OFW remittances - an economic booster
By definition, remittances are the transfer of money by migrant workers back to their family and friends staying in another country. Remittances facilitate economic growth all across the World. The World stands as a globalised village. Many people go aboard for better education or for a better lifestyle. Through Remittance they do not need to worry about their loved ones at home anymore. Remittance transfers have existed for centuries, but have only garnered the attention of people in the last couple of decades. Remittance Transfer could either be domestic or could be International. If the money is remitted within the same country then it is said to be Domestic. It is believed that almost ten percent of the population of the world is a part of the process of remittance.
The majority of the remittance receivers are poor individuals, thus remittance leads to better economic conditions and in many parts of India for the Indian families, the sole bread earners work abroad and hence the remittance that they receive helps them to survive. In order to make remittances more secure, the World Bank based in Washington has made the following information compulsory when the remittance transfer is to be made: the amount to be sent, the amount disbursed to the receiver, the fees if any paid by the sender and the receiver, the date when the remittance will be made available to the receiver and the place where the recipient will receive the remittance.
Remittance can be done through a Global Bank. But having a bank account with the bank for both the sender and the receiver is an essential. Or if not the banks then you may use Money Transfer Operators like Western Union Money Transfer. Remittance could also be done by going online to various sites and remitting money back to one's loved ones through the World Wide Web. The United States of America followed by Saudi Arabia and then by Germany has the highest volume of outgoing remittances. Net Receivers are the companies that have an incoming remittance greater than an outgoing remittance. The countries of India and Mexico, are leading the list of net receivers. The United States of America has sent about two hundred and thirty billion dollars worth remittance to countries all over the World. It is interesting to note that out of that, about one hundred and sixty seven billion dollars have been sent to the developing nations which is even greater than the total amount of official aid given to them and also account to 90% of the Foreign Direct Investment received by these developing countries.
Next to the exports of goods and services, overseas remittances are the largest foreign exchange sources for the Philippine economy. And empirical results as that undertaken by the Bangko Sentral ng Pilipinas indicate that the beneficiaries are first, the middle-income classes from across all regions and second, the low-income classes, also from all regions, except that of the NCR where the high-income classes come only second.
Further studies as that of the Asian Development Bank indicate that this has become a strategy in most developing countries – exporting human capital in favor of migrant remittances – to address poverty reduction. Truth is, practically, 10% of Filipinos today of the 90 million population work overseas making RP the third largest migrant-sending country next to Mexico and India. Thus, such remittances clearly become source of capital and resources as it impacts on the development of millions of households in the country.
For a number of years now, the government has been relying on the remittances of the OFWS to help and keep the Philippine Economy afloat. For this reason, no Philippine President can claim or take credit that he has something to do with the growing economy of our country. At the end of 2009, the total OFWs deployed is around 1.422M and a forecast deployment of around 3,400 daily. $18 billion spendable is a...
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