Expat money has fueled the Philippines’ strong economic development. Remittance flows into the Philippines have such a large influence on the economy that economists and investors carefully examine them.
More than 10 million Filipinos work abroad, aided by their English language abilities. Many are in the United States and the Middle East.
According to the Bangko Sentral Ng Pilipinas, the country’s national bank, money transferred from foreign employees to family and relatives back home via banks totaled $24.34 billion in 2014, up 6% from the previous year.
This money, equivalent to about 10% of GDP, stimulates the economy by boosting spending. Consumer spending accounts for 70% of the Philippine economy, which grew at a pace of 6.1 percent last year, one of the fastest in Asia.
The Philippines considers its Expat community to be the country’s most valuable “export.” Overseas Filipino Workers send money to the Philippines through direct remittances to their family members in their home country. According to recent data from 2019, the Philippines is heavily reliant on remittances.
In this article, we will discuss how Filipino Expats are assisting the Philippines’ economy is growing. But first, let’s define an OFW.
Who is an OFW?
OFW stands for Overseas Filipino Worker, and it is a term used to describe Filipino migrant workers who work for a limited time outside of the Philippines.
OFWs are regarded as economic heroes in the Philippines due to their considerable contribution to their prosperity. OFWs who send / transfer money to the Philippines contribute to the country’s economic development.
Impact of the Philippines on the Philippine Economy
OFWs are one of the world’s largest groups of overseas workers. Despite being a tiny country in terms of land and population, the Philippines ranks third in inward remittances from across the world compared to several of its neighbors.
Only India and China are ahead of it in this regard. The Philippines has somewhat more than 100 million people, with over 5 million workings in other countries.
While OFWs have typically preferred the United States and the Middle East, recent trends have revealed a preference for Scandinavia and Canada, owing to their higher lifestyle index.
Expats’ Economic Contributions
The influence of remittances on the Philippine economy extends beyond GDP figures. Remittances from overseas workers have made a major contribution to the country’s foreign exchange revenues.
As a result, these remittances have helped enhance the country’s balance of payments situation, boosting the current account surplus. Incoming remittances supplement the recipient households’ total income. It increases the disposable income if the household already has a source of domestic revenue. Household consumption grows as income rises.
This proceeds in several ways, starting with fundamental requirements and progressing to a better consumption basket of food, clothes, recreation, and finally, some luxuries. There’s no doubting that the majority of families have seen a rise in their quality of life.
While OFWs make the money transfer to Philippines every month, their remittances influence their daily lives and the futures of their loved ones. It may be near impossible for some families living below the poverty line to pay off larger debts such as a mortgage, increased college fees, and so on.
Remittances from overseas workers are a lifeline. Because of remittances, OFW families may get adequate healthcare, make better lifestyle choices, and live more comfortably.
Millions of OFWs use ACE Money Transfer to send money to the Philippines so that their family may profit from their hard work.
When OFWs send money to the Philippines, they help bridge the gap between the rich and the poor by contributing to the development of a major segment. Consumption of goods and services rises as living circumstances improve and disposable income rises, propelling the economy.