Country Report Philippines April 2011

Economic performance: Remittances hold up, despite unrest in the Middle East

Remittances from Filipinos working overseas are an important source of economic growth for the country. In 2010 remittances totalled US$18.8bn, equivalent to 10% of GDP, boosting personal consumption. Remittances have also kept the current account in surplus despite the country's wide merchandise trade deficit. In January the value of remittances rose by 7.6% year on year, to US$1.5bn. However, around one-half of the country's overseas workers are based in the Middle East. In 2010 Filipinos working in that region repatriated US$3bn, representing 15.8% of total remittance receipts. The recent unrest besetting North Africa and the Middle East would seem to threaten Philippine employment in the region, and consequently result in a fall in remittances-both of which could undermine household income in the Philippines. However, at present there is no sign of a sharp fall in remittances. Towards the end of March around 14,000 registered overseas Filipino workers had left Libya, which is now the target of airstrikes by a Western-led alliance, with around 2,000 Filipinos still in the country, mainly employed in medical services. Of those who had departed, more than 8,000 are returning to the Philippines, while the rest are mostly relocating to other parts of the Middle East. Those who have left Libya are expected to find employment readily elsewhere. The Philippine Overseas Employment Administration, the government body that promotes and monitors overseas employment, is reported to have more than 200,000 unfilled job orders on its books. The number of displaced workers would only become problematic if turmoil spread to the region's two major destinations for overseas Filipino workers, Saudi Arabia and the UAE. They accounted for 8.2% and 4.1%, respectively, of remittance receipts in 2010.

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