Gloria Macapagal-Arroyo

President of the Republic of the Philippines 2001 - 2010

Rise of the Service Economy


Services are the largest component of the economy, accounting for half of all employment (January 2010 round of the Labor Force Survey). The growing share of services in GDP (Figure 1) can be credited to the growth and development of trade, communications, private services, and, to a lesser extent, finance.

Structural changes have stemmed from the rise of global outsourcing brought about by the information revolution and the wage differentials among countries. Moreover, the growing influx of overseas Filipino worker (OF) remittances has been a source of growth for services, as these have supported the trade and finance sub-sectors. Policies that have contributed to the development of the service sector include liberalization of the telecommunication, civil aviation, retail trade and banking industries. Moreover, the government has also been nurturing the nascent medical tourism and retirement industries.

Figure 1. Percent Share in GDP

Figure 2. Services Sub-sectors Percent Share in GDP

Business process outsourcing (BPO) ( 2 photos of BPO sites)

Business process outsourcing (BPO) is a source of rapid and steady growth in the services sector. Outsourcing revenues are projected to increase annually by 20 to 30 percent and reach around US$12.0 billion by 2011. In the call center industry alone, revenues reached $5 billion in 2009, or a 22.0 percent growth from revenues in 2008.

In 2007, the Philippine share of the global IT-BPO market was estimated at 8 percent, larger than its 5 percent share in 2005, and this is expected to expand further. In 2009, business services, which include BPOs, grew by a robust 13.2 percent, higher than the 12.8 percent in the previous year.

Such BPO growth is not surprising as the Philippines has been cited as one of the most attractive providers of outsourced services. The comparative advantages lie in the country's lower labor cost and quality manpower.

The neoIT Attractiveness Index in the BPO Landscape has ranked the country number two in the world, next to India. The country is noted for cost effectiveness and excellent English proficiency. (NeoIT, however, also mentioned that the labor force was not highly skilled in IT outsourcing, while the country had an unfavourable geopolitical situation and lacked infrastructure.) The overall positive outlook was supported by the 2005 AT Kearney Attractiveness Index which placed the country two notches higher (compared to the 2004 Index) to the top four in the world, along with India, China and Malaysia. English proficiency in turn is partly attributable to the Philippines' historical connection with the United States.

For backroom accounting operations, the country's CPA's are adept in Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS) for financial reporting, which are used in Europe, the U.S. and Japan. Likewise, foreign outsourcing companies continue to seek Filipino medical transcriptionists for their familiarity with U.S. medical standards, terminology and practices. Accessibility to cost-effective telecommunications and other business infrastructure has also boosted the industry. The 12-hour time difference between the U.S. and the Philippines facilitates the speedy delivery of outputs to U.S. hospitals.

Currently, the Contact Centers sub-sector remains to be the biggest revenue-generating BPO segment, injecting US$ 5.0 billion in revenues into the economy and employing 280,000 workers in 2009. (Source: CICT, BPA/P and BOI)

Enormous potential for growth is seen in the non-voice sector. A study by the Everest Research Institute cited that by 2012, fully 90 percent of the global BPO industry will be non-voice, with an estimated $220-$280 billion market potential. Non-voice services include back-office processing, digital animation, game development, legal and medical transcription, and software development. Locally, around 46 percent of the industry's growth comes from the non-voice sector. The study projected that revenues from the sector will surpass that from the voice sector in three years time.

Back office operations have been increasingly outsourced in the Philippines. It is the second largest contributor in terms of total industry revenues. In 2009, revenues reached US$ 1.1 billion while employment reached 86,000. The key players in the sub-sector include AIG Business Processing Services, Inc., which performs check preparation, accounting and disbursement services for member companies; Caltex Shared Service Center (CSSC), which provides accounting and financial services to Caltex business units in the U.S., UK, Hong Kong, Singapore, and Thailand; Maersk Administrative Center Ltd., which does general accounting documentation for the company's 11 branches; and Procter & Gamble Asia Pte. Ltd., which performs a host of accounting and financial services for P&G affiliates in Southeast Asia, North America, Korea, India, Taiwan, Australia, Hong Kong, New Zealand and Japan.

