Chunk of Pinoy cash from abroad still outside bank sphere in past five years

by JEREMAIAH M. OPINIANO

MANILA – NEARLY a fifth of cash being sent by Filipinos abroad for the past five years remained outside the sphere of banks and formal channels, data from the Bangko Sentral ng Pilipinas shows.
The country’s balance of payments data, which the BSP revised recently to comply with a new International Monetary Fund reporting standard, showed that overseas Filipinos sent some US$8.24 billion of cash remittances through informal channels from 2001 to 2005.
The amount is 17.18 percent of the five-year total US$47.975 billion cash remittances of overseas Filipinos, data from country’s central bank showed.
Under the revised BoP data, cash worth US$39.735 billion flowed through formal banking channels.
In terms of year-on-year share, money sent via informal channels appears to decline: from 21.89 percent of the total remittances in 2001, 19.99 percent in 2002, 16.65 percent in 2003, to 16.66 percent in 2004.
Informally-sent remittances further declined to 13.06 percent of the total US$12.3 billion the BSP recorded as money sent by overseas Filipinos to the country last year.
According to BSP director Iluminada Sicat, this chunk worth US$1.6 billion represents cash remittances through informal channels while the US$10.7 billion “represents hard currencies that drive exchange rates, as well as the domestic economy.”
The latter amount, explains the head of BSP’s Department of Economic Statistics, would near-accurately describes the real contribution of remittances to Philippine economy, which has been overtaken by its neighbors since the Asian financial crisis almost a decade ago.
“We have consistently told the public that the OFW [overseas Filipino workers] remittances we have reported are those that pass through the banks,’” Sicat told the OFW Journalism Consortium.
The BSP is just on its second year of using the “new series” to report remittances in measuring the BoP.
The country’s BoP, which measures the Philippines’s total trade with other countries, had a surplus of US$2.407 billion in 2005, a big improvement from a US$280 million deficit in 2004. As of February this year, the BoP position revealed a US$2.209 billion surplus.

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