The Surprising Impact of Remittances on the Philippine Economy
16 December 2024
Discover how remittances fuel the Philippine economy beyond household support. From driving GDP growth and funding education to creating jobs and aiding disaster recovery, every dollar you send home plays a critical role in building a stronger, more resilient nation.
More Than Just Remit Money Transfer
For many Filipinos living and working abroad, sending money home is part of their monthly routine. Whether you’re sending support for family expenses, school fees, or emergencies, remittances often feel like a personal transaction—a small way to give back to loved ones.
But here’s the surprising truth: every dollar you send doesn’t just support your family. It fuels the Philippine economy in ways you might not expect. Recent data from the Bangko Sentral ng Pilipinas (BSP) shows that personal remittances from Overseas Filipinos (OFs) remain a key economic driver. In October 2024 alone, remittances reached US$3.42 billion, marking a 2.7% year-on-year (YoY) increase. Cumulatively, from January to October 2024, remittances hit US$31.5 billion, a solid 3.0% growth compared to the same period in 2023.
As we look ahead to 2025, remittance growth is projected to continue rising, further cementing its role in the country’s economic stability and development.
Let’s explore exactly how remittances—including those coming from Canada—impact the Philippine economy and why your contributions matter more than ever.
How Remittances Power the Philippine Economy
You might wonder: how remittance services work or how can money sent home by millions of Filipinos abroad make such a big impact?
Here’s how remittance services work or serve as a major economic pillar: · They Account for a Large Share of GDP: Remittances contribute over 10% of the Philippines’ Gross Domestic Product (GDP). This steady inflow of funds provides resilience to the country’s economy, especially during global financial downturns or crises. · They Support Consumption: The money sent back home is primarily used for daily needs, such as food, housing, education, and healthcare. This boosts local businesses, markets, and overall consumer spending. · They Drive Growth in Key Sectors: Remittances fund entrepreneurship, real estate, and investments in education—sectors that drive long-term economic progress.
In short, while you are thinking about the best ways to send money internationally, you might better realize that your monthly transfer contributes to something much bigger: economic stability, job creation, and progress for communities across the Philippines.
But here’s the surprising truth: every dollar you send doesn’t just support your family. It fuels the Philippine economy in ways you might not expect. Recent data from the Bangko Sentral ng Pilipinas (BSP) shows that personal remittances from Overseas Filipinos (OFs) remain a key economic driver. In October 2024 alone, remittances reached US$3.42 billion, marking a 2.7% year-on-year (YoY) increase. Cumulatively, from January to October 2024, remittances hit US$31.5 billion, a solid 3.0% growth compared to the same period in 2023.
As we look ahead to 2025, remittance growth is projected to continue rising, further cementing its role in the country’s economic stability and development.
Let’s explore exactly how remittances—including those coming from Canada—impact the Philippine economy and why your contributions matter more than ever.
2. How to Send Money From Canada to the Philippines: A Growing Contribution
Filipinos in Canada are among the most significant contributors to Philippine remittances. With over 900,000 Filipino immigrants and a growing second-generation population in Canada, the Filipino-Canadian community continues to play a vital role.
Here’s why remittances from Canada stand out:
· Consistency During Global Challenges: Canada’s stable economy and demand for skilled workers ensure that Filipino-Canadians can maintain regular remittance flows, even when other global economies slow down.
· Support During Emergencies: Whether during typhoons, earthquakes, or the pandemic, Filipino-Canadians have stepped up with additional support for their families and communities back home.
· Digital Growth: The rise of secure and efficient digital remittance platforms has made it easier and cheaper to send money from Canada to the Philippines. Services like OTT Remit, Interac e-Transfers, and online remittance apps have streamlined the process.
Your transfers do more than sustain households—they strengthen the Philippine economy in tangible ways.