The Philippines is also one of the key players in the medical transcription arena. There are 50 medical transcription (MT) companies and 13 MT schools currently operating. The U.S. accounts for 47% of the $25-billion market, with approximately 6,700 hospitals whose medical records have to be converted to electronic format in order to comply with the requirements for Federal certification. However, the tight supply of medical transcriptionists in the country has hindered the industry from reaching its growth potential. Hence to address this, academic institutions specializing on MT have been established, while existing schools have begun offering MT courses.

Source: Breakthroughs! The Philippine Business Process Outsourcing Newsletter, January-March 2010. Vol4 no1 As cited in "Nonvoice BPO sees opportunity in crisis". 3 December 2008. Other sources: "Phils boosts its BPO capabilities to go beyond Non-Voice", BPAP Newsletter. January-March 2009. "Global Trends in Nonvoice BPO". 3 December 2008. Source: Breakthroughs! The Philippine Business Process Outsourcing Newsletter, January-March 2010. Vol4 no1

Also, the Philippines has been a major producer of animation for the North American, European and Japanese markets since the 1980s. These include major projects completed for Hanna Barbera, Disney, Warner Bros, Nelvana, Toei Japan and many other internationally recognized producers of animated features worldwide. The sector benefits from a sustained and strong track record, a reputation for creativity in animation, English proficiency, a western sense of humor, and varied cultural exposure.

Government support was key to the growth of outsourcing. To promote increased investment in the ICT sector, the Omnibus Investment Act was amended to include ICT in the investment priority plan. Firms providing ICT services, community access, internet services, and ICT learning, were given incentives: Income Tax Holidays (ITH), employment of foreign nationals, and unrestricted use of consigned equipment. The government also rationalized and coordinated the development of techno-parks and cyber-cities throughout the country for greater complementariness in investment and infrastructure development. This led to the boom in IT park development, with space occupied by new and expanding IT ventures. The government has also been sponsoring various fora, workshops and foreign missions to promote the country as investment destination and service provider. Brand development teams were created to promote each priority area.

Having liberalized the telecommunications industry, the government also worked on accelerating the granting of permits and licenses for private sector providers of broadband services and other key services. The National Telecommunications Commission, the regulatory agency for the telecomm industry, has seen to it that high-speed networks, services and connectivity in ICT hubs are provided at lower cost as competition is stimulated.

To increase the numbers of those competitive in ICT skills, the government implemented policies to upgrade ICT education and to advance the use of ICT and ICT courses at all levels of the education system. Quality standards for the curricula of ICT subjects in basic and tertiary education were established. The Commission on Information and Communications Industry (CICT), created through Executive Order 269 in 2004, was able to forge alliances with state universities and colleges (SUCs), NGOs, and international certification organizations. The alliances spearheaded the integration of specialized ICT degree courses into the curricula of public and private academic institutions. ICT learning hubs for distance learning were also offered for the training and certification of ICT professionals.

The government will continue to invest in greater connectivity. The state will set up computer laboratories in all public high schools and will connect them to the Internet. It will also create ICT hubs around the country. As of July 2009, the CICT has evaluated 40 cities, promoting 10 of them as hubs. It is important to focus on a select number of cities to meet the location patterns of BPO firms, which are more particular about cities, rather than countries, when making investment decisions. The current list of "Next Wave Cities" includes Davao City, Sta. Rosa in Laguna, Bacolod City, Iloilo City, Metro Cavite, Lipa City in Batangas, Cagayan de Oro, Malolos in Bulacan, Baguio City, and Dumaguete City. These next wave cities are presented as cheaper alternatives to first wave cities Metro Manila, Cebu City, and Clark in Pampanga, and will temper rising salary and rental costs. The first wave cities comprise around 85 percent of the total number of persons employed in the IT-BPO industry.

