Tuesday, 12 May 2009

High-growth global activities source of optimism for the Philippines

Written by Jun Vallecera
Business Mirror
http://www.businessmirror.com.ph/home/economy/10132-high-growth-global-activities-source-of-optimism-for-rp.html

AUTHORITIES are looking to three different but high-growth places around the world not just for support but for continued optimism on the external sector, particularly on forecast remittances of millions of overseas Filipino workers (OFWs) seen dipping by as much as 30 percent this year.

According to the Bangko Sentral ng Pilipinas, sustained infrastructure buildup as well as expanded social services in Saudi Arabia, Japan and the US protectorate of Guam were seen to dampen the debilitating impact of the ongoing global economic downturn on forecast OFW remittances this year.

While the BSP has painted a zero or no-growth scenario for remittances this year, Deputy BSP Governor Diwa Guinigundo said in no way were these seen to contract in magnitude as deep as 30 percent, according to projections by the British-owned bank HSBC.

“Based on what we know today, there is basis for us to be less pessimistic than what these doomsayers and experts are saying about our OFW remittances this year,” Guinigundo told reporters.

HSBC, which handles the bulk of all remittances sent home each year by millions of OFWs, sees the volume contracting by 20 percent up to 30 percent from last year’s $14.45 billion.

The International Monetary Fund sees it contracting by at least 7.5 percent, and the World Bank by 4.5 percent.

According to Guinigundo, in places like Saudi Arabia where the deputy governor of the Saudi Arabian Monetary Authority personally bared plans for the buildup of local infrastructures, demand for Filipino workers was seen sustained this year.

In the old Saudi capital of Jeddah, for example, one project to refurbish the look of the city will cost $45 billion and involve 40 percent of all labor by Filipinos, he said.

“Filipino labor is still much preferred because we are known as fast workers and understand English instructions,” he said.

The American military decision to relocate its military base in Okinawa, Japan, further southeast to Guam, requires the recruitment of between 20,000 and 30,000 workers—most of them likely Filipinos, Guinigundo added.

This does not include the positive impact to be generated by thousands of Filipinos in the medical-care sector recruited under the Japan-Philippines Economic Partnership Agreement (Jpepa), according to Guinigundo.

That agreement, he said, requires the sending of Filipino hands totaling 2,000 to 3,000 this year alone.

He reiterated that the zero-growth scenario the BSP drew this year for OFW remittances was deliberately conservative.

But for reasons just cited, there really is ground to argue that OFW remittances this year should post positive growth instead, Guinigundo said.

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