The Impact of Remittances on Human Resource Development Decisions, Youth Employment Decisions, and Entrepreneurship in the Philippines Using CBMS Data
The impact of remittances on human resource development decisions, youth employment decisions, and entrepreneurship in the Philippines using CBMS Data Christopher James R. Cabuay Angelo King Institute for Economic and Business Studies De La Salle University I. Introduction a. Background For the past few decades, international migration has been an avenue for Filipinos to seek employment abroad. The stock of Filipino migrants has reached 10,489,628 in 2012 (Commission of Filipinos Overseas [CFO], 2014). Overseas Filipino Workers (OFWs) have been going to Saudi Arabia, United Arab Emirates, Singapore, Hong Kong, and Qatar for employment (Philippine Overseas Employment Administration [POEA], 2014). Migration is often coupled with the sending of remittances to one’s household in the country of origin. These remittances have become a major avenue for many households to maximize income and smoothen consumption spending over time. OFW remittances has been a significant driver of the Philippine economy especially since it fuels the property market with a strong demand from medium-low-income wage earners among families with OFWs (Villegas, 2014). Remittances have grown over the past decades and have reached 18.76 USD billion in 2010 (BangkoSentralngPilipinas [BSP], 2014) and growing further to 22.97 USD billion in 2013. The largest remittances come from USA (about 9.9 USD billion), followed by Saudi Arabia (approximately 2.1 USD billion), United Kingdom (1.32 USD billion) United Arab Emirates (1.26 USD billion), Singapore, Japan, and Canada (BSP, 2014). This indicates the dependency of the Philippine economy to the remittances from overseas workers. Despite the prevalence of the phenomenon, a significant question still remains: how are remittances being used by families? Tabuga (2007) finds that remittances generally decrease the household’s budget allocated for food, but increases the budget allocated for education, medical care, housing and repairs, consumer goods, leisure, gifts, and durables.
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