Filipinos send more cash back

Remittances of Filipinos working in the UAE rose more than 12 per cent in the first ten months of the year, nearly double the global average.

Remittances of Filipinos working in the UAE rose more than 12 per cent in the first 10 months of the year, nearly double the global average.

Finance:

Industry Insights Exclusives you can bank on from The National's premium content. Learn More

An increase in the recruitment of Filipinos working in the country and weakening demand for foreign workers elsewhere have been cited as reasons for the gap.

Europe's sovereign debt crisis has eroded global growth, curbing demand for Filipino workers in Europe and North America, traditionally the largest markets for the country's workers.

Remittances from the UAE rose to US$718,628,000 (Dh2,639,491,000) in the first 10 months of the year compared with $639,802,000 in the same period last year, data released by the Philippine central bank showed.

Globally, $16.5 billion was sent home by Filipinos abroad during the 10 months, 7 per cent higher than the same period a year earlier. The UAE was the sixth-largest source of remittances for Filipinos, behind the US, Canada, Saudi Arabia, the UK and Japan.

About 10 million Filipinos are estimated to work in more than 120 countries. A significant proportion of those are based in the Middle East, where they are employed in many sectors including retail, hospitality and health care.

Demand for their services in the UAE and Saudi Arabia, the biggest Filipino employment markets regionally, has gradually risen as the economies have developed.

At the same time, demand has ebbed in the larger western markets. The bulk of the 645,775 new job orders in the first 10 months were from Saudi Arabia, the UAE, Qatar, Taiwan, Kuwait and Hong Kong, the central bank said.

Globally, remittances sent home by Philippine citizens abroad rose at a slower pace in October, rising 6.2 per cent from the same month last year to $1.78bn. Remittances grew 8.4 per cent in September.

Comparative data for the UAE was not supplied.

"Remittances will slow down mainly because of weaker growth and high unemployment rates in developed economies," Luz Lorenzo, an economist at ATR-Kim Eng Securities in Manila, was quoted by Bloomberg News as saying. "Even if you look for new markets, it won't be enough to offset weaker demand in advanced economies."

While a global recruitment slowdown has hurt demand for Filipinos globally, weakness of the Philippine peso against the US dollar has helped to bolster the value of remittances by existing workers.

The peso last week reached 44.323 per dollar, its weakest level in more than 10 months.

"The higher purchasing power of each dollar of remittances may increase the incentive to remit, to take advantage of the higher purchasing power in the home country," a World Bank report released this month said.

twitter: Follow our breaking business news and retweet to your followers. Follow us