July 28, 2015
Remittances to Philippines slowing, figures show
Remittance payments to the Philippines are beginning to slow down, a development which is likely to create pressure on the domestic economy, according to analysis by the Financial Times.The FT reports that in 2014, remittances from Filipino workers overseas were worth US$24.3 billion, around 10% of the country’s GDP. Growth on the previous year stood at 5.9%, the lowest for five years.
This is linked partly to changes in the employment market in the US, where around 3.5 million Filipino emigrants live. Remittance payments from the US accounted for just under half of all remittances in 2008; this is now down to 42.6%.
The slowdown in money sent home from the US is partly offset by increased opportunities in the Middle East and Asia; but, the FT notes, “remittances per worker in the US are about double those from the Middle East and Asia. If the shift from west to east continues, it will pose a threat to overall volumes and, potentially, to consumer spending and economic growth at home.”
The FT writes that the growth in the Philippines’ business services sector, including call centers, may also mean that fewer workers chose to look for employment overseas.
IZA World of Labor author Catalina Amuedo-Dorantes has written about the benefits of remittances for developing economies. She writes that: “The main challenges remain how best to assess the impacts of remittances and how to design policies that facilitate the transmission and productive use of remittance flows while taking into account the idiosyncrasies of each country. Possible policies range from easing capital controls to reforming immigration policy.”
Read the Financial Times article here.
The good and bad in remittance flows by Catalina Amuedo-Dorantes
Migration and families left behind by Sylvie Démurger
Read more articles about migration here