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Subject: OFW remittances ×

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Now showing 1 - 9 of 9
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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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    Where do remittances go? a comparative analysis on the inflows of remittance and the expenditure behavior of PH households during 2003 and 2021
    (2023-07-11) Aguila, Liane Diane L.; Cabatay, Hannah Jo Marie C.; Alburo, Florian A.
    The number of Overseas Filipino Workers (OFWs) has steadily increased since the 1950s. Remittances sent back to families at home have not only shielded the country from economic downturns but have also benefited households in financing their necessities. This study analyzes the relationship between remittances and household expenditure behavior during an almost two-decade period by looking at the effect of remittance in the expenditure share of the following items: food, food eaten at home, food eaten outside, health, education, occasion, recreation, and transportation and communication, using the FIES 2003 and 2021 dataset from the Philippine Statistics Authority. The Working-Leser Model was used wherein three (3) econometric techniques were performed to address endogeneity, heteroskedasticity, and the presence of zero values—Instrumental Variables Estimation using Two-Stage Least-Squares Regression, Quantile Regression, and Censored Tobit Analysis, respectively. All three techniques revealed consistent findings that remittances have positive significant effects on food eaten outside, health, and education expenditures, while there are negative significant effects on food and food eaten at home during both 2003 and 2021. The other expenditures show varying results in terms of sign and significance. Further, results show that there is stability in the expenditure behavior of households receiving remittances in terms of education, occasion, and recreation; that is, the effect of remittance is not significantly different in 2003 and 2021. This can be explained by the similar shocks during those years.
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    Evaluating the major determinants of the growth in OFW remittances
    (2006-04) Apos, Ria Liza Lou E.; Mungcal, Marion Joyce C.; Bautista, Ma. Socorro G.
    This study looks at the three major determinants of the growth in OFW remittances, namely, the increased number of deployed Filipino workers categorized as either supply-side push factor or demand-side pull factor, deployment of higher-paid skilled and professional Filipino workers, and the greater access of OFW s to remittance channels of the Philippines. Examining the trends of these factors gives conclusions on how they affect the growing OFW remittances.
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    Factors affecting the manner of sending remittances home
    (2009-04) Anabo, Michael Patrick; Manzano, Katrina Ross; Pernia, Ernesto
    Remittances have been a popular topic because of their significant contribution to the development of Third World countries like the Philippines. However, previous studies have failed to consider the importance of the manner of sending these remittances. This study aims to examine the socio-demographic characteristics of OFWs that affect their choice of remittance mode. Not only is this study geared towards facilitating the shift from formal to informal modes but also in promoting the use of banks. Through logistical regression analysis, education is shown to have a significant influence in choosing banks over other modes. Moreover, OFW's region of origin seems to matter. Further, other factors such as age, length of stay abroad, occupation and country of destination appear to be important as well.
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    Determinants of the remittances of Filipino overseas contract workers
    (1985-03-15) Sevilla, Velntin Ernest N.; Ang, Danilo G.
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    The contribution of OFW remittances to income inequality: a decomposition analysis
    (2003-03) Ravanilla, Nico M.; Robleza, Eduard Joseph P.
    The paper aimed to determine whether remittances from overseas Filipino workers improved or worsened income inequality. Using decomposition equations, the paper divided total inequality into its four components, namely wages, entrepreneurial incomes, other income, and remittances from migrants. The decomposition exercise revealed that the contribution of remittances to overall income inequality depended on their share in total income, their distribution among the population, and their correlation with total income. Remittances were found to accrue mostly to higher-income classes, but they were found to be gradually becoming less inequality-increasing over time. Therefore, policies that would aim to reduce income inequality should consider making migration- facilitating factors more accessible to those in the lower ends of the distribution, because remittances would only tend to contribute less to income inequality if the lower-income brackets were also able to migrate. Finally, further studies should look into the implications of the changes in inequality, especially with regards, to welfare.
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    The determinants of overseas Filipino workers' remittances: a comparison between macroeconomic and non-macroeconomic factors
    (2008-03) Bondoc, Mariel Angelica M.; Ovejera, Kim M.
    This paper investigates the different determinants of Overseas Filipino Workers' remittances. An existing model utilized in Latin American countries is employed to test the relevance of macroeconomic variables to remittances. Results show that remittances can only be partly explained by macroeconomic flows. This paper then discusses the seasonality and consumption behavior of recipient families as alternative explanation of the remittance behavior. Price indices of different commodities are utilized to capture consumption patterns of recipient households. Dummy variables for each quarter are used to ascertain seasonality of remittances. Results show that consumption patterns for some commodities correlate with remittances. Furthermore, results verify the seasonal trend of remittances.
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    The effect of relative inequality on the Filipino household's spending of international remittances for human capital development
    (2009-11) Camagay, Daniel Caferino; Samson, Camille
    This study explores the impact of international remittances on the Filipino household's consumption of pre-selected expenditure groups with a focus on spending in human capital development, i.e. education and health care. In addition, since relative deprivation has been found to increase the tendency of a household member to migrate, its role as a driver of human capital spending is looked into as well. The relative inequality of a household is estimated using .. three measures: relative income position, regional Gini coefficients and regional poverty incidence. Since each expenditure item is measured as a share in total household budget, the relative change in each share induced by remittance income is accounted for with respect to changes in the other expenditure shares of the same household due to the same flow of remittance income. The Seemingly Unrelated Regression model allows us to do this. Results yield that there is empirical evidence to conclude that it is the household's experienced relative inequality that motivates greater spending in human capital development per unit of remittance income received.
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    What is the effect of OFW remittances on the Philippine peso in 2005-2010?
    (2010-10-08) Velasco, Ma. Monina D.R; Timbang, Michael O.
    With the extensive integration of the Philippine labor market to that of the international arena, it is but natural that a continuation, if not a sudden acceleration in the level of OFW remittances is to be absorbed by the Philippine economy. The goal of the study is to prove that the further increase in the remittance receipt, given the ,; continuous emigration, significantly causes the recent trend of peso appreciation. Current trend depicts of the sharp appreciation of several Asian currencies since 2004, especially in the case of the Philippine peso which recorded increasing value vis-a-vis the US dollar only in December 2005 yet, even then, it had the fastest appreciation during the period 2005-2007. Subsequently, country receipt has been averaging over US$1 billion every month since 2005. With such, remittances are presumed to have positive impact on the current account: they increase national income by accumulating foreign exchange and raising national savings and investment as well as by providing hard currency to finance imports resulting to a probable current account surplus. A country in current account surplus must experience a currency appreciation to induce domestic residents to acquire additional foreign assets. With the interaction of these remittances with other aggregates comprising the Balance of Payments (i.e, net exports, foreign direct investment and net portfolio investment), however, results vary. After an OLS-regression was conducted, two conclusions are of importance: (1) OFW remittances, as a part of the current account, are statistically significant in determining the nominal exchange rate; and (2) The current account supersedes the effects of the capital account in determining the equilibrium exchange rate. The empirical groundwork provided, make evident the strong link between a stable and competitive Philippine peso and a sustained influx of OFW remittances. Consistent with the Balance of Payments approach, the sustainability of remittance inflow to the country increases the foreign currency held by the economy driving the demand for peso to rise relative to the US dollar, cutting down the nominal exchange rate thereby leading to the peso appreciation.