Overseas remittances bypass Philippines poor, says ADB

Posted: 11:58 AM
Sept. 13, 2005
Agence France-Presse
Inq7.net
http://money.inq7.net/breakingnews/view_breakingnews.php?yyyy=2005&mon=09&dd=13&file=17

BILLIONS of dollars of cash transfers from the Philippines' huge overseas work force have largely bypassed the Southeast Asian nation's poor, according to the Asian Development Bank (ADB).

While the money has boosted personal consumption, the main driver of its economy, the overall impact is patchy, with more prosperous areas of the country and higher-income families receiving the lion's share, it said.

"The poorer segment of Philippine society has been largely excluded from the opportunities provided by migration, and OFWs (overseas Filipino workers) tend to come from less poor regions," the Manila-based lender said in a report.

The Philippines central bank says around eight million overseas Filipinos -- nearly a 10th of the population -- will send home 9.4 billion dollars this year via formal banking channels, up 10 percent from last year's levels.

The country is the third highest recipient of remittances, behind Mexico and India.

The ADB, however, estimates that the actual level of remittances will be about three times the official amount, with overseas workers using other, informal means of transfer.

It found that despite sustained GDP growth in the four years to 2003, real average family incomes in the Philippines have fallen 10 percent, with the total income of the poorest 10th of the population having stagnated.

About 44.1 percent of Filipinos earned no more than a dollar a day in 2003.

"While a significant proportion of families report that income from abroad is their main source of income, these families are mainly based in urban areas," the report said.

"Furthermore, families from higher income groups tend to receive larger proportions of income from abroad than lower income groups."

Provinces with the highest levels of poverty, particularly in the rebellion-torn southern island of Mindanao, have the lowest proportion of overseas workers.

"Poverty remains a significant challenge in the Philippines, and it is a challenge that continues to grow," said Shamshad Akhtar, head of the ADB's Southeast Asia department.

"The number of poor Filipinos is increasing," she said, owing to the rapid 2.36 percent population growth rate, and "rural poverty has proven to be particularly intractable".