remittances of resident remittances of resident OFWsOFWs (R1 + R2)(R1 + R2)+ remittances in kind+ remittances in kind


Sources of DataSources of Data

Salary per worker: Salary per worker: POEAPOEA

Deployment of workers: Deployment of workers: POEAPOEA

Stock estimatesStock estimates: Commission on Filipinos Overseas: Commission on Filipinos Overseas

Travel expenditures: Travel expenditures: FIES of host countries FIES of host countries

Cash remittances: Cash remittances: Bank reportsBank reports

Undercoverage ratio: Undercoverage ratio: Survey of Overseas FilipinosSurvey of Overseas Filipinos

Remittances in kind: Remittances in kind: Survey of Overseas Filipinos Survey of Overseas Filipinos


Survey Of Overseas Filipinos (SOF)Survey Of Overseas Filipinos (SOF)

The SOF is a nationwide survey that The SOF is a nationwide survey that seeks to gather information on Filipino seeks to gather information on Filipino citizens who left for abroad during the citizens who left for abroad during the last five years.last five years.

A rider survey in the 3A rider survey in the 3rdrd quarter round quarter round of the Labor Force Surveyof the Labor Force Survey


Survey of Overseas FilipinosSurvey of Overseas Filipinos

A twoA two--page questionnaire containingpage questionnaire containing

SocioSocio--economic characteristics (i.e., sex, age, economic characteristics (i.e., sex, age, marital status, highest educational attainment, marital status, highest educational attainment, and occupation)and occupation)

Place of work abroadPlace of work abroad

Remittances (cash and inRemittances (cash and in--kind)kind)

Mode of remittances (i.e., banks, friends/coMode of remittances (i.e., banks, friends/co--workers, others) workers, others)


Forms UsedForms Used

Two Forms are used in this survey, namely: Two Forms are used in this survey, namely:

(1) SOF Form 1, which gathers the socio(1) SOF Form 1, which gathers the socio--economic characteristics of economic characteristics of OFsOFs; and ; and

(2) SOF Form 2, which is a control form, used (2) SOF Form 2, which is a control form, used as basis for determining which household has as basis for determining which household has members who are overseas.members who are overseas.


Forms UsedForms Used

Only the sample households with members Only the sample households with members overseas shall be given SOF Form 1, that, is, overseas shall be given SOF Form 1, that, is, those households that responded those households that responded ““YESYES”” to the to the question, question, ““Is there a family who left abroad at Is there a family who left abroad at anytime during the period October 1998 to anytime during the period October 1998 to September 2003September 2003””


Scope of the SurveyScope of the Survey

The sample households of the SOF are the The sample households of the SOF are the same as that of the LFS with a probability same as that of the LFS with a probability sample of about 51,000 sample householdssample of about 51,000 sample households

Family who traveled outside of the Philippines Family who traveled outside of the Philippines within the fivewithin the five--year period for any reasons are year period for any reasons are includedincluded

Bangko Sentral ng PilipinasWho must be reported by the sample Who must be reported by the sample

household?household?

1.1. Overseas Filipinos who are related to the head Overseas Filipinos who are related to the head of the sample household, by consanguinity or of the sample household, by consanguinity or affinity, and who, prior to their departure and will affinity, and who, prior to their departure and will be upon their return, were regular members of the be upon their return, were regular members of the household.household.

2. Overseas Filipinos whose stay abroad is 2. Overseas Filipinos whose stay abroad is indefinite but who are related to the head of the indefinite but who are related to the head of the sample household, by consanguinity or affinity, sample household, by consanguinity or affinity, and have lived with the household prior to their and have lived with the household prior to their departure.departure.


Need to harmonize definition of residence Need to harmonize definition of residence with the SNAwith the SNA

Present system of monitoring headcount of Present system of monitoring headcount of migrant workers has limitations:migrant workers has limitations:oo Difficulty of monitoring those with no valid work Difficulty of monitoring those with no valid work

documents/those counted as tourists upon documents/those counted as tourists upon departuredeparture

oo Upward bias in headcount due to: mobility of Upward bias in headcount due to: mobility of workers in landlock countries; returning workers workers in landlock countries; returning workers with unexpired work contract not covered in with unexpired work contract not covered in estimation; and those frequently on vacationestimation; and those frequently on vacation

Statistical IssuesStatistical Issues


Difficulty in attributing the ultimate source of Difficulty in attributing the ultimate source of the remittance which should be the actual the remittance which should be the actual country of deploymentcountry of deployment

The SOF as a rider survey to the LFS will not The SOF as a rider survey to the LFS will not capture the required sample intended just for capture the required sample intended just for OFWsOFWs

SOF does not ask for total salary received by SOF does not ask for total salary received by the OFW, only the remitted partthe OFW, only the remitted part

Statistical IssuesStatistical Issues


Future DirectionFuture Direction

Strengthen current system of monitoring Strengthen current system of monitoring headcount of migrant workersheadcount of migrant workers

Expand collaborative effort with the POEA to Expand collaborative effort with the POEA to disaggregate OFW database, particularly on: disaggregate OFW database, particularly on:

monthly salary by skillmonthly salary by skill

data on deployment of redata on deployment of re--hireshires

Improve sampling design of SOFImprove sampling design of SOF


Web : www.bsp.Web : www.bsp.govgov.ph.phEE--mail: [email protected]: [email protected]

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