The Philippines was the fourth biggest recipient of remittances from migrant workers in 2018 and the World Bank expects a boost to these cash transfers from the plan to deploy more overseas Filipino workers (OFWs) to Japan.
The Washington-based World Bank’s April 2019 Migration and Development Brief showed that the $33.8 billion (RM 139.5 billion) in remittance flows to the Philippines were only behind India’s $78.6 billion, China’s $67.4 billion and Mexico’s $35.7 billion.
However, the Philippines’ ranking in terms of volume of remittances declined by a notch from third place in 2017.
Also, the 3.1-percent growth in remittances last year slowed from 2017’s 5.4 percent.
“Growth was lower due to the significant drop of 15 percent in private transfers from the Middle East in 2018,” the World Bank explained.
The World Bank nonetheless said remittance fees to the Philippines remained among the lowest in the East Asia and Pacific region as costs to send money back home from Singapore, the United Arab Emirates, Kuwait, Spain and Malaysia were the lowest cost corridors during the fourth quarter of last year.
Moving forward, the World Bank sees Japan’s new policy to hire 345,000 foreign workers during the next five years, starting April 11, boosting remittance flows to the Philippines and eight other priority countries.
The countries prioritized by Japan to supply foreign labourers also include Cambodia, China, Indonesia, Mongolia, Myanmar, Nepal, Thailand and Vietnam.
Migrant workers from these nine countries will be deployed to 14 sectors in Japan that have “severe labour shortages,” the World Bank noted.
“Both Nepal and the Philippines signed a memorandum of cooperation with Japan on March 25, 2019. The Philippines is seeking to capitalize on the new demand, particularly for skilled workers, and anticipates filling nearly 100,000 of the possible positions,” it said.
Remittances were the country’s biggest source of foreign exchange income, insulating the domestic economy from external shocks by ensuring steady supply of dollars into the system.
These cash transfers were also a major driver for consumption, hence contributing to robust economic growth.
An estimated 10 million Filipinos, or a tenth of the country’s population, work abroad.