Real estate

In January 2009, despite the global economic crisis, bank lending to real estate, renting and business services reached P275.7 billion, 36.1 percent higher compared to the same period in 2008. The resilient performance of the sector amid the global downturn could be attributed to the following factors:

  • BPOs are expanding and in need of more office space
  • OFs are buying condominium units.
  • Pag-ibig housing interest rates have been slashed in half
  • A retirement industry is emerging

The outsourcing sector alone occupies 670,000 square meters of prime and grade A buildings in the business districts of Makati, Ortigas, Alabang, Eastwood City, Fort Bonifacio, Robinsons Cyberpark and Araneta Center. Currently, there are 199 BPO sites nationwide, of which Luzon has the lion's share at 171, followed by Visayas with 25 and Mindanao with 3. In Luzon, Makati has the largest slice at 35% followed by Ortigas at 15%, Eastwood City at 10% and the rest at 32% (Source: Leechiu and Associates).

Demand for office space is seen to spur supply. According to Leechiu and Associates, on top of the existing business districts of Cubao, Escolta, Ortigas, Binondo and Makati, there are 16 emerging business districts with about 1,300 hectares of developed land. These are: North Triangle City, Eastwood City, Araneta Cyber Center, Greenhills Redevelopment, EDSA Central, Robinsons Gateway Center, Rockwell Center, Fort Bonifacio Global City, McKinley Hill, SM Central Business Park, Metropolitan Business Park, Newport City, Aseana IT Business Park, Asiaworld City, Madrigal Business Park and Filinvest Corporate City.

The Chamber of Real Estate and Builders' Associations, Inc (CREBA) is cashing in on OF expenditures. It notes that OFs spend 30 percent of their income on housing - whether to buy a new home, renovate existing homes, or pay rent. CREBA has observed that the increasing inventory of housing projects in Metro Manila and key cities is driving prices down. It is making the market "attractive for second homes and first time home buyers."

Source: BPO sector pinning its hope on 10 next-wave cities. BusinessMirror. 16 April 2010.


Tourism made significant milestones in 2007, breaking the 3 million mark for tourist arrivals in the country, to reach 3.1 million, from 2.8 million in 2006. Tourist spending climbed to US$4.9 billion from US$2.6 billion in 2006.

In 2009, 28 new tourism projects worth P 36.3 billion were endorsed. These are expected to hire 15,567 people once completed. Majority of these are in tourism economic zones, such as the Bagong Nayong Pilipino Entertainment City, Eagle Entertainment City, and the Embarcadero de Legaspi. The airline sector responded and invested in new aircrafts for the growth of the travel industry. Cebu Pacific, SeaAir, and Zest Airways poured P15.9 billion in additional investments.

Top destinations in the country are Cebu, Camarines Sur, Metro Manila, Baguio City, Davao City, and Boracay Island. Koreans were the major tourist market for Cebu, while Americans comprise the majority of tourists to Camarines Sur. In the latter, an 18-hectare man-made lake called Lago del Rey was opened to accommodate wakeboarding, which is gaining in popularity in the area. The growth in tourism in the regions has encouraged more local governments to beef up their tourism industry and promote their regions as destinations.

Based on the World Economic Forum (WEF) Travel and Tourism Competitiveness Report 2009, the country has an advantage in terms of price competitiveness, human resources, affinity for travel and tourism, and the prioritization of travel and tourism.

To boost the industry's growth, the government, through the Department of Tourism (DOT), continues to implement its aggressive promotion campaign, focusing on core markets like the US and Korea, momentum markets like Australia and Russia, turn-around markets like Hong Kong and Singapore, and maintenance markets like the UK. In addition, sustainable tourism development is being promoted, which includes Manila/Tagaytay and Clark/Subic, through infrastructure development, to improve mobility of tourists between destinations.

A major turning point was the partial liberalization of the airline industry. It unleashed opportunities with the low-cost carrier business model which caters to domestic or near-shore travel. Domestic airlines that are now increasing capacity are being encouraged to service unmet demand by expanding operations to international routes. Charter flights are being facilitated to ease connectivity constraints in key markets. More airports are being opened to allow tourists to proceed immediately to their destinations, decongesting traffic at the NAIA. Facilities and services in the Manila, Cebu, Bohol, Palawan and Clark international airports are being upgraded. Their capacities are continually assessed to determine future expansion.

