Less money leaving the CNMI

More money is staying in the CNMI as the level of remittance—the sending of money to places outside of the local economy—continues to drop, a trend some local officials say might be linked to a decline in the size of the foreign workforce or in the number of jobs open to foreign workers.

According to the second quarter economic report issued by the Department of Commerce Friday, a trend of decreasing remittance has emerged in the CNMI. Beginning in the second quarter of 2007, the level of remittance has gone down each quarter by millions, save for a slight jump in the last remaining months of 2007—in which remittance figures still fell 12 percent shy of the same quarter during the previous year.

The second quarter of 2008 saw a 5.4 percent decline in remittance below the total seen in the first months of the year, a drop of more than $1 million, marking a 10.3 percent decline when compared to the same period last year.

An estimated $19.7 million left the Commonwealth in the second quarter of 2008, while about $20.8 million departed in the first.

Local government officials attribute much of the remittance that occurs in the CNMI to foreign workers, who often send money back to their home countries to support family or loved ones. Critics, however, have previously suggested that the practice of sending money outside the CNMI is a drain on the local economy.

In an interview Monday, Lillian Pangelinan, Banking Administrator for Commerce, said the decline in remittance could be linked to reductions in the number of foreign workers in the CNMI or to a decline in the number jobs available to them. Remittance, she added, is a natural part of an economy with a high number of foreign workers.

“Although we would, of course, like to see that money stay in the CNMI, it’s to be expected that people will send money home to support their families,” she said.

Currently, there are 22,400 foreigners in the CNMI with some type of authorization to work, according to statistics provided by the local Department of Labor. However, the foreign workforce has diminished recently as more workers have found themselves unemployed and unable to find new jobs within the time period local laws require, thereby prompting them to return to their nations of origin, deputy labor chief Cinta Kaipat said in an interview.

“Recently, as people have not been able to locate jobs, those who failed to do so in the statutorily required period have not been extended,” Kaipat said. “People have been leaving because there not many jobs.”

Kaipat added that workers are often drawn to jobs in the CNMI because of the chance to send money home.

“Obviously, if that money doesn’t stay in the Commonwealth and doesn’t get circulated, we’re not benefiting from that and there seems to be a lot more that leaves the Commonwealth than is here, so that doesn’t really help out the economy,” she said. “Not that I blame the workers, many of them are here to work to support their families back home.”

Since the fourth quarter of 2007, the amount of money leaving the CNMI has fallen from an estimated $24.3 million to about $19.7 million.