The global financial crisis could have a major effect on the remittances of overseas workers that have long kept the Philippine economy afloat, the World Bank country director said Friday.

Bert Hofman also warned that the World Bank was ''far more pessimistic'' about the country's economic growth prospects than the government was, amid signs that the global crisis would be longer than initially expected.

He told a forum of local business people that there was the danger that many of the millions of Filipinos who have found work overseas might lose their jobs and be forced to return home.

''Migrants and remittances could be an added complication for the Philippines,'' he warned.

''The longer the global recession lasts, the more risks of large-scale return of migrants,'' Hofman said.

The Philippines is one of the world's leading sources of skilled and unskilled labor with up to nine million people, or about 10 percent of the population, living and working abroad.

The money they send home has become a pillar of the Philippine economy, making up about 10 percent of the country's gross domestic product. Total remittances in 2008 rose to $16.429 billion, up 13.7 percent from 2007.

Hofman said Philippine overseas workers were more vulnerable to the crisis than many believed.

While many workers were in highly-skilled fields such as healthcare where layoffs are unlikely, Hofman warned there was still a large contingent of manufacturing and construction workers in countries where growth is falling.

''The longer it takes (to resolve the crisis), the greater the likelihood that people will start laying off workers including migrant workers,'' he said.

Hofman also warned that there was a danger of protectionism and governments enacting policies favouring local workers over foreign labor.

He conceded that remittances had been going up in recent months but said this might be a case of laid-off workers remitting the money they received as part of their severance. (AFP)