Effects of exchange rate shocks and unemployment on Philippine household consumption
Date
2012-03
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Abstract
Overseas Filipino workers (OFW's) support their families in the Philippines through remittances. Regions where overseas Filipinos work experience exchange rate changes that affect the amount of received remittances ·of the Philippine households. Appreciation of foreign currencies against the Philippine peso led to increased remittance from overseas during the 1997 Asian Financial Crisis. These positive income shocks increased household human capital investment. (Yang, 2005) This paper will examine the impacts of similar exchange rate shocks experienced during the last decade, alongside unemployment, to the consumption spending of households. Do positive income shocks have a significant effect on consumption?