It was a similar picture in previous years. In 2005, the average remittances of Filipino migrant workers added up to more than half of the national budget, reaching an average of US.5 billion or R476.5 billion a year.
THIS year, the Bangko Sentral reports that OFW remittances will set a new high of .8 billion. This demonstrates the reality that our Filipino workers abroad, by and large, sustain the Philippine economy.
Our more than eight million Filipinos working abroad also provide the country’s largest source of foreign exchange. However, the common case is that OFW money being sent into the country goes into consumer spending.
Imagine what this significant sum of money can do for our economy if it would be used for investment purposes.
Long-term investment options must be made available to OFWs. Innovative uses for the remittances must be presented to them, instead of letting these precious funds all go into short term spending.
Special instruments must be made so that remittances will be translated into economic gains for the country. For instance, some investment instruments can be fashioned to suit the needs of local communities from which the OFWs come from. It can be a municipal bond of five or ten thousand up to 100,000 denomination, with fixed interest rate, where payment can be guaranteed by LGUs against their IRA share.
Another challenge is to create a system through which remittances could be transferred inexpensively, while ensuring the protection of the OFWs’ hard-earned money. Right now, the cost of remittance is very prohibitive.
It costs about - to remit money from the US and Saudi Arabia. But competition, thankfully, is getting keener since mobile phone companies began entering the field.
Once fully harnessed, remittances can become a substantial tool to spur local economies – build public markets, water systems, bus stations, and farm-to-market roads.
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