Metro Manila (CNN Philippines) — The sacrifices made by overseas Filipino workers (OFWs) are difficult to put into words. Seeking employment abroad, they leave behind what they know and cherish in pursuit of new opportunities overseas. Their selflessness benefits both their loved ones and all Filipinos. The money they send back to support their families in the Philippines, known as remittances, not only support millions of households, but also are a driving force of the Philippine economy.
In fact, this past June, remittance payments reached a new six-month high. As the global economy recovers in a post-pandemic world, Filipinos are feeling the impact at home. Cash remittances sent back by OFWs rose by 2.1% to USD 2.81 billion in June. This trumps last June’s payments, which reached a total of USD 2.75 billion.
Remittances have steadily morphed into a driving force of the nation’ s economy. In 2020, remittances accounted for 9.2% of the nation’s GDP. In 2022, remittances sent home to the Philippines by OFWs reached a record-high total of $36.14 billion—accounting for nearly 9% of the nation’s overall GDP and 8.4% of the gross national income. The Bangko Sentral ng Pilipinas (BSP) estimates that remittances will increase by 3% in 2023 for another record-high year.
A recent study confirms that the U.S. is by far the largest source of remittance payments back to the Philippines. In 2021, payments sent from income earned in the U.S. accounted for over 41% of all remittances sent to the Philippines. In particular, the U.S. healthcare sector is a powerhouse in this space. OFWs take on a diverse range of jobs, but remittances are particularly driven by healthcare workers. The Philippines remains the largest supplier of nurses internationally. As a result, international healthcare employment benefits individual families, while simultaneously stimulating the broader domestic economy.
Remittances, sent back to loved ones, are spent in the Philippines, and power our nation’s consumption-driven economy. Remittances provide a stable income stream for millions—giving them the resources to buy goods, invest in education, alleviate poverty, and increase savings. A 2021 report published by the BSP found that 96% of households spend remittance payments on everyday households needs, 50.5% spend on education and 45.8% put them towards medical expenses. In short, remittance payments touch just about every facet of our economy.
In fact, in 2022, as remittances hit an all-time high, the economy grew by 7.6%—the fastest rate since 1976. Increased spending leads to increased value-added taxes collected by the government. At Davos 2023, President Ferdinand Marcos Jr. remarked that remittance payments from overseas workers were a stronghold of the Philippine economy, defending against recessionary forces for the good of citizens nationwide.
OFWs are often referred to as “modern day heroes,” and with good reason. These workers sacrifice not only for their families, but for the betterment of all Filipinos. It is difficult to overstate the impact that remittance payments have on the larger economy. As such, any forthcoming labor legislation must foster an environment conducive to robust remittance payments. Administrative red tape should be removed, increasing the ease with which OFWs can remit their earnings back home.
Remittances play a vital role in our domestic economy, and in an increasingly globalized world, they are all but certain to become even more of an economic engine. Filipinos must come together to collectively acknowledge that OFWs are undoubtedly the champions of the Filipino households as well as the Philippine economy.
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