Remittances from overseas foreign workers (OFWs) – particularly healthcare professionals – significantly stimulate the Philippines’ economic growth and development, a new research study finds.
Economist Alyssa Nuñez of the University of Asia and the Pacific conducted the study, which comes as the Bangko Sentral ng Pilipinas recently reported that monthly cash remittances reached a six-month high, rising 2.1 percent from one year ago.
According to Nuñez, it is clear that remittances from OFWs in the US—specifically those working in the healthcare sector—are incredibly important to the wellbeing of individuals and families in the Philippines, as well as the growth and stability of the nation’s economy.
Remittances have played an increasingly significant role in the Philippine economy. Remittances to the Philippines totaled $31.19 billion, or 9.2 percent of the Philippine GDP, in 2020.
By way of comparison, total remittances to the Philippines were $10.7 billion in 2005, and only $290.8 million in 1978.
Among the study’s findings is that the US is by far the largest source of remittances to the Philippines, accounting for nearly 41 percent of all remittances sent to the country in 2021.
The next closest country accounted for only 7 percent of remittances to the Philippines that year.
The study affirms that remittances provide stable support for the household consumption of essential goods, help alleviate poverty, and increase savings and investments.
A survey by the Bangko Sentral ng Pilipinas found that 96 percent of Filipino households spent a good portion of remittances on food and other household needs, 50.5 percent spent them on education, and 45.8 percent used them toward medical expenses.
BSP data showed that personal remittances from Overseas Filipinos (OFs) rose by 2.5 percent to $3.32 billion in July 2023 from $3.24 billion in the same month last year.
BSP said the growth in personal remittances in July 2023 was due to higher remittances sent by land-based workers with work contracts of one year or more and sea- and land-based workers with work contracts of less than one year.
Cumulatively, personal remittances reached $20.91 billion in the first seven months of 2023, higher by 2.9 percent than the $20.33 billion recorded in the comparable period in 2022.
Of the personal remittances from OFs, cash remittances coursed through banks amounted to $2.99 billion in July 2023, up by 2.6 percent than the $2.92 billion posted in the same month last year.
The expansion in cash remittances in July 2023 was due to the growth in receipts from land- and sea-based workers.
On a year-to-date basis, cash remittances reached $18.79 billion, a 2.9 percent increase from $18.26 billion registered in the same period last year.
The growth in cash remittances from the US, Singapore, Saudi Arabia, and United Arab Emirates contributed mainly to the increase in remittances in the first seven months of 2023.
Meanwhile, in terms of country sources, the US posted the highest share of overall remittances during the period, followed by Singapore, Saudi Arabia, and Japan.
