Remittances post 13% growth in 1st half

The volume of remittance transactions made by over 40,000 nonresident workers in the Northern Marianas registered a significant growth in the first semester of 2000 compared with year ago figures.

Records obtained from the commerce department’s Banking Division disclosed a 13-percent increase in remittances during the period covering the first six months of the year at $33.962 million from last year’s $29.392 million.

Foreign workers from both the Philippines and the People’s Republic of China have both sent higher volume of their dollar earnings from the Northern Marianas to their families in their respective countries.

The celebration of the traditional lunar new year, which ushered in the entry of the Year of the Golden Dragon, pushed remittances by Chinese workers by 20 percent to $6.975 million during the January-June 2000 period from $5.564 million in 1999.

At the same time, the persistent fall of the Philippine peso against the U.S. dollar has resulted to a sharp increase in the volume of remittances by Filipino workers from the Northern Marianas during the second semester of the year.

In the first six months of the year, official government records revealed that CNMI-based Filipino workers sent more than $26.987 million to the Philippines, up by about 12 percent from the January-June 1999’s $23.828 million.

Financial analysts said the overwhelming growth in remittances by Filipino workers may be attributed to the ever increasing value of the U.S. greenback against the peso which is now being traded in Philippine market at about P46 per dollar.

This, even as Philippines officials said the currency crisis was not confined to the country as it was more of a global trend that affected even developed economies in Europe and the Pacific.

The strong dollar has pulled down not only the Philippine peso, but also other currencies such as the Thai Baht, the Indonesian Rupiah, the Swiss franc, the British pound and the Euro.

The Philippines government is confident, however, that the country would have a respite from the currency’s fluctuation during the second half of the year because of the Christmas season, when Filipino overseas workers traditionally send much of their pay to their families.

Last year alone, Filipino overseas workers remitted about $7 billion.

In fact, observers said the escalating value of the dollar against the peso has been unusually driving Filipino workers here to remittance centers to apparently take advantage of their earnings’ stronger buying power when sent to their families back home.

Remittance companies that cater to the huge Filipino community on the islands reported bigger volume of workers from the Philippines have been trooping their centers since the peso started slipping beyond P44 per $1 early this year.

Again, remittance companies are anticipating a much bigger number of Filipino workers dropping by their centers to send hard-earned greenback which is now equivalent to over P46 for every dollar.

Pressured by negative sentiment over low interest rates and tight dollar liquidity, the peso hit a 30-month low against the U.S. dollar, hitting $46 last month. The peso’s sharp fall was also blamed on President Estrada’s earlier comment that he hoped the dollar would not hit P45.

Higher dollar also spurred growth in the remittances of Filipino workers during the second quarter of the year.

During the same period, remittances to the Philippines jumped four percent from $11.215 million in the January-March period to $11.686 million in the second quarter of the year, according to official figures from the Banking and Insurance Division.

Workers from the Philippines remain the largest market in the local money transfer industry with seven of the 10 licensed remittance companies in the CNMI exclusively catering to the Filipino community.

In the first quarter of 2000, the commerce department noted an increase in the dollar remittances of Filipino workers at $11.215 million from the previous year of the same period’s $10.989 million.