OFW Remittances in the · PDF file• Increase disposable income ... • Remittances of...

Bangko Sentral ng Pilipinas

OFW RemittancesOFW Remittancesin thein the

PhilippinesPhilippines

The Government of the Republic of the Philippines

•• Ease foreign Ease foreign exchange liquidity exchange liquidity constraintsconstraints

•• Increase disposable Increase disposable incomeincome

•• Finance investments Finance investments in in SMEsSMEs

January-May

Importance of OFW RemittancesImportance of OFW Remittances


4.7

8.6

7.66.9

6.036.056.8

5.8

0

12

34

56

78

9

1999 2000 2001 2002 2003 2004 2004 J-Jul

2005 J-Jul

-15

-10-5

05

1015

2025

30OFW OFW remittances remittances remains to be remains to be a major a major source of source of foreign foreign exchangeexchange

US$ billionUS$ billion Growth Rate (%)Growth Rate (%)



138.6138.6

113.7113.7

118.4118.4

95.195.1

92.592.5

91.991.9

99.6 99.6

102.5102.5

DSBDSB

48874887

40234023

85508550

75787578

68866886

60316031

60506050

67946794

Total Cash Total Cash

Remittances Remittances

(US$M)(US$M)

10.710.7

10.010.0

9.99.9

9.69.6

9.09.0

8.58.5

8.08.0

8.98.9

GDPGDP

987.3987.3

2366.52366.5

1823.01823.0

2183.92183.9

384.3384.3

609.8609.8

449.8449.8

393.9393.9

FDIFDI

23.023.0

19.719.7

20.020.0

19.619.6

18.418.4

17.517.5

14.714.7

17.417.4

XGSXGS

52.752.720042004

24.924.92004 (Jan2004 (Jan--Jun)Jun)

2005 (Jan2005 (Jan--Jun)Jun)

20032003

20022002

20012001

20002000

19991999

RemittancesRemittancesas percent of:as percent of:

42.142.1

44.444.4

26.326.3

38.438.4

40.240.2

45.1 45.1

GIRGIR



BOP ClassificationBOP Classification

Prior to 2004:Prior to 2004:

1.1. Compensation Income Compensation Income –– covers cash remittances covers cash remittances of salaries/earnings of seaof salaries/earnings of sea--based and landbased and land--based based OFWsOFWs passing thru the banking system.passing thru the banking system.

2.2. Current Transfers Current Transfers –– covers gifts/donations covers gifts/donations received by resident beneficiaries from migrant received by resident beneficiaries from migrant Filipinos Filipinos

Concepts/Compilation MethodologyConcepts/Compilation Methodology



Starting 2004:Starting 2004:

OFW transactions are measured and classified using the OFW transactions are measured and classified using the oneone--year residency rule in accordance with the year residency rule in accordance with the IMFIMF’’s s BPM5.BPM5.

1.1. Resident Resident OFWs OFWs –– those who work abroad for less than those who work abroad for less than one year (e.g., performing artists and seaone year (e.g., performing artists and sea--based based workers with shortworkers with short--term working contracts)term working contracts)

2.2. NonNon--resident resident OFWs OFWs –– those who work abroad for a those who work abroad for a period of one year or more (e.g., other landperiod of one year or more (e.g., other land--based based workers with longworkers with long--term working contracts) term working contracts)




1.1. Income Account Income Account –– covers remittances of resident covers remittances of resident OFWsOFWs

2.2. Current Transfers Current Transfers –– covers remittances of noncovers remittances of non--resident resident OFWsOFWs..

•• Remittances of migrant Filipinos who permanently Remittances of migrant Filipinos who permanently reside abroad are classified as gifts/donations under reside abroad are classified as gifts/donations under current transferscurrent transfers



Measurement & Sources of DataMeasurement & Sources of Data

1.1. International Transactions Reporting System (ITRS) International Transactions Reporting System (ITRS) ––based on bank reports to BSP on cash passing through based on bank reports to BSP on cash passing through banks and remittances through money transfer banks and remittances through money transfer operators (operators (MTOsMTOs))

2.2. NSO Survey on Overseas Filipino (SOF) for estimates NSO Survey on Overseas Filipino (SOF) for estimates of cash passing through other channels and for of cash passing through other channels and for remittancesremittances--inin--kindkind



Measurement & Sources of DataMeasurement & Sources of Data

1.1. Cash Cash redmittancesredmittances through banksthrough banks

2.2. Raising factor to estimate other remittances i.e., not Raising factor to estimate other remittances i.e., not passing through the banking system and remittances passing through the banking system and remittances inin--kindkind



•• 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


ObjectivesObjectives•• To provide data on overseas Filipinos (To provide data on overseas Filipinos (OFsOFs) )

particularly the overseas contract workers particularly the overseas contract workers ((OFWsOFWs) and their contribution to the economy) and their contribution to the economy

•• To obtain national estimates on the number of To obtain national estimates on the number of OFsOFs including overseas workers and their including overseas workers and their sociosocio--economic characteristicseconomic characteristics

•• To provide estimates on the mount of cash and To provide estimates on the mount of cash and in kind transfers received by the families and in kind transfers received by the families and mode of remittancesmode of remittances



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 44,000 sample householdssample of about 44,000 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



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)



Sampling DesignSampling Design•• The SOF, as a rider to the LFS uses the The SOF, as a rider to the LFS uses the

sampling design of the 2003 Master Sample sampling design of the 2003 Master Sample (MS) for Household Surveys which started on (MS) for Household Surveys which started on May 2003.May 2003.

