THE PHILIPPINES was the fourth-largest destination for remittances by overseas workers in 2019, according to the World Bank’s Global Knowledge Partnership on Migration and Development (KNOMAD) program.
Preliminary KNOMAD data indicate that remittances to the Philippines amounted to $35.1 billion in 2019, up 3.7% from a year earlier, behind only India ($82.2 billion), China ($70.3 billion) and Mexico ($38.7 billion).
Rounding the top 10 economies were Egypt ($26.4 billion), Nigeria ($25.4 billion), France ($25.2 billion), Pakistan ($21.9 billion), Bangladesh ($17.5 billion), and Germany ($16.8 billion).
Philippine remittances were 31st relative to economic output, with a share of 9.8% of gross domestic product (GDP).
The top-ranking countries in this category include Tonga and Haiti, where remittances make up at least a third of their respective GDPs.
In an e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the Philippines’ placement in the ranking to the “sheer number of Filipinos going abroad daily to seek greener pastures.”
In a separate e-mail, ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa added: “One thing I wanted to note was that the Philippines is a top-five recipient of remittances behind only India, China, and Mexico and yet we have a population dwarfed by those in the top three. Quite interesting how much remittance flows we can generate from such a small country,” he said.
Remittances support household consumption by those who remain in the Philippines, a category equivalent to around 60% of GDP.
Mr. Mapa said the effects of remittances on growth are double-edged. “Remittance flows represent one of our most stable sources of foreign currency and at the same time, they augment domestic incomes as family members send home cash. The technology transfer of Filipinos gaining better skills abroad… also helps improve the capital stock of the workforce.”
“On the flip side, being away takes a toll on the fabric of society with loved ones far away (which has) some negative implications for OFs (overseas Filipinos)… not to mention selected cases of maltreatment in some jurisdictions,” Mr. Mapa added.
UnionBank’s Mr. Asuncion said remittances are “something the Philippines would have to take advantage at this point.”
“The strong inflow of foreign currency from OFs does help the financial stability of the country and its foreign exchange (position). It even keeps the peso resilient amid volatility in the market,” he said.
IMPACT OF CORONAVIRUS OUTBREAK
The ongoing novel coronavirus outbreak (2019 nCoV) may prove a drag on remittance inflows this year, they said.
“The 2019-nCoV scenario presents a case wherein global growth as a whole may slow and this may see a negative impact on remittance flows,” ING Bank’s Mr. Mapa said.
The outbreak led several institutions to trim their growth forecasts this year. In the case of the Philippines, the National Economic and Development Authority estimated an economic impact ranging from 0.06% to as much as 0.7% off GDP growth.
However, Mr. Mapa said migrant Filipinos have “always found a way to send home money and make ends meet.”
“Their sacrifice should never be downplayed or discounted given that the act of sending home funds is driven by something higher than a profit motive. That being said, I am not counting them out but we may have to expect slightly slower inflows if economic conditions become more dire across the globe simultaneously.”
“[W]e must continue to utilize these flows to help build our country and its capabilities as a nation so that one day, Filipinos will have a real choice between staying here versus seeking better opportunities abroad.” — Revin Mikhael D. Ochave