Source: 2009 Industry Report, Department of Tourism.

Private sector participation is mobilized via pre-zoning and titling land with high tourism values. Thanks to the passage of the Tourism Act of 2009, the flow of foreign and local investments is boosted through the proclamation of Tourism Enterprise Zones. The government will develop financial programs with state financial institutions and local banks for credit windows servicing micro and small tourism enterprises. Tourism will continue to be a priority activity in the Investment Priorities Plan and in government sales and investment missions.

For the near term, the promotion of higher value tourism products and services is being pursued to further enhance the sector's growth. In addition, the country is being promoted as a medical, health and wellness destination. The lead areas are Metro Manila for medical tourism given its major hospitals, Cebu for health and wellness tourism with the proliferation of spa centers, and Pampanga for the retirement industry.

In 2004, the Philippine Medical Tourism Program (PMTP) was created under Executive Order 372. The PMTP is a private-public partnership to attract foreign clients for medical care and wellness services. To encourage investments in the sector, the government provides fiscal and non-fiscal incentives to businesses registered under the Philippine Economic Zone Authority (PEZA) or the BoI. The local industry is gearing up for a surge in medical tourists as hospitals (e.g. Cardinal Santos Hospital, Asian Hospital, Delos Santos Medical Center) have announced plans to upgrade their facilities.

The government is positioning the Philippines as a Southeast Asian "retirement haven," hoping for a share of the estimated 900 million retirees that developed countries are expected to produce from now to 2015. Recently, President Gloria Macapagal-Arroyo received from the Philippine Retirement Authority (PRA) its program composed of Memoranda of Agreements (MOAs) between the PRA and various government agencies.

It has been estimated that a fully-developed Philippine Retirement Industry could create four million jobs and generate income of $44 billion by 2015. Target markets of the PRA include the US, Japan, Korea and Taiwan. The PRA, with the support of the private sector, particularly real estate developers, hospitals and leisure area owners, plans to set up retirement villages in Baguio City Tagaytay City, Subic, Clark, Cebu, Iloilo, Boracay, Davao and Cagayan de Oro.

Air transport

The air transport sector has been expanding since 2004. Its strength is attributed to the civil aviation liberalization policy with the passing of Executive Order 219 in 1995. For domestic air transportation, restrictions on domestic routes and frequencies were eliminated and so were government controls on rates and charges. For international air transportation, the EO allowed at least two international carriers to be designated as official carriers for the country.

The reforms in the domestic air transport made possible the entry of new players in the industry, such as Cebu Pacific, Air Philippines, Asian Spirit, Mindanao Express, Laoag International Airways, and SeaAir. This resulted in unprecedented competition, yielding more efficient, low-cost airlines to operate profitably at fares lower than pre-competition days. The trend of declining airfare is seen up to now with the entry of international budget providers (e.g. Tiger Airways), offering cheaper means of travelling abroad. More competition has provoked major airlines into re-fleeting with bigger planes.

The transportation sector also stands to benefit from increased participation in bilateral air services agreements with Bahrain, Canada, Russia, Iran, Cambodia, Italy, Myanmar and Peru, which will result in increased capacity and new air transportation service markets.


On the average (from 2000-2009), trade has consistently occupied the largest slice (35 percent) in the services sector, and retail trade makes up 76% of the trade sector. While the big size of retail can be attributed to the mushrooming of malls all over the country – there are now 15 SM malls in Metro Manila and 21 in the provinces, while there are 23 Robinson's Malls all over the country – small-scale retailers are also seen to be flourishing everywhere, with the sub-sector becoming the breeding ground for new Filipino entrepreneurs. Small retail personalities and store formats have emerged to cater to the different needs of consumers.

