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Mon 30 Nov 2009 10:41 AM

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Dubai debt will not harm Filipino remittances

Filipino central bank chief says default will not have adverse impact on cash flows in near term.

A debt default by two of Dubai's flagship firms would not harm remittances from Filipinos working abroad, a pillar of domestic spending, the central bank said on Monday.

"I don't believe there would be a significant adverse impact on flows to the country in the near term," central bank governor Amando Tetangco told reporters.

"There continues to be construction and growth in the rest of the Middle East, particularly in Saudi Arabia. That should provide a window of opportunity for any workers who may be displaced."

About a tenth of the Philippines' 91 million people live and work abroad, mostly as merchant seamen or domestic help.

Remittances rose 8.6 percent to $1.45bn in September from a year earlier.

Of the September total, around $218m, or 15 percent, were sent in by Filipino workers in the Middle East, including Dubai.

The central bank has said remittances should grow 4 percent this year from last year's record $16.4bn.

The UAE offered banks emergency support on Sunday, the first steps to ease fears that a looming debt default by conglomerate Dubai World and its main property subsidiary Nakheel could derail the global economic recovery.

Tetangco said Philippine banks have no direct exposure to Dubai World and Nakheel.

"We will remain watchful of market developments, particularly how these impact on global demand and commodity prices." (Reuters)

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