OFW money remains driver of growth in ’08

Sun.Star: The continued inflow of dollar remittances from overseas Filipino workers (OFWs) and growth in tourism, real estate development and the business process outsourcing (BPO) industry will continue to drive the Philippine economy next year.

Economist Antonio Agcaoili Jr., Asia United Bank senior vice president for treasury group, gave this assessment of the Philippine economy in an economic briefing conducted by the bank recently.

He also expects mining biofuels and government spending to boost the economy by 2008.

In his report, Agcaoili projected a 15-percent growth rate in OFW remittances in 2008 and 2009.

He said remittances from OFWs will sustain the growth of the economy. He noted that many migrant workers are now high-level professionals, composed mainly of seafarers and caregivers earning bigger salaries as compared to when most of OFWs worked as domestic helpers.

Seafarers, for instance, are now receiving an average monthly salary of $3,000 (about P120,000) to $4,000 (P160,000).

Agcaoili said given the “right economic and political conditions," remittances from the OFW market will reach $16.80 billion by 2008 and $19.32 billion by 2009.

He said OFW spending is mainly on consumer goods, such as appliances. A bulk of the remittances is invested in real estate, particularly in housing units, which spur more development in real estate development.

“One-third or around $4.2 billion of OFW remittances went to real estate in 2006," said Agcaoili.

Big ticket projects of developers like Ayala Land, Mega-world Corp., Robinsons Land, and SM Prime Holdings Inc. are indicative of a burgeoning real estate sector, he said.

The real estate industry has also benefited from the rapid entry of more BPO companies opting to relocate in the country, with the sector offering leasable office spaces.

“Office vacancy in Ortigas and Makati today is at four percent," Agcaoili said, adding that the figure is a far cry from the 50-percent office vacancy it experienced in 1997.

In the case of the country’s BPO industry, he said the sector is likely to grow 97 percent in the next three years.

Agcaoili said he expects BPO revenues to grow threefold to $12.1 billion in 2010 from $3.4 billion from the 2006 end level. - Sun.Star

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