Remittances are one of the many dimensions of international migration that of late has
attracted a great deal of attention from academics, public officials, and the media. For one
thing, the magnitudes have increased sharply, at rates even faster than the departure of
migrant workers. For another, for many developing countries, remittances have begun to
significantly exceed foreign direct investment (FDI), capital market flows, or official
development assistance (ODA). Moreover, remittances are providing timely support to
otherwise shaky balance of payments and fiscal positions. Further, remittances appear to
contribute importantly to lifting households out of poverty, as well as benefit the wider
community through the multiplier effects of increased spending.
The Philippines is reputed to be the world’s third highest net remittance recipient
country (relative to net migration) after India and Mexico. In 2005, remittances were
officially recorded at $11.7 billion1 representing about 10% of GDP. Clearly, remittances
resulting from the Filipino diaspora have become a major factor in the economic and
social life of the country. This paper focuses on the home-country consequences of
remittances, addressing the question whether and to what extent remittances contribute to
poverty reduction and regional development in the Philippines.