VZCZCXYZ0010
RR RUEHWEB

DE RUEHBO #0609 0501705
ZNR UUUUU ZZH
R 191705Z FEB 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 1419
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHCV/AMEMBASSY CARACAS 9974
RUEHLP/AMEMBASSY LA PAZ FEB LIMA 5921
RUEHZP/AMEMBASSY PANAMA 1248
RUEHQT/AMEMBASSY QUITO 6562

UNCLAS BOGOTA 000609 
 
SIPDIS 
 
SIPDIS 
 
WHA/EPSC FOR PMAIER; EEB/IFD/OMA FOR ASIROTIC; TREASURY FOR 
MEWENS 
 
E.O. 12958: N/A 
TAGS: EFIN ECON EINV CO
SUBJECT: REMITTANCES REACH RECORD HIGH IN 2007 
 
¶1. SUMMARY: Colombia's Central Bank expects 2007 to rank as a 
record year for remittance inflows with the total estimated 
to reach USD 4.4 billion.  The amount represents Colombia's 
second highest source of legitimate foreign currency inflows 
after foreign direct investment (USD 7.5 billion), exceeding 
oil exports (USD 3.9 billion).  The United States and Spain 
remain the two largest sources of remittances to Colombia, 
though Euro-denominated remittances appear on the rise.  A 
slowing economy in the U.S. could bridle the flow of 
remittances to Colombia in 2008, but strong FDI, continued 
economic expansion of the Colombian economy, and high oil 
prices should offset any negative impact. END SUMMARY. 
 
¶2. Colombia's 2005 census estimated that 3.3 million 
Colombians live abroad.  Since 2005, Colombia's immigration 
service (DAS) estimates that almost 350,000 additional 
Colombians have left the country, though the annual total of 
emigrants appears to have decreased since the late 1990s. 
This significant expatriate population has remitted a 
steadily increasing flow of foreign currency to Colombia 
since 1999. Although final calculations remain pending, 2007 
remittances appear on track to increase 13 percent over 2006 
and have nearly tripled since 2000.  The average value of 
each remittance also increased from USD 264 to USD 341. 
 
¶3. In 2007, total estimated remittances amounted to 2.6 times 
Colombia's coffee exports and 1.2 times coal exports.  The 
United States and Spain continue to rank as the main sources 
of remittances, each supplying approximately 40 percent of 
the total.  Venezuela, the United Kingdom, Italy and Ecuador 
together account for an additional 13 percent of remittances 
to Colombia. 
 
¶4.  While our Central Bank contacts do not have precise data 
on the breakdown of remittances in Euros and the U.S. 
dollars, they acknowledge that Euro-denominated remittances 
have risen and the Euro's appreciation versus the dollar 
constitutes at least part of the increase in the value of 
remittances to Colombia.  However, their calculations 
indicate that the overall pace of inflows, facilitated by the 
steady decrease in wire fees charged by international money 
services and Colombian banks, and the higher amount per 
transaction account for the majority of the increase in 2007. 
 
¶5. Some local observers believe the rate of growth in 
remittances will slow in 2008 as the U.S. economy cools, the 
dollar remains weak, and the emigration of Colombians 
continues to slow as economic and security prospects improve 
in Colombia.  Nevertheless, the overall impact of a moderate 
decrease in remittances to the Colombian economy should 
remain minimal given expectations for approximately five 
percent GDP growth in 2008, rising FDI inflows, and high oil 
prices. 
Nichols