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Determinants of Overseas Filipino Worker (OFW) Remittances

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  • Renato E. Reside Jr.

    (School of Economics, University of the Philippines Diliman)

Abstract

This study estimates determinants of remittances to the Philippines. Remittance growth responds to real growth in the Philippines and in host countries, exchange rates, interest and deployment rates, inflation, as well as to immigration and employment policies. While most studies conclude that remittances are exclusively either driven by altruistic or self-interested motives, the evidence in this study supports remittances driven by both. The dual nature of remittances means that remittances can contribute to both consumption smoothing and business cycle amplification. Thus, remittances can be either countercyclical or procyclical depending on the shocks affecting them. Nominal price and exchange rate shocks give rise to the former response, while real shocks lead to the latter response.

Suggested Citation

  • Renato E. Reside Jr., 2009. "Determinants of Overseas Filipino Worker (OFW) Remittances," UP School of Economics Discussion Papers 200911, University of the Philippines School of Economics.
    • Handle: RePEc:phs:dpaper:200911
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    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/88/79
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    References listed on IDEAS

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    6. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 715-735, November.
    7. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    8. Faini, Riccardo, 1994. "Workers Remittances and the Real Exchange Rate: A Quantitative Framework," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(2), pages 235-245.
    9. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks," NBER Working Papers 12396, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Diwa C Guinigundo, 2018. "The globalisation experience and its challenges for the Philippine economy," BIS Papers chapters, in: Bank for International Settlements (ed.), Globalisation and deglobalisation, volume 100, pages 259-272, Bank for International Settlements.

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