An OFW Journalism Consortium news flash exclusive
by JEREMAIAH M. OPINIANO
MANILA—FILIPINOS in the Cayman Islands sent back home millions of dollars in remittances as reported by island’s monetary authorities, but the Philippine central bank only recorded a small portion of these amounts.
The Bangko Sentral ng Pilipinas (BSP) isn’t surprised at such discrepancies, given countries’ varied recording systems and definitions about “remittances”.
A recently-released report by CIMA of remittances from the British territory’s foreign workers showed that an estimated 2,572 Filipino workers there sent home US$16.79 million in 2008, $17.154 million in 2009 and $18.234 million in 2010.
There is a wide discrepancy if these were compared those numbers to what the Bangko Sentral ng Pilipinas. According to data Filipinos living in Cayman Islands sent $407,000 in 2008, $1.108 million in 2009 and $990,000 in 2010.
It is possible, says BSP’s Department of Economic Statistics Director Rosabel Guerrero, that the Cayman Islands Monetary Authority (CIMA) records as remittances includes other types of transactions such as services, investments and other transfers—not just earnings sent home by overseas migrants to their home countries.
Remittances, as an appendix of the International Monetary Fund’s 2007 version of the Balance of Payments (BOP) manual provides, “represent household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies”.
“Remittances include cash and non-cash items that flow through formal channels… (as) they (are) sent or given by individuals who have migrated to a new economy and become residents there, and the net compensation of border, seasonal, or other short-term workers who are employed in an economy in which they are not resident,” the 2007 IMF BOP Manual wrote.
[To know more what constitutes remittances, see this link from the IMF website].
The Cayman Islands (capital: George Town) is a British overseas territory found south of Cuba. It has three island groupings–Grand Cayman, Cayman Brac and Little Cayman. This territory with 54,878 people is a known hub for tourism and financial services, as the country’s gross domestic product per capita is the 14th highest in the world.
Its currency is the Cayman dollar (KYD), which is equivalent to $1.20.
Data source
CIMA’S first Cayman Islands Remittance Report said that the data comes from money service providers duly licensed by that country’s money services business. But as the BSP’s monthly data on remittances would say for a footnote, Guerrero said some remittances may have to pass through the United States or Canada since the headquarters of international banks and money transfer organizations are found there.
The same is also the case for the remittances from Filipinos in Saudi Arabia since many of these migrant workers’ remittances had to be cleared in US banks before being sent to the Philippines—and this is recorded as a US-originated, not a Saudi Arabia-originated remittance.
Guerrero’s office will officially inquire with the BSP’s counterpart central bank in the Cayman Islands on their data.
“Wow would they (CIMA) know if remittances (they recorded) are earnings sent home by foreign workers,” Guerrero told the OFW Journalism Consortium.
Guerrero added that “it will be difficult to validate” the discrepancies between BSP’s and CIMA’s data.
CIMA’s website said that as of the third quarter of 2011, there are nine licensed money service providers since the authority started issuing licenses to MSPs in 2002. On the Philippine end, only Allied Bank, owned by tycoon Lucio Tan, is the Filipino commercial bank that services the Cayman Islands through tie-ups with a Caymanian bank.
Guerrero also said that if money is sent through Western Union offices in the islands, the money has to pass through —or are “logged”— the company’s headquarters in the US and “it will be difficult to disaggregate” the origin country source or sources of remittances.
Cayman Islands has 16 category A banks which includes the Cayman-registered subsidiaries of international banks like ABN-AMRO, Hong Kong Shanghai Banking Corp. (HSBC), Royal Bank of Canada, Deutsche Bank and Merrill Lynch Bank. The islands’ developed financial services industry has made the Cayman one of the top five international financial centers in the world.
“Over 80 percent of more than $1 trillion on deposit and booked through the Cayman Islands, represents inter-bank bookings between onshore banks and their Cayman Islands branches or subsidiaries. These institutions present a very low risk profile for money laundering,” the CIMA website wrote.
Discrepancies ‘unsirprising’
THE case of the Cayman Islands, Guerrero claims, is not the first time the BSP received reports of remittance data with wide discrepancies. Italy and the United Arab Emirates, two top destination countries of overseas Filipinos, are some examples.
Though BSP’s remittances data are sourced from Philippine banks, Guerrero’ said the BSP has limited capacity to look at the remittance data of over-200 countries one by one where there are Filipinos. Should the BSP do that, the central bank can only look at the published statistics of counterpart foreign central banks.
CIMA’s remittance report showed that remittances going out of the Cayman Islands are declining—from $228.97 million in 2008 to $184.75 million in 2010.
Jamaicans in the Cayman Islands are the top remitters, being responsible for two-thirds of the remittance outflows. Filipinos account for a tenth, while Hondurans make up six percent of all remittance outflows.
Even the CIMA’s and BSP’s data covering the first two quarters of 2011 reveal the discrepancies for Filipino remittances. CIMA recorded $9.55 million in remittances as of June 2011, while BSP tallied $1.033 million for the same period.
But it is not only remittances data that have some discrepancies.
Caymand Islands’ Department of Immigration, in its latest quarterly statistical report, bared that there are 2,572 registered Filipino workers with valid work permits.
Data on the 2010 stock estimates on overseas Filipinos by the Commission on Filipinos Overseas showed that there are 794 Filipinos in the Cayman Islands, 694 are contract workers and 100 irregular migrants.
On data coming from the Philippine diplomatic offices, CFO assumes that data from the host countries are included apart from those data the embassy or consulate have such as passport applications, dual citizenship availees, among others.
Starting Janaury 2012, the government and the European Commission will operationalize a €1.8 million project to improve the country’s migration statistical system.
This news flash exclusive can be published / broadcast / posted online, provided the OFW Journalism Consortium is properly acknowledged.
