The government reported that remittances from overseas Filipino workers (OFWs) surged by 46 percent in August this year, bringing the total inflow to Dh17 billion ($5.5 billion) in the first eight months of the year.

    Central Bank Governor Rafael Buenaventura said the remittances provided the cushion against spiralling oil prices. "Without OFW remittances, we will be in big trouble."

    The January-August OFW remittance figure was 9.42 percent higher than the Dh16 billion ($5.1 billion) recorded in the same eight-month period in 2003, the Central Bank said.

    As a result, Central Bank officials said the remittance inflow would likely surpass the projected three percent growth for 2004, and expand by six per cent for the whole year.

    Buenaventura said remittances were also boosted by commercial banks that have been moving aggressively into the remittance business, thus weaning OFWs away from informal channels.

    According to Buenaventura, the bulk of remittances still came from the traditional sources like United Arab Emirates, Saudi Arabia, Hong Kong, Japan, Singapore, Italy, the United States and the United Kingdom.

    In the first semester alone, Buenaventura said OFW remittances accounted for 16 per cent of the country's current account receipts and 11 per cent of gross domestic product (GDP). "We really depend on these remittances," Buenaventura said. Despite the growing competition from other labour-exporting countries, the demand for Filipino workers is expected to continue because of their skills, easy trainability and high level of professionalism.

    The bank, however, is expecting a slowdown in dollar remittances as a side effect of the clampdown by international institutions on the global flow of terrorist funds.

    Over the last three months, the Central Bank has been reporting the initial impact of new and tighter bank regulations on OFW remittances, noting a decline in funds coming out of the Middle East.

The bank said that Middle East countries, particularly Saudi Arabia, have begun implementing Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations.

    Banks in Saudi Arabia now require complete documentation and examination prior to remittance by overseas workers," an official said.

    The bank said the ongoing crisis in the Middle East was also discouraging OFWs from getting out of their places of employment to go to remittance centres.

    At the same time, labour and employment secretary Patricia Santo Tomas reported the fund of the Overseas Workers Welfare Administration (OWWA) rose to almost Dh440 billion ($142 million) as of June 2004 derived from contributions of legitimate overseas Filipino workers.

    Santo Tomas said there was fourfold increase from Dh110 billion ($35 million) in OWWA fund since she assumed the labour portfolio in 2001.

    She said the key to the growth of the fund was the prudent measures imposed by the OWWA Board of Trustees, which she chairs.