Wednesday, 10 November 2010

WB sees $21.3-B remittances by year end

Business Mirror

WITH millions of overseas Filipino workers (OFWs) in various parts of the world and thousands being deployed abroad every day, the World Bank (WB) expects OFW remittances to reach $21.3 billion by the end of the year; and the country to be the fourth-largest recipient of remittances in 2010.

In the World Bank’s Migration and Remittances Factbook 2011, remittances in the Philippines are expected to increase by 7.8 percent in 2010, the highest increase expected by the WB among large remittance recipients in East Asia and the Pacific region.

The bank said remittance flows to China, the largest recipient in the region, are estimated to have grown by 4.7 percent to reach $51 billion in 2010. The Philippines is the second-largest remittance recipient in the region.

“The diversified destinations of Filipino [and Chinese] migrants contributed to steady growth in remittances in 2010 despite the crisis. Similarly, flows to Vietnam are estimated to have grown by 9 percent in 2010 to return to the precrisis level of $7.2 billion in 2010. With a recovery in global demand, remittance flows to the East Asia and Pacific region are expected to grow at 7.2 percent and 8.5 percent in 2011 and 2012, respectively, to reach $106 billion in 2012,” the report stated.

With this, the Philippines will retain its position as one of the largest remittance recipients in the world. Based on the global rankings, with this outlook, the Philippines will be the fourth-largest recipient, with India, China and Mexico ranked on top 3 with remittances worth $55 billion, $51 billion and $22.6 billion, respectively.

However, the report showed the Philippines is also included in the top 10 emigration countries in the world. The country ranked 9th in the top 10 emigration countries in the world with a stock of emigrants reaching 4.275 million or 4.6 percent of the population.

“Remittances are a vital source of financial support that directly increases the income of migrants’ families. Remittances lead to more investments in health, education and small business. With better tracking of migration and remittance trends, policymakers can make informed decisions to protect and leverage this massive capital inflow which is triple the size of official aid flows,” Hans Timmer, WB development prospects director, said in a statement.

Overall, the WB expects remittance flows to developing countries to increase by 6 percent to $325 billion in 2010. This marks a healthy recovery from a 5.5-percent decline registered in 2009. Remittance flows are expected to increase by 6.2 percent in 2011 and 8.1 percent in 2012, to reach $374 billion by 2012.

These projections are based on three major trends. These trends are a high level of unemployment in the migrant-receiving countries has prompted restrictions on new immigration; the application of mobile-phone technology for domestic remittances has failed to spread to cross-border remittances; and developing countries are becoming more aware of the potential for leveraging remittances and diaspora wealth for raising development finance.

“This outlook for remittance flows, however, is subject to the risks of a fragile global economic recovery, volatile currency and commodity price movements, and rising anti-immigration sentiment in many destination countries,” the report stated.

The top remittance-sending countries in 2009 were the United States, Saudi Arabia, Switzerland, Russia and Germany.

Worldwide, the top recipient countries in 2010 are India, China, Mexico, the Philippines and France. As a share of gross domestic product, however, remittances are more significant for smaller countries—more than 25 percent in some countries.

While high-income countries remain the main source of remittances, migration between developing countries is larger than that from developing countries to high-income countries belonging to the Organization for Economic Cooperation and Development.

Regionally, there is significant variation across developing regions, with larger-than-expected falls in remittances to Europe and Central Asia, Latin America and the Caribbean, the Middle East and North Africa, and Sub-Saharan Africa regions in 2009. Remittance flows to South Asia in 2009 grew more than expected, and those to East Asia and Pacific rose modestly.

According to the Factbook 2011, the top migrant destination country is the United States, followed by Russia, Germany, Saudi Arabia and Canada.

The top immigration countries relative to population are Qatar (87 percent), Monaco (72 percent), the United Arab Emirates (70 percent), Kuwait (69 percent) and Andorra (64 percent).

Mexico-United States is expected to be the largest migration corridor in the world this year, followed by Russia-Ukraine, Ukraine-Russia, and Bangladesh-India.

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