What is the importance of remittances in the Philippines?

Since the country’s debts are mostly in US dollars, a stronger peso will minimize the debt. The Philippine Peso gets stronger with higher OFW remittances, which means it is worth more relative to other currencies. The steady inflow of remittances empowers the country to buy more foreign goods and services.

How does remittances help the economy in the Philippines?

Results of the analysis show that remittances have a positive significant effect on the Philippine economy in the long run. This translates to a 0.018\% increase in the economy’s gross domestic product when the remittances sent by overseas workers to the Philippines increases by 1\%.

What is the rank of the Philippines as regards remittances from overseas?

The Philippines ranks third after India and China as major recipients of remittances. In 2016, the country received US $26.9 billion in money transfers, according to the Central Bank of the Philippines.

What are the positive impacts of the labor export policy to the Philippines?

The benefits of labour export policies are well known – high foreign exchange reserves, positive balance of payments, education and small scale enterprises by families receiving remittances, and improved knowledge and skills by OFWs returning home.

How does OFW remittances affect economy?

“Continued growth in OFW remittances would support recovery in consumer spending, which accounts for nearly 70 percent of the economy, as well as supporting recovery of the country’s GDP (gross domestic product), as consistently seen in 2Q (second quarter) 2021,” he said.

How does the government benefit from remittances?

Remittances can improve the well-being of family members left behind and boost the economies of receiving countries. They can also create a culture of dependency in the receiving country, lowering labor force participation, promoting conspicuous consumption, and slowing economic growth.