A common saying: “You wouldn’t be a Filipino if you don’t know a relative working abroad”. The clamor for greener pastures has led many Filipinos in foreign lands. And the cash remittance they send is driving economic growth for our nation.
But then, aren’t you curious what will happen if the OFW remittances suddenly vanished? This might be a masochistic question. But it can be a reality. Some families might even have a momentary experience now with DOLE’s suspension of Overseas Employment Certificate.
The Overseas Filipino Workers (OFWs) are our modern day heroes. This is a FACT that everyone knows. Although this is common knowledge, what exactly does this “economic growth” mean? What do the OFWs specifically give to the Philippine Economy?
Consumption Will Significantly Decrease
With our Kababayan’s sacrifice, the OFW’s families have been experiencing a higher standard of living. There are countless stories of families being able to afford better housing, transportation, and education. Earning in foreign currency gives them more purchasing power here in the Philippines.
Without OFW remittances coupled with the lack of opportunities in the Philippines, there will be a lot of underprivileged families. This might further increase the crime rate and significantly decrease literacy across the country.
Decline in National GDP Growth
As more cash remittances are injected into the economy, the economy will ultimately prosper. OFW remittance accounts for roughly 10% of our Gross Domestic Product (GDP).
With merchandise export and other industries’ slow growth, OFW remittance growth per year has continuously and greatly increased. As of date, the OFWs send roughly $2 Billion dollars worth of remittances PER MONTH.
Consumer Stock Prices are even driven by remittances. The absence of OFW remittances would cause an overall decrease in GDP. The country might not be experiencing the fast growth we are experiencing today. For what it’s worth, we are the 10th fastest growing economy in the world.
Reduction in Foreign Reserves
With so many OFWs spread out across the world, the influx of foreign currency is constantly entering Bangko Sentral ng Pilipinas (BSP).
Foreign reserves are important because it allows the country to create more flexible monetary and exchange rate policies. This allows the country to also respond better to an international crisis. It also protects the investments of foreign investors.
This may be an article-long explanation. Try reading this article for more information.
Simply put, the absence of OFW remittances will severely affect the capacity of the Philippines to intervene.
But what is common nowadays is saving up for your dream business. This prevalent life plan initiated entrepreneurial pursuits in the Philippines. It may be with a business partner based in the Philippines or you finally going back for good.
New innovations result in a better society. Without the increase in capital from opportunities abroad, our country will be far worse than now.
The OFWs are essential to our country’s growth. This explains the aggressive move by the government to protect our Kababayans. It is well-deserved!
Let us thank our modern-day heroes!