The remittances of some two million overseas Filipinos have steadily declined since its peak more than 20 years ago, based on data obtained from the World Bank.
Also, its impact as an important economic driver is seen diminishing over time as a result, the World Bank and other experts said. In the Philippines, the remittances help feed the consumption activities of households and an acknowledged growth driver of the USD404-billion southeast Asian economy.
According to data, the foreign currency earnings of overseas Filipinos equaled 10 percent of local output measured as the gross domestic product (GDP) in 2006. The data show that as fraction of GDP, the remittances of overseas Filipinos has since steadily fallen to only 8 percent of GDP in 2022. Five years later, in 2011, the remittances equaled only 8.6 percent of GDP and only 8.4 percent of GDP in 2026. By 2021 and again in 2022, the remittances equaled only eight percent of GDP.
At its peak of 10 percent of GDP in 2006, the exchange rate of the local currency the peso averaged P46.713 per US dollar, weaker than previous year’s exchange rate of P46.562 per dollar and P46.184 per dollar in 2004. The exchange rate would plumb the depths of despair in January 2008 when this bottomed at P40.29 per US dollar when then President Gloria Macapagal Arroyo held sway over the economy.
Experts have since said the foreign currency earnings of its citizens plan an important role in emerging economies like the Philippines. In certain countries in Central America and the Caribbean, such inflows prove in excess of 20 percent of GDP. Also, analysts at Standard and Poor’s have calculated that remittances flowing toward emerging economies has doubled over the past 20 years to 1.6 percent of GDP.
In the Philippines, cash remittances have risen at an annual clip of 2 6 percent to USD2.91 billion in September this year from only USD2.84 billion a year earlier.
According to the BSP, the remittances were boosted by higher receipts from land- and sea-based workers who remitted their earnings back to the Philippines through banks.
