Statistical Statistical Measurement ofMeasurement of

OOVERSEASVERSEAS

FFILIPINOILIPINO

WWORKERS’ORKERS’RemittancesRemittances::

Present Practices and Present Practices and Future DirectionFuture Direction

A Presentation to the A Presentation to the International Technical Meeting on International Technical Meeting on

Measuring Migrant Remittances Measuring Migrant Remittances

25 January 200525 January 2005

Bangko Sentral ng Pilipinas

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Benefits ofBenefits ofOverseas Filipino Workers Overseas Filipino Workers

(OFWs) Remittances(OFWs) Remittances

3

6.796.05 6.03

7.197.64

6.927.68

0

1

2

3

4

5

6

7

8

9

1999 2000 2001 2002 2003 2003 2004-15

-10

-5

0

5

10

15

20

25

30

OFW OFW remittances remittances have been a have been a major source major source of foreign of foreign exchangeexchange

US$ billionUS$ billion Growth Rate (%)Growth Rate (%)

January-November

OFWOFW RemittancesRemittances

4

Value of OFWValue of OFW REMITTANCESREMITTANCESRemittancesRemittancesas percent of:as percent of: GDPGDP DSBDSB

19991999 7.487.48 102.54102.54

20002000 8.408.40 99.6499.64

20012001 10.0610.06 91.8891.88

20022002 10.1710.17 96.5696.56

20032003 10.4710.47 95.90 95.90

Average (1999 – 2003)Average (1999 – 2003) 9.329.32 97.3097.30

2003 (Jan-Sep)2003 (Jan-Sep) 9.949.94 100.43100.43

2004 (Jan-Sep)2004 (Jan-Sep) 10.0410.04 112.86112.86

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Profile ofProfile ofOverseas Filipino Workers (OFWs)Overseas Filipino Workers (OFWs)

                                                                        

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STOCKSTOCK of OFWsof OFWs

Stock of Stock of OFWs OFWs averaged 4.8 averaged 4.8 million over million over the last five the last five years. years.

4.8 4.8 4.7 4.8 4.9

0

2

4

6

1999 2000 2001 2002 2003

in millionin million

7

0

1

2

3

4

5

6

7

1999 2000 2001 2002 2003

total landbased seabased

About 95% of OFWs are land-based workers.

STOCKSTOCK of OFWsof OFWs

in millionin million

8

0

20

40

60

80

100

120

1999 2000 2001 2002 2003 2004 J-Jun

Professionals Service Production Others

Over the latest Over the latest five years OFWs five years OFWs deployed are deployed are higher-paid higher-paid service, service, professional and professional and production production workers.workers.

OFWOFW DEPLOYMENTDEPLOYMENT by Skillby Skillin thousandin thousand

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Asia and the Middle East account Asia and the Middle East account for the top destination of for the top destination of deployed land-based workers.deployed land-based workers.

0200400600800

10001200140016001800

1999 2000 2001 2002 2003

M. East Asia Americas Europe Others

Europe13%

Asia31%

Middle East32%

Americas21%

Others3%

in thousandin thousand

20032003

OFWOFW DEPLOYMENTDEPLOYMENT by Destinationby Destination

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Average Monthly Average Monthly SALARIES SALARIES of OFWs of OFWs (As of March 2003)(As of March 2003)

1,1131,113 ChoreographersChoreographers

1,1561,156 Composers/musicians/singersComposers/musicians/singers

1,6581,658 Medical technicians/X-ray techMedical technicians/X-ray tech

1,6241,624 EngineersEngineers

Service workers, of w/c:Service workers, of w/c:

2,5312,531 Computer programmersComputer programmers

4,6424,642 NursesNurses

Professionals, of w/c:Professionals, of w/c:

Caregivers and caretakersCaregivers and caretakers

Cooks and related workersCooks and related workers

Protective service workersProtective service workers

By SkillBy Skill

907907

1,0111,011

1,3861,386

Amount (in US$)Amount (in US$)

Domestic helpersDomestic helpers 486486

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Average Monthly Average Monthly SALARIESSALARIES of OFWsof OFWs(As of March 2003)(As of March 2003)

By SkillBy Skill Amount (in US$)Amount (in US$)

Production and Related workers/transport Production and Related workers/transport equipment equipment

Welders and flame-cuttersWelders and flame-cutters 1,1441,144

Production relatedProduction related 1,0951,095

Supervisor production and general foremanSupervisor production and general foreman 950950

Clerk and related workers, of w/c:Clerk and related workers, of w/c:

ClerksClerks 538538

Receptionist and travel agency clerksReceptionist and travel agency clerks 349349

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OFW OFW REMITTANCESREMITTANCES

ModeMode % to Total% to Total

CashCash 92.092.0

BanksBanks 69.069.0

Informal Channels Informal Channels 23.0 23.0

Non-Cash (In Kind)Non-Cash (In Kind) 8.08.0

Remittance ChannelsRemittance ChannelsBased on 1995-2002 Survey on Overseas FilipinosBased on 1995-2002 Survey on Overseas Filipinos

