Remittances reach $226-M in 4 years

The CNMI has been witnessing significant growth in the volume of greenback being sent out of the Commonwealth each year beginning 1997, primarily because more than half of the islands’ workforce are expatriates from Asian countries.

In the period covering 1996 to 1999, the commerce department reported an annual average of 9.7 percent growth rate in total remittances by nonresident workers on the islands to their families back home.

According to a comprehensive report obtained from the Department of Commerce’s Banking Division, remittance transactions made by guest workers between 1996 and 1999 amounted $225.9 million, or an annual average of $56.5 million.

The Banking Division report disclosed an increasing trend in the volume of remittances beginning 1997 when the amount of money sent out of the CNMI to countries in Asia soared six percent to $52.4 million from the year ago’s $49.5 million.

The report also revealed that remittances mainly to China and the Philippines jumped 12 percent between 1997 and 1998 to $58.9 million, taking another major leap of about 11 percent last year to reach $65.1 million.

In the first six months of the current calendar year, volume of remittance transactions made by over 40,000 nonresident workers in the Northern Marianas grew by 13 percent to $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 throughout the world 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 P49 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.