Remittances by overseas workers on the upswing

ASIAN WORKERS throughout the world contribute billions of dollars in remittances to their home country economies. After dipping for two years, it appears that remittances have stablized.

Remittances to low- and middle-income countries are on course to recover in 2017 after two consecutive years of decline, says the latest edition of the World Bank’s Migration and Development Brief, released Feb. 2.

Among major remittance recipients, India retains its top spot, with remittances expected to total $65 billion this year, followed by China ($63 billion), the Philippines ($33 billion), Mexico (a record $31 billion), and Nigeria (($22 billion).

TOP REMITTANCES

Overseas Filipino Workers. or OFWs, make up one of the largest group of expat workers in the world. OFW remittances still provide the growth that matters most in the lives of Filipinos. They go straight to households, to relatives, families and friends that use them to better their lives, to finance food, shelter, education and entrepreneurial pursuits. 

Money transfers from Filipinos working all over the world account for at least 10-percent of the Philippines’ GDP, the second largest source of foreign capital after value-added exports like electronic components, and a major source of private consumption which in turn accounts for 75-percent of the GDP.

The World Bank estimates that officially recorded remittances to developing countries are expected to grow by 4.8 percent to $450 billion for 2017. Global remittances, which include flows to high-income countries, are projected to grow by 3.9 percent to $596 billion.

The recovery in remittance flows is driven by relatively stronger growth in the European Union, Russian Federation, and the U.S. As a result, those regions likely to see the strongest growth in remittance inflows this year are Sub-Saharan Africa, Europe and Central Asia, and Latin America and the Caribbean. In the Gulf Cooperation Council (GCC) countries, fiscal tightening, due to low oil prices, and policies discouraging recruitment of foreign workers, will dampen remittance flows to East and South Asia.

In a special feature on forced and voluntary return migration, the Brief notes that the surge in refugees, asylum seekers and undocumented migrants arriving in Europe is slowing. Even as European countries grapple with refugee and migrant flows, low- and middle-income countries continue to host more than 90 percent of refugees.

The challenges of return and reintegration of migrants is highlighted in the report. Policies that promote voluntary return and successful reintegration in their home countries include: recognition of skills and qualifications acquired abroad; the possibility of securing a permanent residency in the host country; anti-discrimination and equal access programs in the countries of origin; and portability of social benefits.

"The fundamental drivers of the ongoing migration crisis - conflict, economic deprivation, demographic pressures and environmental change - need to be addressed. The World Bank is looking into policies and programs that will help tackle these issues,” said Michal Rutkowski, Senior Director of the Social Protection and Jobs Global Practice at the World Bank.

Remittances to the East Asia and Pacific region are expected to rebound by 4.4 percent to $128 billion in 2017, reversing a decline of 2.6 percent in 2016. Remittances to the Philippines continue to remain steady despite declining money sent home from Filipinos working in  Saudi Arabia. Remittances to Vietnam, largely from the United States, are also anticipated to recover this year, while flows to Indonesia will continue to shrink due to a government ban on female domestic workers to the Middle East. Growth in remittances to the region will be a modest 3.4 percent in 2018 to $132 billion.

Remittances growth to the South Asia region will be moderate at 1.1 percent to $112 billion this year, due to continuing impact of lower oil prices and ‘nationalization’ polices leading to constrained labor market conditions in the GCC. 

Remittances to India, the world’s largest remittance recipient, will grow by 4.2 percent in 2017 to $65 billion, following a decline of nine percent in 2016. Flows to Pakistan are expected to remain flat this year, while Sri Lanka, Bangladesh and Nepal will see a decline. Remittances to the region will grow by a weak 2.6 percent to $114 billion in 2018.