Rethinking Finance


I had an interview this past week with UnionBank’s Chief Economist, Carlo Asuncion, and the main headline then was that remittances hit a six-month high in the month of June, a 7% increase year on year to $2.638 billion. My introduction to the interview was to the tune of “it’s hard to see silver linings these days, but here’s one!” Not only was the latest print positive, it also surprised economists who were expecting a mere 2.4% jump. But the sad reality is that this print brought to light how countries abroad are doing better economically, not necessarily the Philippines. Whether this amount will spill over into consumption and growth is a completely different story, with many households simply trying to survive and be prudent with their finances, wherever they are sourced.

Month-on-month figures though are promising: cash remittances sent by overseas Filipinos rose by 10.7% from the May print. This comes as economists surveyed by Bloomberg slashed their growth forecasts for the country to 4.9% this year from the 9.6% contraction of 2020, the worst ever slump on record: a welcome reprieve, albeit still a drop in the bucket overflowing with problems.

But what got me to mull over remittances was not the economic windfall we hope to gain from those Overseas Foreign Workers (OFWs), but rather, how staggering the reality is that in the midst of lockdowns and travel restrictions, Filipinos continue to remit money home. What hits me very hard is the separation of families during these times, especially mothers from their children as they work hard abroad to provide a better future for the next generation. It is especially daunting for me, myself recently thrown into the mix as a transnational mother, a situation I never imagined I would ever be in. Incidentally, I had been reading resource articles on coping with separation anxiety, taking cues from studies on Filipino domestic workers and their family relationships. This is a subject I have been very interested in and have dabbled in as a researcher, but mainly as a former OFW trying to understand my place abroad.

Apart from the usual results that are evident in terms of difficulties in family dynamics and the unnaturalness in which families must now be cross-border, as well as some proposed solutions and mediators like the use of technology to connect, there was one specific finding from Pineros-Leano, et. al entitled, “Depressive Symptoms and Emotional Distress of Transnational Mothers: A Scoping Review” wherein the authors point out that many studies have shown that sending remittances back to the country of origin sparks feelings of happiness and fulfilment. To wit, being able to send gifts and remittances to their children makes women feel empowered and it reminds them that their sacrifice has been worth the effort of separating from their children. They pointed out that recent research on remittances among Latinx immigrants suggests that sending remittances to the home country is associated with lower odds of depression and psychological distress. Specifically, these studies found a 20% reduction in the odds of depression and 19% decrease in the odds of psychological distress among Latin American immigrants who sent more remittances. This links to many recommendations from psychologists saying that care packages help maintain parental-child bonds during difficult separations.

And I thought, well wow. Is this not the epitome of Rethinking Finance? That even if there is no replacement for unification and togetherness, ultimately money can buy happiness, money can maintain love. I had known that remittances were important measurements of family planning, strategizing, and investments, particularly for those worse off in the country who would have no other means to grow their incomes. We always think of the recipient benefitting and the sacrifice of the migrant. But I never really thought of it as a means to maintain well-being for the migrant as well, as their actual motivation to earn. We always color motivation as the migrant thinking of the future of their family, but motivation can simply be taken from the actual act of giving, the act of providing.

At the core of it is the basic idea that money is empowering. Access to finance is empowering. It in itself is enough to allow a migrant to continue with the challenges, which already under normal circumstances is painful, and under the present reality is almost unbearable.

How do we make any real-world use of this poignant truth, then? The truth that those who keep our economy running are doing it to keep themselves ever sane? Imagine that the surprise of remittance jumps, could, from my anecdotal social scientist perspective, be because in these, the hardest times economically, migrants feel an even stronger psychological need to bond and illustrate their presence to their families who are themselves embroiled in threats to their health on a continuing basis. We as researchers and economists have thought of remittances as windfall income, as insurance, as returns on investment. We have given faces to the numbers by painting them as superheroes wearing nurse uniforms, holding brooms, attending to foreign children, wearing sailor hats, standing in oil fields. But while they are heroic, they are also simply human beings struggling, using finance as a means to cope with the reality they find themselves in.

Now imagine a world where technology and finance can address this gap, this pain point of making remittances more personal, of making every peso sent home, not merely a figure on an app, a scribble on a withdrawal slip in their local padala, an “ask money” function on Facebook Messenger, but a bond between sender and receiver. I have spent 15 years in the industry, have met the top bankers in the Philippines and abroad and have never found a product that could capture the hearts and desires of remitters, and transmit to their beneficiaries that this is a care package, this is a way of reaching out, this is desperate and yet fierce attempt at love and connection.


Daniela “Danie” Luz Laurel is a business journalist and anchor-producer of BusinessWorld Live on One News, formerly Bloomberg TV Philippines. Prior to this, she was a permanent professor of Finance at IÉSEG School of Management in Paris and maintains teaching affiliations at IÉSEG and the Ateneo School of Government. She has also worked as an investment banker in The Netherlands. Ms. Laurel holds a Ph.D. in Management Engineering with concentrations in Finance and Accounting from the Politecnico di Milano in Italy and an MBA from the Universidad Carlos III de Madrid.