For 2015, BSP reported that OFW cash remittances reached USD25.8B. For a better perspective, here’s the figure in Philippine Peso: 1,172,453,000,000.
Yes, 13 figures. Yes more than 1 Trillion pesoses. Note that these are just cash remittances, or those that were coursed through banks.
Another figure reported by BSP on personal remittances, posts the figure at a much higher PHP1,296,037,000,000. In 2015, it was reported that there are around 1.8 million OFWs around the globe. With that, we can peg the average remittance at PHP651,000 per OFW. Annually.
These are mind boggling figures, with lots of zeroes, lots of money. Graph below shows historical levels of OFW remittances. The figures just keep on rising. Up to when, we don’t know. If this stops, who knows where the Philippine economy will end up.
Despite these numbers, it makes me wonder, where did all the money go?
There’s a saying strike while the iron is hot. It didn’t say spend while the iron is hot.
As they say, the OFW remittances (and BPO industry) are the key drivers of our economy nowadays. Nothing wrong with that on a macro perspective, but on a micro level, we just wish that such sums of money were used to improve the lives of our countrymen, on a sustainable level. Not on a temporary enjoyment basis.
The OFW remittances are meant to make the lives of our countrymen richer, and not to make those already rich (tycoons) much richer. Our economy is pretty much consumption driven, not via exports of manufacturing, but domestic consumption. Which means we like to spend. So with that sum of OFW remittances, I just wish it was able to make the lives of ordinary Juans richer, not through more appliances and gadgets, more shopping and fancy lifestyle, but through well thought of investments, and better yet businesses.
House and lot, a small farm perhaps, piggery, some tricycles or taxi investments perhaps? Franchised businesses? Insurance for your kids, investments in stocks and mutual funds? Some sources of passive income? Money making more money? Better right?
We’ve been harping on the relatives of our OFWs, for them to learn how to invest and manage their finances properly (click here for related article). A recent article also came out where Suze Orman, a personal finance advocate, warns OFW families not to rely on remittances forever. And we better take heed. We got warned.
Case in point is the dropping oil prices, and the increasing lay-offs in the Middle East. News reports showed that some of our OFWs have endured months without salaries, hence no remittances. I just wish the families back here were able to save up for the rainy days, that despite the cessation of remittances (and possible repatriation), families here can absorb the temporary setback.
Bottomline, I just wish the whopping amount of remittances were used properly, saved, invested, used to create more money, and not just spent. Take advantage of this cash inflow now, wisely, because in remittances and income, walang forever.
Save up for the rainy days, invest. Click here for our beginner’s guide on investments.
Subscribe to our FREE email feed to get regular updates.
From BSP website
From Manila Bulletin
Philippine Map photo from Can Stock Photo