Remittances exceed poor household earnings by 2.5 times

A new report by UniTeller on low-income adults in the Philippines reveals the value of monthly remittances from family and friends working abroad averaging more than 2.5 times the monthly income of recipients.

The report, titled Both Sides of the Coin: The Receiver’s Story, is the first instalment of UniTeller’s research into the behaviour and attitude of low-income remittance recipients in the Philippines, India, Indonesia and Vietnam regularly receiving money from senders in Hong Kong, Singapore and the United States.

It finds the average monthly remittance value sent back by low-income overseas Filipino migrants is $446, compared to their receiver’s average monthly household income of $175. The Philippines is the fourth largest remittance destination in the world with $34 billion of inflows in 2018. According to the Bangko Sentral ng Pilipinas (Central Bank of the Philippines), personal remittances from overseas Filipinos reached a high of $2.9 billion in August 2019 and personal remittances for the first eight months of 2019 were estimated to be some $22 billion.

Alberto Guerra, CEO UniTeller, said: “With global mobility increasing, remittances are playing a more important role in the livelihood of low-income families and communities. As the reliance on remittances grows, a key challenge is ensuring this income translates to building sustainable wealth.”

When it comes to who calls the shots on financial planning, 82 percent of receivers say they have the final say on how remittance funds are allocated. This suggests a considerable level of trust in the decision-making capabilities of the recipients. This view is supported by the survey result that 93 percent of recipients kept a close track of their savings and expenses.

Noel Cristal, UniTeller Philippines Country president, said: “As a global remittance company, it is important for us to go beyond data and to fully understand the behaviour and needs of both the senders and recipients of overseas transfers. Our report shows that the drivers and influencing factors for senders and recipients have shifted significantly as mobility has increased. These changes have been brought about by changes in mind-set, advancement in technology and even limitations within the local infrastructure.”