Statistical Measurement of O VERSEAS F ILIPINO W ORKERS Remittances: Present Practices and Future Direction A Presentation to the International Technical Meeting on Measuring Migrant Remittances 25 January 2005 Bangko Sentral ng Pilipinas

2 Benefits of Overseas Filipino Workers (OFWs) Remittances

3 OFW remittances have been a major source of foreign exchange OFW remittances have been a major source of foreign exchange US$ billion Growth Rate (%) January-November OFW Remittances

4 Value of OFW REMITTANCES Remittances as percent of: GDPDSB Average (1999 – 2003) (Jan-Sep) (Jan-Sep)

5 Profile of Overseas Filipino Workers (OFWs)

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

7 About 95% of OFWs are land- based workers. STOCK of OFWs in million

8 Over the latest five years OFWs deployed are higher-paid service, professional and production workers. Over the latest five years OFWs deployed are higher-paid service, professional and production workers. OFW DEPLOYMENT by Skill in thousand

9 Asia and the Middle East account for the top destination of deployed land-based workers. Asia and the Middle East account for the top destination of deployed land-based workers. in thousand 2003 OFW DEPLOYMENT by Destination

10 Average Monthly SALARIES of OFWs (As of March 2003) 1,113 Choreographers Choreographers 1,156 Composers/musicians/singers Composers/musicians/singers 1,658 Medical technicians/X-ray tech Medical technicians/X-ray tech 1,624 Engineers Engineers Service workers, of w/c: 2,531 Computer programmers Computer programmers 4,642 Nurses Nurses Professionals, of w/c: Caregivers and caretakers Caregivers and caretakers Cooks and related workers Cooks and related workers Protective service workers Protective service workers By Skill ,011 1,386 Amount (in US$) Domestic helpers Domestic helpers

11 Average Monthly SALARIES of OFWs (As of March 2003) By Skill Amount (in US$) Production and Related workers/transport equipment Welders and flame-cutters Welders and flame-cutters1,144 Production related Production related1,095 Supervisor production and general foreman Supervisor production and general foreman Clerk and related workers, of w/c: Clerks Clerks Receptionist and travel agency clerks Receptionist and travel agency clerks

12 OFW REMITTANCES Mode % to Total Cash Cash92.0 Banks Banks69.0 Informal Channels Informal Channels23.0 Non-Cash (In Kind) Non-Cash (In Kind) Remittance Channels Based on Survey on Overseas Filipinos

13 Present Practices in BOP Compilation

14 Present PRACTICES Characteristics of estimation procedure: Treatment of all contract workers as residents Treatment of all contract workers as residents Income estimates based on amount of cash remittances and are, therefore, net of expenses abroad; remittances in kind not covered Income estimates based on amount of cash remittances and are, therefore, net of expenses abroad; remittances in kind not covered No estimate of travel expenditures of contract workers in the BOP No estimate of travel expenditures of contract workers in the BOP Includes only remittances coursed through the banking system; country attribution based on immediate source of fund transfer Includes only remittances coursed through the banking system; country attribution based on immediate source of fund transfer

15 Future Direction

16INITIATIVES Creation of interagency Task Force Objectives : Address data gaps and unify statistics on migrant workers, including harmonization of estimation methodologies with the SNA Objectives : Address data gaps and unify statistics on migrant workers, including harmonization of estimation methodologies with the SNA Outputs : (1) Established benchmark estimates of the number of overseas Filipinos, including contract workers; and (2) Initiated collaborative effort to gather average salary per worker by skill category and by country Outputs : (1) Established benchmark estimates of the number of overseas Filipinos, including contract workers; and (2) Initiated collaborative effort to gather average salary per worker by skill category and by country

17 Estimation Methodologies: PROPOSED Concept of residence Seabased workers - residents Seabased workers - residents Landbased workers Landbased workers o Entertainers normally with a 6-month employment contract – residents o All others generally having a 2-year employment contract – non-residents

18 Estimation Methodologies: PROPOSED Stock of OFWs Based on benchmark numbers per category established by the Task Force Based on benchmark numbers per category established by the Task Force Monthly updating based on a moving total: Monthly updating based on a moving total: Stock t=1 = Stock t=0 + number of deployed t=1 – Stock t=1 = Stock t=0 + number of deployed t=1 – number of workers with finished contract number of workers with finished contract

19 Estimation Methodologies: PROPOSED Compensation of employees (CE) Seabased workers Seabased workers CE Seabased = Remittances ÷ 0.80 CE Seabased = Remittances ÷ 0.80 (Contract requires remittance to beneficiary of 80% of basic salary.) (Contract requires remittance to beneficiary of 80% of basic salary.) Entertainers Entertainers CE Entertainers = [Stock of workers t=0 x ave. salary per CE Entertainers = [Stock of workers t=0 x ave. salary per worker t=0 ] + [no. of deployed t=1 x ave. salary worker t=0 ] + [no. of deployed t=1 x ave. salary per worker t=1 ] – [no. of workers with finished per worker t=1 ] – [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]

20 Estimation Methodologies: PROPOSED Workers remittances Residual of total remittances in cash and in kind Residual of total remittances in cash and in kind Treated as receipts Treated as receipts under Current Transfers under Current Transfers

21 Statistical ISSUES Need to harmonize definition of residence with population statistics Need to harmonize definition of residence with population statistics Present system of monitoring headcount of migrant workers has limitations: Present system of monitoring headcount of migrant workers has limitations: o Difficulty of monitoring those with no valid work documents/those counted as tourists upon departure o Upward bias in headcount due to: mobility of workers in landlock countries; returning workers with unexpired work contract not covered in estimation; and those frequently on vacation Need to improve design of Survey of Filipinos Overseas Need to improve design of Survey of Filipinos Overseas

22 Analytical IMPLICATION Negative implication on external vulnerability Debt servicing capability Debt servicing capability Need for market orientation on the changes in statistical measurement Need for market orientation on the changes in statistical measurement

23 Web: