By Charissa Luci-Atienza
The vice chairman of the House committee on banks and financial intermediaries has cited the need for “a major, but gradual shift” of policies on the deployment of Overseas Filipino Workers (OFWs), following the 15.3-percent drop in cash remittance from the Middle East.
Leyte Rep. Henry Ong took note of the latest Bangko Sentral ng Pilipinas (BSP) figures on remittances released on August 15 showing that cash remittance from the Middle East dropped by 15.3 percent or $601.856 million in the whole January to June period this year.
“We expect the 2018 second half cash remittances to be stronger because of the money transfers surge seasonal to Christmas,” he said in a statement.
“However, the cash transfers decline is across the board from the Middle East where there are significant remittances,” he said.
He laments that from Saudi Arabia, cash remitted was down by 12.9 percent or $172.11 million. While, from Kuwait,cash wired back home to dependents here in the Philippines dropped by 15.8 percent or $65.79 million.
From Israel, cash sent home plunged by 58.9 percent from $71.682 million to $29.263 million, Ong further laments.
He expressed hope that President Duterte’s visit to Israel next month would make a difference, as “the OFW market in the Middle East is reaching saturation point.”
Ong observed that the market for OFWs in the Middle East has stopped growing and has started to decline.
“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 said.
He called on the Duterte government to forge labor accords with other countries.
“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 said.
He attributed the slowdown in the growth rates of cash remittances from the Middle East these past years to decreasing demand for OFWs in the Middle East.
“We will not see remittance growth rates from the Middle East above 20 percent again unless crude oil prices return to over $100 per barrel, which has become improbable now because the world community convinced the key OPEC countries that having high crude prices slows down economic growth worldwide,” Ong said.
“Based on the cash remittances data of the Bangko Sentral, it looks like the saturation point will be well below $9 billion annually and this saturation point will be reached within the next four to five years,” he said.
After that, Ong said remittances from the Middle East will either stay on that plateau or go downhill, but it will not climb another mountain anymore.
“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 said.