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Start date: 2020 × Subject: remittances ×

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Now showing 1 - 5 of 5
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    OFW remittances and real effective exchange rates: evidence from the Philippines 2000-2020
    (2022-12) Pascual, Mark Joseph M.; Seno, Samantha; Alburo, Florian A.
    Migrant remittances augment most of developing countries’ external funding contributing to their economic growth, including the Philippines. The consistently massive inflows each year have revealed their increasing importance to households and the macro economy; however, some studies have warned of their undesirable effects in the foreign exchange market. Specifically, an increase in remittances ends to increase the real exchange rate and encourage a real currency appreciation that negatively affects trade balance. This paper examines the impact of remittances on the real effective exchange rate (REER) index of the Philippines from 2000 to 2020, along with trade variables like exports, imports, and foreign direct investment (FDI) that traditionally influence the foreign exchange market. After a logarithmic transformation and using multiple linear regression, this paper empirically validates that remittances can independently cause an appreciation and overvaluation of the peso. However, this is canceled out by the effect of imports as it depreciates the peso by almost the same magnitude. The opposing effects of remittances and trade on the economy depend on their respective degrees of over/undervaluation of the currency.
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    Analysis of Philippine remittances flow using country-level COVID-19 government responses
    (2022-01) Hanapin, Ashley Khay; Orano, Mark Jucel
    This study provides a new approach to analyzing Philippine remittances flow by using the COVID-19 government responses of both the Philippines and source countries in lieu of traditional determinants of remittances, which reflect migrant workers’ altruism. This study examines whether such an approach provides a reliable explanation consistent with the altruism hypothesis and whether COVID- 19 government responses can be effective substitutes to the traditional determinants of remittances when a pandemic shock takes place. To represent COVID-19 government responses, the study utilizes four COVID-19 indices for the Philippines and each of the 11 sample source countries constructed from the Oxford COVID-19 Government Response Tracker data. The study employs Ordinary Least Squares (OLS) Regression to determine the relationship between remittances and COVID-19 government responses. The study utilizes one regression model for remittances and source country COVID-19 indices and another model for remittances and home country COVID-19 indices. To test the validity of these COVID-19 response-based specifications, the study examines how well they fare in econometric terms based on the OLS regressions. The results reveal that the first and second models are 65.91 percent and 38.64 percent accurate, respectively, in demonstrating the hypothesized effect of COVID-19 government responses on remittances. The study shows that when source and home country COVID-19 indices are less synchronized, the hypothesized effects become more prominent with the right signs and are statistically significant.
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    Flight turbulence: a time-series analysis on the influence of Philippine labor migration on economic growth
    (2020-12-22) Rellosa, Reena Francesca DL; Shin, Stephanie Anne C.; Epetia, Christina
    The economic impacts of labor mobility on countries of origin is an ongoing debate. Particularly in the Philippines, human capital flight has been increasingly seen as a means to escape unemployment concerns. This study aims to determine the influence that high skilled and low skilled migration has on the Philippines’s economic growth and what it may imply for the country’s economy. Using existing data gathered by the Commission on Filipino Overseas, the researchers identified the number of registered Filipino emigrants from 1988 to 2018 and segregated them into either high or low skilled workers based on their educational attainment prior to deployment. Multiple Linear regression was then employed to establish the relationship between the explanatory variables and economic growth rate. Time series analysis is used to capture years of observation which could further aid in explaining how these factors can affect the economy. The results revealed that contrary to global studies, there is a positive association between the migration of highly skilled workers and the rate of economic growth, while results for low skilled migration showed a negative association with economic growth. Findings imply that high skilled emigration contributes to encouraging the youth to pursue higher education, increasing employment opportunities for domestic laborers, and stimulating consumption activities of the migrants’ families through remittances. The deployment of low skilled workers, however, imply that the country may experience a shortage of low skilled labor supply in the short run, thus resulting in a fall of the Philippine economic growth rate.
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    Differential effects of remittances and domestic income on household expenditure shares: evidence from the 2023 FIES and LFS
    (2026-01-06) Adan, Alexandria Loreine S.; Go, Edrea Beatriz O.; Solon, Orville Jose C.
    This study examines whether Filipino households treat remittance income differently than domestic income across eight expenditure categories. The analysis is framed using the Mental Accounting Theory (Thaler, 1990) and Liquidity Constraint Models (Deaton, 1991; Carrol, 1997), where remittances are treated as a distinct, non-fungible source of income to test the differential effects of remittance and domestic income on household expenditure shares. Using a merged dataset of the 2023 Labor Force Survey (LFS) and Family Income and Expenditure Survey (FIES), a Seemingly Unrelated Regression (SUR) model estimated the differential effects of remittance income and domestic income on expenditure shares. The study observed distinct differences in how households allocate remittances compared to domestic income: both income sources reduce food and drink expenditure shares, but remittances exhibit a significantly larger reduction of Php 2.22 per 10,000,000 Php compared to Php 0.72 per 10,000,000 Php for domestic income. Remittances also demonstrated larger positive effects on investment-oriented categories including education and recreation (+Php 9.48 per Php 10,000,000), housing (+Php 3.88 per Php 10,000,000), and health (+Php 2.14 per Php 10,000,00), compared with smaller effects from domestic income. These patterns indicate that households channel remittances toward long-term investments and lumpy expenditures, reinforcing the role of remittances in enhancing household welfare and underscoring the need for policies that encourage productive investments beyond immediate consumption.
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    Remittances, communication, and the economic well-being of the left-behind older parents of OFW children: a mediation analysis
    (2026-01-05) Beriso, Gilxander; Patente, Danna; Jandoc, Karl Robert L.
    "This study investigates the impact of labor migration on the economic well-being of left-behind older parents in the Philippines, focusing on the mediating roles of financial support and communication. Using data from the 2018 Longitudinal Study of Ageing and Health in the Philippines (LSAHP), mediation analysis was applied using the inverse odds ratio weighting (IORW) approach to decompose the total effect of having a migrant child into direct effects and indirect effects through monthly financial support and communication frequency. Economic well-being is assessed through five indicators including food insecurity, asset ownership, access to utilities, dependence on social safety nets, and perceived life satisfaction. The results show that having a migrant child significantly improves the economic status of older parents, primarily through increased financial support. Mediation analysis reveals that financial support is the dominant pathway, significantly reducing food insecurity and increasing asset ownership. While communication status has a modest impact on material outcomes, it plays a distinct role in enhancing perceived life satisfaction and facilitating utilities access. Notably, neither mediator significantly accounts for the parents' dependence on government social safety nets. The findings suggest that while remittances address material needs, communication serves as a non-monetary channel for emotional well-being and household decision-making."