by Rhea June S. Lara
Expenditure Accounts Division, Economic Statistics Office, NSCB

Net Factor Income from Abroad (NFIA) refers to the net flow of property income to and from the rest of the world (net payments on income) plus the net flow of compensation of employees (net receipts on compensation). The NFIA is added to the Gross Domestic Product (GDP) to come up with the Gross National Product (GNP).

In the Philippines, NFIA plays a major role in boosting the national economy. From 1987 to 2002, NFIA at constant 1985 prices totaled Php406.2 billion or 3.0% of the total GNP for the period covered. On the average, it accounts for 0.7 percentage point of GNP growth.

Recent figures show that from 1998 to 2002, total NFIA at constant prices amounted to Php307.3 billion pesos or 6.0% of the total GNP. Moreover, it now accounts for 0.8 percentage point of GNP growth. Over the last five years, NFIA reached its highest growth of 24.0% in 2000 backed by strong contribution of property income and compensation inflow.

Compensation of OFWs in the last five years equaled to Php438 billion and, on the average, contributed 24.7 percentage points to NFIA growth. In 2002, compensation of OFWs amounted to Php112.8 billion at constant prices and Php 402.5 billion at current prices. As of May 2003, the number of documented OFWs stood at 1.552 million, 86% of which are land-based workers and 14% are sea-based workers.

Dubbed as our country’s modern day heroes, OFWs contribute significantly to the nation’s growth and development and help weather economic slowdown through their compensation. OFW compensations have a percentage share of 141.5% to NFIA. They are a major source of the country’s regular foreign exchange income, which not only helps push the peso up but also spurs economic growth.

Editorial Board:

Romulo A. Virola, Secretary General
Estrella V. Domingo, Asst. Secretary General
Raymundo J. Talento, Director - ESO
Minerva D. Martin, OIC-EAD

For inquiries on this series, please contact:

Rhea June S. Lara
Expenditure Accounts Division, Economic Statistics Office, NSCB
Tel. No. (632) 895-2425; Fax No. (632) 895-2425
E-mail: rjs.lara@nscb.gov.ph