The following blog entry is an excerpt from the World Economic Forum “How Migrants Who Send Money Home Have Become a Global Economic Force” (June 2018)
‘Padala’ (remittance) is a transfer of money by a foreign worker to an individual in their home country. These remittances have been recognized as an important developmental vehicle associated with migration. Since the 1990s, these financial remittance flows have steadily increased in volume. In 2017, migrants sent an estimated $466 billion to families in developing countries. Here’s the top seven facts you need to know:
- The Philippines shot to the no. 3 spot sending $29.9 billion, surpassing Mexico for remittances sent back home.
2. Remittances from Filipinos in the diaspora saved the Philippines from economic malaise during the last great economic recession (CIA Factbook, 2018). “The economy has been relatively resilient to global economic shocks due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, and the large remittances from about 10 million overseas Filipino workers and migrants.”
3. Remittance flows for migrant families can be economic lifelines at the individual and community levels. These remittances not only include ‘padala’ (financial remittances) but also these balikbayan boxes full of goodies sent to families back home. An estimated 800 million people worldwide are directly supported by remittances from relatives and loved ones abroad, according to the International Fund for Agricultural Development (IFAD). Remittances lift families out of poverty, improve health and nutrition conditions, increase education opportunities for children, improve housing and sanitation, promote entrepreneurship and reduce inequality.
4. Money sent home from abroad is shown to be more stable than both private debt and portfolio equity flows, and several times larger than any international development aid.
5. ‘Social remittances’, apart from financial remittances, contributed to the flow and positive exchange from migrants living abroad. Transnational communities also contribute by way of ‘social remittances’ – the flow of skills, knowledge, ideas and values that migrants send home. For example, the impact of social remittances was most strongly felt in areas such as education, health, employment, business and aspects of governance, found a study conducted by IOM in Tanzania in 2014. There is also a broader development effect, as the recipients of social remittances extend beyond the migrants’ immediate circle of relatives and friends to the wider community beyond.
6. Immigrants abroad bring positive effects and should address the overwhelmingly negative narrative about migration. We need to look at migrants as agents of change in their home countries who can contribute directly to human development at a grassroots level. The need to engage Diasporas effectively is becoming more and more expedient.
7. Financial and social remittances have an important role to play in the achievement of individual family goals, community and national development priorities. There is still work to be done but donations from the diaspora like the Bayanihan Foundation play a role in moving the needle for equity and sustainability locally and globally.