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Present Practices inPresent Practices inBOP Compilation BOP Compilation

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PresentPresent PRACTICESPRACTICESCharacteristics of estimation procedure:Characteristics of estimation procedure: Treatment of all contract workers as residentsTreatment of all contract workers as residents Income estimates based on amount of cash Income estimates based on amount of cash

remittances and are, therefore, net of expenses remittances and are, therefore, net of expenses abroad; remittances in kind not coveredabroad; remittances in kind not covered

No estimate of travel expenditures of contract workers No estimate of travel expenditures of contract workers in the BOPin the BOP

Includes only remittances coursed through the banking Includes only remittances coursed through the banking system; country attribution based on immediate source system; country attribution based on immediate source of fund transferof fund transfer

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Future DirectionFuture Direction

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INITIATIVESINITIATIVES

Creation of interagency Task Force Creation of interagency Task Force Objectives : Address data gaps and unify statistics Objectives : Address data gaps and unify statistics

on migrant workers, including harmonization of on migrant workers, including harmonization of estimation methodologies with the SNAestimation methodologies with the SNA

Outputs : (1) Established benchmark estimates of Outputs : (1) Established benchmark estimates of the number of overseas Filipinos, including contract the number of overseas Filipinos, including contract workers; and (2) Initiated collaborative effort to workers; and (2) Initiated collaborative effort to gather average salary per worker by skill category gather average salary per worker by skill category and by country and by country

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Estimation Methodologies:Estimation Methodologies: PROPOSEDPROPOSED

Concept of residenceConcept of residence Seabased workers - residentsSeabased workers - residents

Landbased workersLandbased workerso Entertainers normally with a 6-month Entertainers normally with a 6-month

employment contract – residentsemployment contract – residents

o All others generally having a 2-year All others generally having a 2-year employment contract – non-residentsemployment contract – non-residents

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Estimation Methodologies:Estimation Methodologies: PROPOSEDPROPOSED

Stock of OFWsStock of OFWs Based on benchmark numbers per Based on benchmark numbers per

category established by the Task Forcecategory established by the Task Force

Monthly updating based on a moving total:Monthly updating based on a moving total:

Stock Stock t=1t=1 = Stock = Stock t=0t=0 + number of deployed + number of deployed t=1 t=1 – –

number of workers with finished contractnumber of workers with finished contract

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Estimation Methodologies:Estimation Methodologies: PROPOSEDPROPOSED

Compensation of employees (CE)Compensation of employees (CE) Seabased workersSeabased workers CECESeabasedSeabased = Remittances = Remittances ÷ 0.80÷ 0.80 (Contract requires remittance to beneficiary of 80% of basic (Contract requires remittance to beneficiary of 80% of basic

salary.)salary.) EntertainersEntertainers CECEEntertainersEntertainers = [Stock of workers = [Stock of workerst=0t=0 x ave. salary per x ave. salary per

workerworkert=0t=0 ] + [no. of deployed ] + [no. of deployed t=1t=1 x ave. salary x ave. salary per worker per worker t=1t=1 ] – [no. of workers with finished ] – [no. of workers with finished contract x ave. salary per worker prevailing at contract x ave. salary per worker prevailing at time of their employment] time of their employment]

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Estimation Methodologies:Estimation Methodologies: PROPOSEDPROPOSED

Workers’ remittancesWorkers’ remittances Residual of total remittances in cash and in Residual of total remittances in cash and in

kindkind Treated as receipts Treated as receipts under Current Transfersunder Current Transfers

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Statistical Statistical ISSUESISSUES Need to harmonize definition of residence with Need to harmonize definition of residence with

population statisticspopulation statistics Present system of monitoring headcount of migrant Present system of monitoring headcount of migrant

workers has limitations:workers has limitations:o Difficulty of monitoring those with no valid work Difficulty of monitoring those with no valid work

documents/those counted as tourists upon departuredocuments/those counted as tourists upon departure

o Upward bias in headcount due to: mobility of workers in Upward bias in headcount due to: mobility of workers in landlock countries; returning workers with unexpired work landlock countries; returning workers with unexpired work contract not covered in estimation; and those frequently on contract not covered in estimation; and those frequently on vacationvacation

Need to improve design of Survey of Filipinos OverseasNeed to improve design of Survey of Filipinos Overseas

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Analytical Analytical IMPLICATIONIMPLICATIONNegative implication on external Negative implication on external vulnerabilityvulnerability Debt servicing capabilityDebt servicing capability Need for market orientation on the changes Need for market orientation on the changes

in statistical measurementin statistical measurement

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Web:Web: www.bsp.gov.phwww.bsp.gov.phE-mail:E-mail:bspmail@bsp.gov.phbspmail@bsp.gov.ph