KUALA LUMPUR - Malaysia may freeze permits for foreign workers due to rising unemployment, the country's labour ministry said on Monday, in a move that comes after Singapore.

State news agency Bernama quoted the Director-General of Labour, Ismail Abdul Rahim, as saying that a freeze was one of the ways the government would seek to staunch the rise in unemployment.

He told Bernama that this was one of the options the ministry was actively studying to assist locals who were being displaced from work to be employed.

Official data shows that there are 2.1 million foreigners working in Malaysia, many of them from Indonesia and the Philippines, and that they account for 20 per cent of the workforce.

There may be as many as double that number when illegal immigrants are taken into account, according to estimates from some non-governmental organisations in Malaysia.

Unemployment in the country of 27 million people is forecast by the government to be 3.3 per cent this year and economic growth is set to slide to 3.5 per cent next year from an estimated 5.5 per cent in 2008.

Remittances by foreign workers are key to the economic survival of countries such as the Philippines as payments cover the current account deficit.

According data collated by the United Nations, over eight million Filipinos work overseas and remit over US$1 billion ($1.49 billion) a month, around 10 per cent of the country's economic output.

The UN ranks Indonesia second as a labour supplier in Asia with 2.7 million workers overseas and then Myanmar with an estimated 1.8 million.

The UN says that of the world's 191 million international migrants, half went from one developing country to work in another.