3. Send Money Home Real-Life Impact: Where Do Your Remittances Go
To understand why remittances are so important, let’s look at how the funds are typically used:
Daily Household Needs
Most remittances go toward essentials like:
· Food and groceries
· Rent or home repairs
· Utilities (electricity, water, internet)
· Transportation
These contributions keep households running smoothly and ensure families meet their basic needs.
Education
Remittances often fund education, helping children and young adults secure brighter futures. Whether it’s tuition fees, school supplies, or allowance, your support empowers the next generation to achieve more.
Healthcare
Medical expenses are a major concern for many families in the Philippines. Remittances provide a lifeline, covering:
· Hospital bills
· Doctor consultations
· Medicines and treatments
Business and Investments
Many families use remittances to start or grow small businesses, such as:
· Sari-sari stores (neighborhood variety shops)
· Local farms or fishing ventures
· Transportation services (e.g., tricycles or jeepneys)
These businesses contribute to local economies and create jobs, multiplying the impact of every remitted dollar.
Emergency Funds
During natural disasters, economic slowdowns, or personal emergencies, remittances act as a safety net, helping families recover quickly and rebuild.
4. Looking Ahead: What to Expect for 2025 Send Money
According to GlobalSource Partners, remittance growth in 2025 is projected to rise by 3-4%, driven by several positive factors:
· Stable Job Markets Abroad: Filipino workers in healthcare, IT, hospitality, and skilled trades remain in high demand globally, particularly in Canada, the United States, and the Middle East.
· Increased Filipino Migration to Canada: Canada’s immigration policies and demand for skilled workers continue to attract Filipino professionals, strengthening remittance contributions.
· Advancements in Digital Remittance Technology: Faster, more affordable platforms will make it easier for Overseas Filipinos to send money, further increasing the volume of transfers.
These trends indicate a strong outlook for remittances, ensuring that their role in the Philippine economy will only grow in the coming years
5. Why This Remit Transfer Matters: Your Contribution Makes a Difference
For every dollar you send home, you create ripple effects that benefit individuals, families, and entire communities. Here are some powerful ways your remittances impact lives:
· A Child Completes College: Your support funds tuition, ensuring that students graduate with opportunities for better-paying jobs.
· A Small Business Thrives: Your remittance helps families launch a sari-sari store, employ others, and contribute to the local economy.
· A Family Recovers from a Typhoon: Your timely support helps rebuild homes and lives after natural disasters.
These real-life stories show that remittances are more than just money transfers—they represent hope, opportunity, and progress.
6. Key Send Money Takeaways: The Bigger Picture
Let’s recap the surprising ways remittances shape the Philippine economy:
1. Economic Stability: Remittances make up over 10% of GDP, driving growth and resilience.
2. Household Support: Funds cover daily needs, education, healthcare, and emergencies.
3. Job Creation: Many remittances fund small businesses, creating local employment opportunities.
4. Community Development: The impact of remittances extends to infrastructure, education, and local economies.
5. Positive Outlook for 2025: Remittances are projected to grow by 3-4%, thanks to stable job markets, migration trends, and digital innovations.
Your monthly transfer—no matter how big or small—creates a lasting impact
Conclusion: Small Remit Transfers, Big Impact
The latest data from the Bangko Sentral ng Pilipinas highlights that remittances reached US$31.5 billion from January to October 2024 alone, with a steady 2.7% YoY increase in October. This continued growth proves that remittances are a vital force behind the Philippine economy.
Whether you send money to cover school fees, fund a business, or help during emergencies, you play a critical role in building a stronger, more resilient Philippines.
So the next time you hit “send” on a remittance transfer, remember: you’re doing much more than supporting your loved ones—you’re helping fuel progress, stability, and hope for an entire nation.
Disclaimer: The views and opinions expressed by the authors in this publication are their own and do not necessarily reflect the views of OTT Remit, OTT Financial Inc., and the OTT Group of Companies. This publication is provided for general information purposes only and should not be considered as exhaustive or comprehensive in covering all aspects of the discussed topics. It is not intended to replace seeking advice from a specialist or professional.
