REDUCING THE COST OF REMITTANCES/CHANNELING REMITTANCES FOR DEVELOPMENT Presentation of Secretary...
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Transcript of REDUCING THE COST OF REMITTANCES/CHANNELING REMITTANCES FOR DEVELOPMENT Presentation of Secretary...
REDUCING THE COST OF REDUCING THE COST OF REMITTANCES/CHANNELING REMITTANCES/CHANNELING
REMITTANCES FOR DEVELOPMENTREMITTANCES FOR DEVELOPMENT
Presentation of Secretary Imelda Nicolas, Chairperson
Commission on Filipinos Overseas
2nd ADBI-OECD Roundtable DiscussionJanuary 18 - 20, Tokyo, Japan
CFO 2010 Stock EstimatesCFO 2010 Stock Estimates
Top Remittance-Receiving Top Remittance-Receiving Countries, 2011 Estimates Countries, 2011 Estimates
(in billion US$)(in billion US$)
58.0 57.0
24.0 23.0
12.0 12.0 11.0 9.0 8.0 8.0
India China Mexico Philippines Pakistan Bangladesh Nigeria Vietnam Egypt Lebanon
Source: Migration and Development Brief, World Bank
33
Top Remittance-Receiving CountriesTop Remittance-Receiving Countries(in percent of GDP, 2010)
Source: Migration and Development Brief, World Bank
31.0 28.6 24.8 23.2 20.8 20.0 19.7 19.6 17.5 15.7 15.2 15.1 13.0 12.9 12.8 12.2 11.7 11.7 11.2 10.9 10.7 10.4 10.2
0102030405060
44
Volume of RemittancesVolume of Remittances
2005: US$ 10.0 B2006: US$ 13.0 B2007: US$ 14.4 B2008: US$ 15.9 B2009: US$ 17.4 B2010: US$ 18.8 B
Remittances have been resilient, providing Remittances have been resilient, providing cushion against external shockscushion against external shocks
Remittances up by 8.2% in 2010; 7.0% in the first ten months of 2011
Sustained remittances’ growth due to: Diversity of OFs’ skills and expertise New and expanded markets Expansion of bank and non-bank
services
Remittances have other benefits• Underpin private consumption• Raise savings• Increase investment in human
capital• Broaden middle-class segment
-30
-20
-10
0
10
20
30
40
0
5
10
15
20
25
80 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 J an-Oct 10
J an-Oct 11
Remittances (RHS)
Growth Rate (LHS)
Overseas Filipinos’ Remittances1980 – October 2011 (in billion US$)
Number of Banks’ Branches, Correspondent Banks, Number of Banks’ Branches, Correspondent Banks, Remittance Centers, and Tie-Ups with OF Remittance Remittance Centers, and Tie-Ups with OF Remittance 11
77
1 Data were based on reports of 8 commercial banks engaged in FX remittance transactions
Remittances by host country Remittances by host country (based on bank reports)(based on bank reports)
2000 2010
88
Average cost of remittanceAverage cost of remittance
Source: Bangko Sentral ng Pilipinas
Survey of Remittance ChargesSurvey of Remittance Charges
1111
* Partial Report as of June 2011
Survey of Remittance ChargesSurvey of Remittance Charges
1212
* Partial Report as of June 2011
PESO REMITTANCEPESO REMITTANCE
CONSUMPTIONCONSUMPTION SAVINGSSAVINGS SMEs/MICROFINANCESMEs/MICROFINANCE
Bank instruments (TD/SD/Bank instruments (TD/SD/Mutual funds/UITF)Mutual funds/UITF)
P5,000 up P5,000 up
Savings in CooperativesSavings in CooperativesTD/SDTD/SD
P5,000 upP5,000 up
Treasury instrumentsTreasury instrumentsT-bills, T-notesT-bills, T-notesP100,000 upP100,000 up
Stock MarketStock Market
Insurance (life, non-life,Insurance (life, non-life,Education, pension)Education, pension) Real EstateReal Estate
OthersOthers
Agri-businessAgri-business
Retail businessRetail business
Lending businessLending business
OthersOthers
1313
Overseas Filipinos’ Remittances for Development (OF/RED) Project: “Building a Future Back Home”
A collaborative project between CFO-NEDA-UNDP-WESTERN UNION FOUNDATION
Key Success Factors of Key Success Factors of OF-RED Project OF-RED Project
• Key Idea: collective remittances could become a powerful driver of development with emphasis on investing in economic opportunities
• Key challenge: leadership. Organizational capacity building is required involving all relevant stakeholders
• Enabling public policy environment to encourage investment and participation
• Instil ownership and buy-in of project(s) by migrants, their families and communities served
Project Strategy of OF-RED Project Strategy of OF-RED
• Develop mechanisms to engage OF/Diaspora communities as transnational actors of local development by:
1)Designing and developing a model to create forward and backward linkages for product
development, value chains and improved market access
2) Identifying capacity diagnostics/policy & institutional options for leveraging remittances for
development3) Marketing of idea to migrants and families left behind
Continuation: Project StrategyContinuation: Project Strategy
4) Support development of policies that tap the potential of OF remittances for savings, investments, job creation, entrepreneurship that will contribute to local economic development
5) Identify gaps that hinder and incentives that support collective remittances for development
Establishment of Remittance for Establishment of Remittance for Development Council (Redc)Development Council (Redc)
• A Multi-Stakeholders’ Advisory and Policy Recommending Body/ Consultative Forum to Channel Remittances for Development
Functions of ReDCFunctions of ReDC
1) serve as forum for issues affecting and effecting OF remittances
2) collaborate w/ other groups for collection of data to support ReDC’s informed policy recommendation capability
3) recommend & advocate for remittance-related policies e.g. further reduce remittance charges and fees
4) collaborate with other groups to provide financial education to OF and their families
Secretary Imelda Nicolas Chairperson
Commission on Filipinos OverseasCitigold Center, 1345 Quirino Highway corner South
Superhighway, Manila, PhilippinesTelephone No: (632) 552-4701
Fax No: (632) 561-8332Email: [email protected]
Website: www.cfo.gov.ph
Thank you!Thank you!