•• The sampling domain consists of the countryThe sampling domain consists of the country’’s s 17 administrative regions as defined in 17 administrative regions as defined in Executive Order (EO) 36 and 231.Executive Order (EO) 36 and 231.



Sampling DesignSampling Design•• The countryThe country’’s 17 Administration Regions are as s 17 Administration Regions are as

follows:follows:National Capital RegionNational Capital Region Region VII Region VII –– Central Central VisayasVisayasCordillera Administrative Region Region VIII Cordillera Administrative Region Region VIII –– Eastern Eastern VisayasVisayasRegion I Region I –– IlocosIlocos Region IX Region IX –– ZamboangaZamboangaRegion II Region II –– CagayanCagayan ValleyValley Region X Region X –– Northern MindanaoNorthern MindanaoRegion III Region III –– Central LuzonCentral Luzon Region XI Region XI –– DavaoDavaoRegion IVA Region IVA –– CALABARZONCALABARZON Region XII Region XII -- SOCCSARGENSOCCSARGENRegions IVB Regions IVB –– MIMAROPAMIMAROPA CaragaCaragaRegion V Region V –– BicolBicol Autonomous Region in Muslim Autonomous Region in Muslim

MindanaoMindanao



Forms UsedForms Used•• Two Forms are used in this survey, namely: (1) Two Forms are used in this survey, namely: (1)

SOF form 1, which gathers the socioSOF form 1, which gathers the socio--economic economic characteristics of characteristics of OFsOFs; and (2) SOF From 2, ; and (2) SOF From 2, which is a control formwhich is a control form

•• ISH Form 2 is a household control form that is ISH Form 2 is a household control form that is used as basis for determining which household used as basis for determining which household has members who are overseas.has 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 anytime during the period ctoberctober 1998 to 1998 to September 2003September 2003””



Who are Overseas Filipinos?Who are Overseas Filipinos?•• The survey covers the following overseas The survey covers the following overseas

Filipinos as long as their departure occurred Filipinos as long as their departure occurred within the given fivewithin the given five--year period:year period:

1. Filipino overseas contract workers (OFW) 1. Filipino overseas contract workers (OFW) who are presently and temporarily out of the who 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.



Who are Overseas Filipinos?Who are Overseas Filipinos?OFWsOFWs may be classified as:may be classified as:

a) Landa) Land--based workersbased workers

These are These are OFWsOFWs who are hired directly by who are hired directly by an employer abroad, through the assistance of an 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.

They may have returned to the Philippines They may have returned to the Philippines for a vacation, have transferred to other for a vacation, have transferred to other employees, or were rehired by their former employees, or were rehired by their former employer.employer.



Who are Overseas Filipinos?Who are Overseas Filipinos?OCWsOCWs may be classified as:may be classified as:

b) Seab) Sea--based workersbased workers

These are These are OFWsOFWs who worked or are who worked or are working in any kind of international working in any kind of international fishing/passenger/cargo vessels.fishing/passenger/cargo vessels.

Also included are Also included are OFWsOFWs who worked or who worked or are working for a shipping company abroad.are working for a shipping company abroad.



Who are Overseas Filipinos?Who are Overseas Filipinos?2. Other Filipino workers abroad with valid 2. Other Filipino workers abroad with valid working visa or work permits. Included also are working visa or work permits. Included also are crew members of airlines such as pilots, crew members of airlines such as pilots, stewards, stewardesses and others.stewards, stewardesses and others.

3. Filipinos whose place of employment is 3. 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.



Who are Overseas Filipinos?Who are Overseas Filipinos?4. Filipinos who are sent abroad by the 4. Filipinos who are sent abroad by the Philippine government or by private Philippine government or by private instructions for training, scholarships or any instructions for training, scholarships or any other similar purpose, even if they are known to other similar purpose, even if they are known to be working abroad.be working abroad.

5. Filipinos working in other countries who are 5. Filipinos working in other countries who are hired as consultants/advisors of international hired as consultants/advisors of international organizations such as the United nations, IMF organizations such as the United nations, IMF and others.and others.



Who are Overseas Filipinos?Who are Overseas Filipinos?6. Filipino immigrants and residents in other 6. Filipino immigrants and residents in other countries.countries.

7. Filipinos abroad who are holders of other 7. Filipinos abroad who are holders of other types of nontypes of non--immigrant visa such as immigrant visa such as tourist/visitor, student, medical and others.tourist/visitor, student, medical and others.



Who must be reported by the sample Who must be reported by the sample household?household?1. Overseas Filipinos who are related to the 1. Overseas Filipinos who are related to the head of the sample household, by head of the sample household, by consanguinity or affinity, and who, prior to their consanguinity or affinity, and who, prior to their departure and will be upon their return, were departure and will be upon their return, were regular members of the household.regular members of the 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.



Modes of OFW RemittancesModes of OFW Remittances

8.04.812.6Non-Cash ( In-kind)

92.095.287.4Cash

69.077.267.1Banks

% to TotalMode

100.0

18.0

2004Average

1995-20041995

100.0

20.3

100.0 Total

23.0Informal Channels

Remittance ChannelsRemittance Channels

Source: Survey on Overseas Filipinos (SOF), NSO


Web:Web: www.bsp.gov.phwww.bsp.gov.phEE--mail:mail: [email protected]@bsp.gov.ph


Initiatives to improve Monitoring of RemittancesInitiatives to improve Monitoring of Remittances

Estimate potential income of Estimate potential income of OFWsOFWs by:by:

1.1. Establishing a benchmark estimate of stock of Establishing a benchmark estimate of stock of OFWsOFWs

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


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