The inflow of OF remittances has sustained personal consumption, which in turn benefits the trade sector in the supply side. It is natural for OFs to invest part of their incomes in small service businesses like retail stores, hence boosting the growth of small and medium retailers. The role of remittance can be seen in the positive relation between gross value-added in trade and OF remittances (Figure 3).

Myrna S. Austria, "The State of Competition and Market Structure of the Philippine Air Transport Industry", Philippine Institute for Development Studies PASCN Discussion Paper No. 2000-12, November 2000 (Revised July 2001) Sources:, Opinion of Roberto Claudio, chairman of Toby's Group of Companies and past president of the Philippine Retailers Association Emilio T. Antonio Jr., et. al, "IT-enabled Services in the Philippines: Prospects and Issues", AT10 Research Conference, 20-21 February 2003

Figure 3 Trade and OF Remittances

Sources: National Statistical Coordination Board, National Income Accounts; Bangko Sentral ng Pilipinas

Moreover, the implementation of the Retail Trade Liberalization Act of 2000 (RA 8762) , which aims to increase retail competitiveness in the domestic market by attracting big foreign retailers, has slightly affected the sector, particularly in 2003 and 2004. Approved foreign direct investment in trade ballooned to P760 million in 2003 from P59.3 million in 2000. Although it declined to P52.5 million in 2004, it accelerated to P19590.6 million in 2006. However, the said act was criticized for failing to attract big retailers into the domestic market.

In 2005 only 10 foreign entities entered the market: PriceMart, Orkam Engineering, Ltd., McDonald's, Watson's Personal Care Services, Adidas Salomon AG, Caltex Services, Inc., Petron Corp., Louis Vuitton Moet Hennessy (LVMH), Tan Chong International, Ltd., and Mitsui & Co. Ltd. Barriers for entry are identified as: official provisions on joint ventures, low gross margins (because of the size of the underground retail economy), and low buy-out-driven growth potential (few qualified local retailers). Overall however, these 10 enterprises have been challenging local retailers to become more innovative and to aspire for world-class status.

For retail enterprises with paid up capital of at least $7.5 million (Category C), foreign equity is allowed up to 100%. For enterprises with paid up capital of $2.5 million to $7.5million (Category B), 100% equity is likewise allowed but only after two years of the effectivity of the Act (i.e. 2003). Before then, foreign equity limit is 60%. Category D caters to enterprises specializing in high-end and luxury products with a paid up capital of $250,000 per store. Foreign equity limit in Category D is likewise 100%. RA 8762, however, reserved small retail trade with capitalization of less than $2.5 million for Filipino nationals. Source: National Statistical Coordination Board. Kristine Carmela F. Gonzales, "Take 2 for retail trade liberalization", Business World, July 27, 2006


By far, the most dominant segment in the telecom sector is the cellular telephone system (CMTS) whose dramatic growth was fuelled by an unprecedented explosion since 1998 in the use of Short Messaging Service (SMS). The number of subscribers in CMTS stands at 57.3M in 2007 compared to only 22.5M in 2001. Teledensity, a measure of the supply of telecommunication services, also improved from 1.17 in 1992 to 9.12 in 1999, albeit it declined to 7.76 in 2005 on account of the shift in demand for wireless services.

In 2007, installed teledensity was at 8.10 while subscribed teledensity was at 4.45. Growth in communications was robust ever since, registering double-digit rates. By 2004 it comprised more than half of the transportation, communications and storage sector, at 51.1 percent, compared to almost a quarter share in the pre-liberalization stage.

Technology drivers to growth lie in fixed broadband services, wireless technology for wireless internet, and 3G-enabled services which are now aggressively being marketed to create and meet surging demand.

While technological developments have opened more access options, they would not have been possible without the de-monopolization of the telecommunications industry in the early 90's. The Ramos administration implemented liberalization policies to build a universal telecommunications infrastructure meant to bring a telephone even to the country's remotest villages by the year 2000. Particularly, E0 59, E0 109 and RA 7925 interconnected all telecommunications carriers, and mandated all operators of International Gateway Facilities (IGF) and Cellular Mobile Telephone Systems (CMTS) to install a quota of landlines. This effectively increased industry competition.

