In 2017, a total of $28.1 billion in remittance was sent by overseas Filipino workers (OFWs) to their families in the Philippines. The figure is higher by 4.3% to the total remittance in 2016 which totaled $26.9 billion.
Contrary to what experts had expected, however, remittances have fallen to a whopping 15.3% during the entire January to June period, compared with the same period in the previous year. The difference is rather huge.
In layman’s terms, less remittance was sent by OFWs back to the Philippines. The ‘lost’ amount totaled to about $601.856 million, according to figures from the Bangko Sentral ng Pilipinas (BSP).
Though the trend is bound to change in the coming months, particularly as Christmas approaches, the significant drip in remittances is a matter of primary concern to the government. After all, remittances from these OFWs boost the country’s dollar reserves and helps the Philippines have a more stable economy.
Leyte Rep. Henry Ong expressed concern over this situation, especially observing that the market for OFWs in the Middle East has been on a steady decline in the past years. Saudization alone has led to the termination of thousands of non-Saudi workers, sending more people back to the Philippines.
“It is time for a major but gradual shift of our OFW policies. Those who want to stay in the Middle East can of course do so. OFWs from the Middle East will remit anywhere from $8 billion to $9 billion in the coming several years—near-term to medium-term, but the growth rates or pace will be slower and slower,” Ong explained.
Due to the drop of oil prices as well as Saudization, Ong said we could no longer expect to see a major rise in remittances from Saudi and other parts of the Middle East.
“The world community will not let crude oil prices skyrocket to above $100 again because of the adverse impact on the global economy. The numbers are clear. Remittances from the Middle East are still rising, but very slowly now at single digit pace and that is the proof of the approach to saturation,” he added.
But how is this problem solved?
“To prepare for slowdown of remittances from the Middle East as early as now the Philippines should start more new deployment to other countries where OFWs are welcome, needed, respected, and cared for. We should have bilateral labor agreements with them. They should be signatories to and have ratified international conventions on migrant workers,” Ong suggested.
The solution is easier said than done, of course, but Ong remains hopeful that the government will look into this issue before it becomes too late.