The Philippines expects the flow of remittances from Filipino migrant workers to sustain last year's pace and reach $20 billion this year despite the political turmoil and economic difficulties in some of the countries where the workers are employed.

Monetary officials aired this optimism Friday after reporting that the workers' remittances in the first two months of 2011 reached $2.98 billion, representing an increase of nearly 7 percent from the year-ago inflows.

Amando Tetangco Jnr., governor of the Bangko Sentral ng Pilipinas (BSP), the country's central monetary authority, said the two-month rise showed that the remittance flows have "the capacity to absorb shocks in the global environment."

Mr Tetangco said this growth also "continues to underpin the resilience of remittances notwithstanding the ongoing crises in the Middle East, North Africa, and Japan."

There are around 10-11 million overseas Filipino workers (or OFWs, by which the migrant workers are referred to in this country), with an additional 1.33 million individuals added in January to November last year, according to data from the state Philippine Overseas Employment Administration.

The income of these newly deployed OFWs is expected to boost the amount of remittances to be sent to the Philippines this year, the BSP chief said.

Recently, however, some sectors have expressed concern that OFW remittances, despite boosting overall GNP numbers, have largely driven personal consumption spending in the Philippines, with minimal amounts going into savings or small business ventures.

BSP's own surveys of consumer spending patterns have indicated that less than half of OFW families receiving remittances set aside portions of the money into savings accounts.

The latest BSP survey results showed that in the first quarter of this year the percentage of OFW households that kept savings even went down to 41.4 percent from 43.7 percent in the preceding quarter.

Only 5.7 percent of the families channeled remittances into investment activities, the latest survey also revealed.

The bulk of the spendings has been on food, education, medical costs, and debt payments, the survey results showed.

Another recent survey, conducted by marketing research firm Synergy Business Consultancy, showed a tendency for families receiving OFW remittances to spend their money more on leisure activities and on electronic gadgets.

Since they have higher purchasing power compared to those who do not get to receive remittances regularly, families of migrant workers are "more inclined to go to shopping malls, eat out, socialize, and buy the latest electronic gadgets," according to the research findings.

Noting these trends, a group of institutions-the United Nations Development Programme (UNDP), financial services company Western Union, Philippine government agencies National Economic and Development Authority and Commission on Filipinos Overseas, and local-level government units-last week launched a project aimed at channeling remittances toward activities that generate more sustainable benefits.

The project, which is supported by a $250,000 grant from Western Union's philanthropic unit, the Western Union Foundation, aims to "harness the power of remittances" from migrant workers to drive sustainable economic development.

Called the "Overseas Filipinos Remittances for Development: Building a Future Back Home (OFs-RED) Project," the undertaking will "test a mechanism to facilitate and direct overseas remittances towards savings and investment in livelihood improvement and entrepreneurship for the poor and vulnerable, and ultimately create jobs and reduce poverty."

Renaud Meyer, UNDP country director in the Philippines, said the OFs-RED project will help speed up efforts in the Philippines to achieve the Millennium Development Goals, in particular the target to halve poverty by 2015, by supporting the "creation of an enabling environment for overseas Filipinos and their families to use remittances for development."

The UNDP-coordinated initiative will work on developing a model for the pooling of remittances and channeling them into development activities. This model will be tested in two pilot sites-Taguig City in Metro Manila and the Ilocos Norte province in the northern Philippines-over the next two years.

Western Union Foundation president Luella d'Angelo said at the project's launch in Manila: "At Western Union, we believe that leaving home to work should be a choice, and not a necessity borne of lack of options. We share the dream that some day, people in the Philippines and in developing countries everywhere will have the choice to stay with their families, that jobs and opportunities at home will provide a choice, and that going overseas will be but one way to make a better life."

A similar project with equal funding from Western Union, he said, will be extended to Morocco with a view to creating a model that could be replicated across the globe.

-- J. Galang