Figure 4. Percent Share in Transportation, Communications and Storage

Source: National Telecommunications Commission. Ramonette Serafica, "Competition in Philippine Telecommunications: A Survey of the Critical Issues", Philippine Institute for Development Studies, Policy Notes No. 2001-03: May 2001


Growth in the financial sector has been on an uptrend since 2001 and is expected to continue its ascent in the next years. Lately, the sector's share has grown to be larger than that of ownership of dwellings and real estate (ODRE) and government services.

The increasing share began with the gradual liberalization of the banking system which started in the 1980s. The liberalization of the banking system has resulted in increased competition in the banking system, especially in the granting of loans. This has lowered interest rates and has improved profit and cost efficiencies of banks. The liberalization of the telecommunications sector also served as a catalyst to the development of the financial sector. The deregulation and interconnection policies in the telecommunications industry stimulated availability, affordability, and accessibility of telecommunication services, which were vital to financial services. However, it was the advent of automated teller machines or ATMs in the early 1990s that allowed banking services and transactions to continue beyond traditional banking hours.

Laws and rules passed in recent years have spurred the growth of the sector. The Special Purpose Vehicle Act (RA 9182) was passed in 2002, granting tax exemptions and privileges to SPVs which acquire or invest in non-performing assets. Hence, from a high of 17.3 percent in 2001, the ratio of non-performing loans to total loans decreased significantly to 8.2 percent in 2005 and 3.0 percent in 2009.

Speech delivered by BSP Governor Amando M Tetangco, Jr. at the launch of GlobeQUEST TouchPoint, Makati City, 4 August 2006.

In January 2002, the adoption of the inflation targeting framework for monetary policy aimed at price stability, or low and stable inflation. This approach entails the announcement of an explicit inflation target that the BSP promises to achieve over a given time period. Since adopting inflation targeting, inflation was significantly reduced from 6.8 percent in 2001 to 3.0 percent and 3.5 percent for 2002 and 2003 respectively. In 2009, inflation was down to 3.2 percent.

To keep pace with modern banking and finance standards, Bangko Sentral, the Insurance Commission (IC), and the Securities and Exchange Commission (SEC) shifted to a consolidated and risk-based capital adequacy (RBCA) approach in the supervision of their respective areas. Basel II reforms that the BSP instituted fortified the capital base of the banking system. While the international Basel II standards required a capital adequacy ratio of 8% , Philippine banks had to follow BSP's higher threshold of 10%. In actual fact, the banks exceeded both minima, posting ratios of 14.8 percent on a solo basis and 17.8 percent on a consolidated basis as of September 2009.

To promote and accelerate the development of the capital market, the BSP broadened the array of available financial products in the capital market, and allowed third party custodians to open an account in the Registry of Scriptless Securities (RoSS) at the Bureau of Treasury.

For its part, the SEC expanded investment options by approving the registration and licensing of the Marketplace for SME Receivables Purchase (M4SME-RP) as an alternative trading system (ATS) for the Development Bank of the Philippines (DBP).

The Securitization Act of 2004 (RA 9267) promoted the development of the capital market by supporting securitization – providing the legal framework and creating a favorable market for asset-backed securities. It exempted the secondary trading of securities from value-added and documentary stamp taxes.

The Financial Sector Forum was established to strengthen coordination among the Bangko Sentral ng Pilipinas, SEC, Philippine Deposit Insurance Corporation (PDIC), and Insurance Commission.

To prevent and minimize systemic risks in the capital market, efforts were aimed at strengthening regulations in accordance with international standards. However, the much needed reforms required legislation. To date, only one of the bills, the Credit Information System Act (RA 9510), has been passed.

To address the health of the pension system, the Personal Equity Retirement Account (PERA) Act (RA 9505) was passed in 2008. This is a voluntary savings mechanism that supplements the mandatory savings for SSS and GSIS members, encouraging overseas Filipinos to invest in private pension investment schemes.

