Study About Ofw

Topics: Poverty, Philippines, Household income in the United States Pages: 5 (1689 words) Published: February 12, 2013
Chapter 2
Review of Related Literature
This chapter will discuss the relevant facts, information and principles that are related to the study gathered by the researchers from different sources. Incorporate with these materials and sources, researchers will be able to understand further and know better about the research topic. It will be also helpful to the researchers by providing some information of the methods used in the past conducted studies.

In this chapter, researchers will be able to present related foreign literatures and local literatures. It will also present the relationships between the studies reviewed and state its similarities or differences as well. And lastly researchers will be able to summarize from the relevant sources and relate them to the topic that will justify the conduct of the research work.

Local literature and related studies
One of these is the article written by Jun Burgos, April 18, 2010. He stated that some 18.05 per cent of all Filipino households received cash from abroad in the year 2000, and this rose to 20.72 per cent in 2003 and then to 23.3 per cent in 2006. From the data, the author observed that more families of OFWs were spending less on food and more on health, with the percentage share of expenditures of migrant households on food down slightly from 44.9 per cent in 2000 to 43.3 per cent in 2006, while expenditures on health increased from 2.3 per cent in 2000 to 3 per cent. Allocations for durables, he said, were found to be steady at 2.2 per cent from 2000 to 2006, while fairly stable were those for education (4.5 per cent in 2000 to 4.4 per cent in 2006), and for housing operations (2.0 per cent in 2000 to 2.1 per cent in 2006.) he noted though that spending of OFW families for transportation and communication (including cell phone expenses) increased from 6.2 per cent in 2000 to 7.2 per cent in 2006. In its 2008 and 2009 reports, the BSP noted increasing savings and investments by OFW families largely in banks, other financial instruments and real estate an observation regarded as a big improvement from earlier reports describing OFW families as using a large part of their money on unproductive expenses.

According to BSP, the percentage of households that allotted portions of remittances to savings increased to 40 per cent in the first quarter of 2009, compared with only 35.8 per cent in the fourth quarter 2008 survey. The bank added that there was also a slight increase in the number of OFW families that set aside from money for investments, from 4.7 per cent in the previous quarter to 5.9 per cent in 2009. As mentioned earlier, the Philippines is one of the largest labor-sending countries and largest recipients of remittances. Increasing attention to the role of remittances in the Philippine economy has been occurring. However, currently, there are limited studies done to probe the migration-poverty nexus.

Pernia [2006] conducts a study to investigate the role of remittances in poverty alleviation and regional development utilizing panel data on the regions of the Philippines. The study empirically tests the impact of remittance on the welfare of the poor which is proxied by their mean per capita expenditure through quintile analysis. Importantly, he finds that remittances contribute to poverty alleviation which is reflected by the higher family spending of the poorest quintile which is the bottom 20% of the households. The estimation shows that a P1,000 increase in remittance per capita leads to P2,543 additional annual family spending after controlling for the effects of other local factors. Interestingly, the study also finds that this positive effect rises up to the fourth quintile and drops for the fifth quintile which he attributes to the fact that the richest quintile is less likely to have a member working as an OFW or to need remittance inflows.

Estudillo and Sawada [2006] scrutinize how trade openness and migration affect poverty...
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