O'SEAS FILIPINO WORKER DOLLARS SEEN AS NOT REACHING REAL ECONOMY.

MANILA, Dec 1 Asia Pulse - Poor Filipinos may have to wait a little longer before the improved performance of the stock market, the increase in remittances from overseas Filipino workers and the strengthening of the peso begin to effect any improvement in their quality of life, according to senator Mar Roxas and Rep. Joey Salceda.

The politicians shared the view that the dollar remittances from overseas Filipino workers (OFWs) have failed to flow through into the real economy because they were trapped in financial markets, in the absence of business opportunities.

Instead, OFW remittances only helped the peso strengthen and provided enough foreign exchange in the domestic market to allow the government to fund part of its borrowings locally.

Socio-economic Planning Secretary Augusto Santos told a recent congressional hearing on developments in the Philippine economy that a huge part of remittances from overseas Filipino workers (OFWs) go into savings, which could explain the disparity in the country's gross domestic product (GDP) and the gross national product (GNP).

This is a reversal from earlier claims that OFWs have been boosting consumption, which drives growth for the domestic economy.

Bangko Sentral ng Pilipinas (Central Bank of the Philippines) data showed that OFW remittances grew by an average of 26.7 per cent in the third quarter while figures from the National Statistics and Coordination Board indicated that personal consumption expenditure rose only by 4.8 per cent in the third quarter.

NSCB data also showed that GDP grew by 4.1 per cent in the third quarter while GNP rose 6.5 per cent. GNP includes GDP, which is the output of the domestic economy, plus the net factor income from abroad (NFIA) which covers remittances from OFWs.