In the midst of the 2008/2009 financial crisis, the government amended RA 9576 to increase the maximum deposit insurance coverage of the Philippine Deposit Insurance Corporation (PDIC), from P250,000 to P500,000 per depositor.

So entrenched were the reforms by 2008 that the Philippine financial system merely shrugged off the collapse of Lehman Brothers which triggered the Global Recession.

So entrenched were the reforms by 2008 that the Philippine financial system merely shrugged off the collapse of Lehman Brothers which triggered the Global Recession.

Overseas Filipinos (OF's)

Reports from the Philippine Overseas Employment Administration (POEA) indicate that demand for Filipino workers abroad remained broadly strong even during the crisis. The number of Filipinos who left for employment abroad rose by 15.1 percent in 2009 to 1.4 million, from 1.2 million in 2008. Why the resilience of OF deployment despite the global downturn?

  • Many overseas Filipinos are highly skilled and are employed in sectors less vulnerable to recessions, like health care and education
  • The reported number of displaced OFs is small compared to the total stock
  • There is a gradual increase in the share of workers with permanent resident status, which implies more long-term employment
  • The government continues to implement programs to assist displaced OFs (e.g. find other work opportunities in the same or another country)
  • POEA indicates that labor demand will remain strong in some countries given the needs in their health care, education, and power/energy industries

Top Ten Countries of Deployment of OFs, 2009

Source: POEA

In 2009, 77 percent of the deployed workers were land-based and 23 percent sea-based. The top ten countries of deployment are Saudi Arabia (27 percent), followed by UAE (18 percent), Hong Kong (9 percent), Qatar (8 percent), Singapore (5 percent), Kuwait (4 percent), Taiwan (3 percent), Italy (2 percent) Canada (1.6 percent) and Bahrain (1.4 percent).

Demand for migrant workers indeed remained healthy. Based on the report of the POEA, the most in-demand skills in the international labor market in 2009 were household service workers, nurses (highest demand was in Saudi Arabia, followed by UAE, Singapore, Kuwait and UK), production and related workers (highest in Taiwan, followed by Qatar, Oman, Kuwait, South Korea, Canada, Malaysia and Brunei), caregivers (highest in Taiwan, Israel and UK), wiremen, electrical and related workers, welders, flame cutters and related workers, cleaners and related workers, cooks and related workers, laborers, general workers and plumbers, pipefitters and related workers and seafarers.

Filipinos are at an advantage with such global demand for workers, given their English skills. However, English is not the only advantage. United Arab Emirates Labor Minister Saqr Ghobash is quoted to have said that many employers prefer Filipinos over other migrants as they are "more disciplined" and "more skilled" in their work. "We have had an extremely good experience with Filipinos… According to reports, Filipinos have one of the lowest crime rates. So they are most welcome and most respected," he remarked.

Annual Remittances of Overseas Filipino, 1990-2009

Source: Bangko Sentral ng Pilipinas

BSP data showed that from US$1.2 billion in 1990, remittances increased tremendously to US$17.3 billion in 2009 or an annual average growth rate of 16.4 percent.

FY 2009 Overseas Filipinos' Remittances, by Country and by Source

Source: Bangko Sentral ng Pilipinas

Because of the global financial crisis, the IMF and the World Bank had initially forecast that remittances would contract by 4% in 2009. Bangko Sentral's official forecast was flat or zero growth. (In the latter part of the year, the government, the IMF and the World Bank revised their projections to 4 percent growth.)

Defying these expectations, the 2009 remittances of overseas Filipinos (OF) coursed through banks summed up to US$17.35 billion, 5.6 percent higher than the level recorded in 2008. Remittances from sea-based and land-based workers both recorded gains of 12.1 percent and 4.2 percent, respectively. The major sources of remittances as reported by the BSP were the U.S. (42.2%), Canada (11.0%), Saudi Arabia (8.5%), U.K. (5.0%), Japan (4.5), Singapore (3.7%), United Arab Emirates (3.7%), Italy (3.0%), and Germany (2.5%).