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Item Restricted 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.Item Restricted Analysis of Philippine remittances flow using country-level COVID-19 government responses(2022-01) Hanapin, Ashley Khay; Orano, Mark JucelThis 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.Item Restricted The impact of adverse weather conditions and financial development on remittances(2017-12-18) Redelicia, Rose Margaret G. ; Tiu, Ellaiza V. ; Mendoza, Adrian R.This study tests for the behavior of remittances in times of thin financial markets and extreme rainfall condition to determine whether remittances serve as insurance or investments. Given the assumption that migrant workers are altruistic, it is assumed that remittances would increase in times of extreme weather conditions and low levels of domestic credit. But contrary to the hypothesized results, migrants decrease their remittances in times of adverse weather conditions. Furthermore, there is a positive relationship between financial development and remittances. These results are in favor of the investment motive of remittances. However, the positive relationship with the foreign exchange rate, inflation rate, and unemployment rate and the negative relationship with the interest rate suggest otherwise. They still seem to support the initial hypothesis that migrant workers remit altruistically, seeking to meet their families’ lack of disposable income and domestic credit. Evidently, migrant motives for remittances cannot be solely for insurance or investment. As presented in the model, both play into consideration.Item Restricted Impact of remittances on financial inclusion in the Philippine context(2018-06) Cacnio, Bianca Patricia C. ; Magtoto, Sofia Q. ; Escresa, Laarni C.This paper contributes to the literature on financial inclusion in the Philippines by investigating the impact of remittances. The Philippines is the third highest remittance receiving country in the world, with an inflow of around $28B in 2015, and $31B in 2017. Using individual-level cross-sectional survey data from the National Baseline Survey on Financial Inclusion of 2015 and controlling for various socio-demographic characteristics, the use of key financial services, mainly savings, credit, and insurance, by individuals is examined to see if this is affected by receiving remittances. It is found that remittances have a positive effect on the use of financial services in general, though this impact is most significant in savings and a bit less so in insurance. The effect of remittances on borrowing is not found to be significant. The results of this study may provide useful inputs and information for future policy and strategies for broader financial inclusion.Item Restricted An application of the balance of payments constrained growth model to the Philippine economy(2017-02-22) Diaz, Edward A. ; Medalla, Julian C; Debuque-Gonzales, MargaritaThis paper applied the balance-of-payments (BOP) constrained growth model to analyze the economic growth of the Philippines using time series data from 1960-2015. The researchers used the ordinary least square method to test the relationship between actual growth rates and those predicted by Thirlwall‘s Law. Aside from using the first generation model of Robert Thirlwall, a modified version was also used to incorporate the impact of remittances of the overseas Filipino workers. The period under study was also divided into subperiods based on the significant shifts toward trade liberalization. Using data from the BOP and national income accounts, the results of the study indicate that the Philippine economy is BOP-constrained for the entire period as well as for five out of the ten subperiods. From a policy stand point, the results suggest that policies that strengthen exports of goods and services, remittances and foreign direct investments continue to be well advised for they relax the BOP constraint.Item Restricted Determinants of stock market development: are remittances from OFWs a factor?(2013-10) Advincula, Rammarius Markus B.; Guerrero, Jo Beatriz L.; Debuque-Gonzales, MargaritaThis paper seeks to determine whether or not overseas Filipino workers' remittances drive the stock market development. Using quarterly data from 1998-2012, we regressed stock market capitalization, a proxy of stock market development, on remittances and six macroeconomic variables. Cointegration regression showed that remittances indeed have a significantly positive relationship with stock market development. In line with the literature, income level, savings, private foreign direct investment and market liquidity are also positively related to the development of the stock market. Bank development however exhibits negative relationship. Inflation, meanwhile, is not significant.Item Restricted The impact of remittances on household tobacco and alcohol expenditures(2013-04) Del Mundo, Timyas L.; Mercado, Ronald Joseph Jr. G.Throughout the years, OFW remittances continue to be an integral factor of the Philippine economy. More and more Filipinos seek to live and work abroad to help their respective families who remain in the country. On the other hand, high numbers of smokers and drinkers in the Philippines' adult population remain significant. This results in the alarming percentages of smoking illnesses an alcohol use disorders of Filipinos. Now, with the recent passing of the Sin Tax bill, people are starting to recognize the importance of alcohol and tobacco and the significance of studies on these commodities. This study aims to see the impact of remittances on tobacco and alcohol use in Philippine households. By using Family Income and Expenditure Survey 2009 data, the authors regressed budget shares on the presence of remittances using OLS and Quantile Regression. Both estimation methods have shown that remittance-receiving households spend a smaller share on tobacco and alcohol than non-remittance receiving households. Policy recommendations target families with characteristics such as households with more adults, more employed members, heads of family that are male and young and, among those receiving remittances, households with high total expenditure because they tend to spend more on alcohol and tobacco.Item Restricted Impact of overseas Filipino workers' remittances on crimes against property: the case of the Philippines(2013-10) Villanueva, Liel; Hernandez, CeejayThis study aims to work on the effects of OFW remittances on crimes against property in the Philippines. Other socioeconomic variables such as unemployment rate and gross regional domestic product and crime deterrence factors were included as suggested by related literature. Data on crime was divided into two due to the change in the recording system of the Philippine National Police at 2009. Results showed that OFW remittances and number of OFWs are significant only during 2009-20012 but not in 2001-2008. Thus, as remittances increases, it is becoming more important in the assessment of factors affecting crime. However, the study can be furthered if more time periods can be included wherein the new recording system of PNP was implemented.Item Restricted Banking on remittances: an analysis on the causality of the savings behavior of remittance receiving households(2012-10) Magsino, Josemaria Carlo Faner; Solon, Orville Jose C.The aim of this paper is to analyze the Overseas Filipino Workers' recipients' savings activity after their income has been augmented by their cash receipts from their relatives abroad. OFW s compose around 10% of the whole Philippine population, and they have been considered as the Philippines' modem day heroes because of their contribution to the stimulation of the economy. It is also crucial to analyze the relationship of these remittances with bank activities since these savings, in the form of bank deposits can help bring the economy back to its stable state during bad times, as in shocks, which is already a prevalent trend in the international scene; as well as the effects of deposits on stimulating economic growth through the multiplier effect. Using a Heckman Two-Stage model and the dataset from the Annual Poverty Indicator Survey (APIS) 2010, this study found out that remittance increases both the likelihood and the actual value of money being deposited in banks. While some other factors, such as sex of head of household and family size, deter the amount that will be saved. From the study, there has been no significant relationship garnered from the regional and geographical location of the household.Item Restricted 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, ChristinaThe 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.