BizCLIR

In the Philippines, cross-border transactions represent a steadily increasing component of the economy. In 2005, trade flows increased by 5.9 percent, cumulating at US$88.67 billion, up from US$83.72 billion in 2004. Specifically, exports receipts amounted to US$41.26 billion, 4 percent higher than 2004 figures. Expenditures on imported goods rose by 7.7 percent to US$47.42 billion, up from US$44.04 billion reported a year earlier. In the first eight months of 2006, foreign investments rose to US$1.36 billion, 20.6 percent higher than the same period in the previous year.

Of special interest in the Philippines is the flow of remittances. Nearly 11 percent of the GDP is now attributable to monies sent from abroad by OFWs; this is the highest rate of remittances in the region. A recent sharp increase in remittances is attributable not only to increased exports of Filipino labor—a phenomenon which, of course, entails myriad social consequences despite the positive economic impact—but also to the increased use of formal (and accordingly measurable) channels, including new banking products through which OFWs transmit their monies.

Overall, the laws, public institutions, and private stakeholders effectively support trade-related money flows in the Philippines. A variety of regional and international currencies are available, and flows take place through physical and, increasingly, electronic means. Basic trade finance products are widely available to traders. New technologies and competition from foreign banks have led to expanded service offerings and, to a lesser degree, have improved internal governance practices by domestic banks. Most recently, improvements in the fiscal environment have resulted in increased investor confidence. In fact, assuming continued progress in the incorporation of international standards into local practices, the Philippines can serve as a regional leader in future trade-related money flows.