Philippines could lose $1.5 billion in remittances from cash-strapped Gulf states

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Philippines Could Lose $1.5 Billion In Remittances From Cash-strapped Gulf StatesAround 80,000 to 100,000 jobs for Oversea Filipino Workers, or OFWs, among them 30,000 household service workers, could be lost due to the precarious financial situation of Saudi Arabia and other Middle East countries owing to lower crude oil prices and the political tensions in the region.

This would translate into as much as $1.5 billion worth of remittances lost due to a projected 10 to 15 per cent decrease in the deployment of OFWs, also as a result of Saudi Arabia progressing in the implementation of “Saudization” and more companies folding up due to the alleged failure of the Saudi government to pay their contracts, as well as a closer regulation for deploying domestic workers to Kuwait.

Saudi Arabia is the main destination for OFWs in the Middle East with close to one million working in the country. However, hiring of new workers to Saudi Arabia fell from 219,134 in 2016 to 163,238 in 2017.

From January to July last year, remittances from the Gulf dropped 15 per cent, statistics by the Philippine central bank show. Remittances of Filipino workers in Kuwait fell by 20.4 per cent in the period, in Bahrain 22.9 per cent, Oman 38.3 per cent and Saudi Arabia 10.4 per cent. Qatar recorded the lowest drop at 6.3 per cent due to continued worker demand for construction and infrastructure projects related to the football World Cup in 2022.

Emmanuel Geslani, a Manila-based consultant on labour and migration issues, said a respective administrative order issued by the Department of Labour and Employment to the Philippine Overseas Employment Administration for recruitment agencies would reduce the number of job orders for household service workers for the Middle East by ten per cent starting this quarter. This will have a severe impact as recruitment agencies deploy around 300,000 workers annually.

Latest data from the central bank showed that overall global OFW remittances rose just 2.9 per cent to $29.06 billion from January to November last year. This is significantly below the average remittances growth rate of five to seven per cent annually in the past years.

The central bank has now lowered the growth targets for both personal and cash remittances to three per cent instead of four per cent for 2018 and 2019 which will have a noticeable fiscal effect since the amount of money sent home by overseas Filipinos accounts for around ten per cent of the country’s gross domestic product.

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Around 80,000 to 100,000 jobs for Oversea Filipino Workers, or OFWs, among them 30,000 household service workers, could be lost due to the precarious financial situation of Saudi Arabia and other Middle East countries owing to lower crude oil prices and the political tensions in the region.

Reading Time: 2 minutes

Philippines Could Lose $1.5 Billion In Remittances From Cash-strapped Gulf StatesAround 80,000 to 100,000 jobs for Oversea Filipino Workers, or OFWs, among them 30,000 household service workers, could be lost due to the precarious financial situation of Saudi Arabia and other Middle East countries owing to lower crude oil prices and the political tensions in the region.

This would translate into as much as $1.5 billion worth of remittances lost due to a projected 10 to 15 per cent decrease in the deployment of OFWs, also as a result of Saudi Arabia progressing in the implementation of “Saudization” and more companies folding up due to the alleged failure of the Saudi government to pay their contracts, as well as a closer regulation for deploying domestic workers to Kuwait.

Saudi Arabia is the main destination for OFWs in the Middle East with close to one million working in the country. However, hiring of new workers to Saudi Arabia fell from 219,134 in 2016 to 163,238 in 2017.

From January to July last year, remittances from the Gulf dropped 15 per cent, statistics by the Philippine central bank show. Remittances of Filipino workers in Kuwait fell by 20.4 per cent in the period, in Bahrain 22.9 per cent, Oman 38.3 per cent and Saudi Arabia 10.4 per cent. Qatar recorded the lowest drop at 6.3 per cent due to continued worker demand for construction and infrastructure projects related to the football World Cup in 2022.

Emmanuel Geslani, a Manila-based consultant on labour and migration issues, said a respective administrative order issued by the Department of Labour and Employment to the Philippine Overseas Employment Administration for recruitment agencies would reduce the number of job orders for household service workers for the Middle East by ten per cent starting this quarter. This will have a severe impact as recruitment agencies deploy around 300,000 workers annually.

Latest data from the central bank showed that overall global OFW remittances rose just 2.9 per cent to $29.06 billion from January to November last year. This is significantly below the average remittances growth rate of five to seven per cent annually in the past years.

The central bank has now lowered the growth targets for both personal and cash remittances to three per cent instead of four per cent for 2018 and 2019 which will have a noticeable fiscal effect since the amount of money sent home by overseas Filipinos accounts for around ten per cent of the country’s gross domestic product.

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