Remittances offer crucial support amid rising prices, weakening economy

On a global scale, inflation has been influenced by multiple factors such as the COVID-19 pandemic, fuel price increases, and the ongoing conflict between Russia and Ukraine. 

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Locally, its effects are felt most in consumers’ wallets when purchasing basic goods. In light of the weakening Philippine Peso, the price of goods has risen exponentially. 

A multi-country study was conducted on migrants’ behaviors to manage finances during inflation, and results showed that 78 percent of respondents agree that their cost of living has risen. Among the topmost affected areas of expenses are utility costs, transport, daily living, housing, and healthcare. On top of that, they send money to their loved ones abroad to support their day-to-day expenses.

Amid these challenges, remittances remain as one of the sources of hope for the Philippines’ consumer-driven economy as they contribute greatly to the country’s acquisition of dollars. In the last year, remittances made up a total of $31.42 billion, which rose by 5.1 percent since 2020.

The trend of positive remittance flows is predicted to persist this year. A report from the UN’s International Fund for Agricultural Development (IFAD) estimates that around 800 million people globally benefit from remittances.

As Overseas Filipino Workers (OFWs) around the world continue to send dollar remittances to their families back home, they also help the economy recover. By sending money to the Philippines, OFWs financially support their loved ones at home and help increase their families’ capacity to spend for essentials in the midst of economic headwinds. 

Thus, digital financial service providers, like WorldRemit, are important stakeholders in keeping the country’s economy afloat. WorldRemit’s convenient, fast and secure money transfer services are important to breadwinners abroad, as well as their dependents back home.

“To cope with the hardships brought about by inflation, both senders and receivers of remittances can maximize the features that digital financial services provide,” stated WorldRemit’s Philippine Country Director Earl Melivo. 

Many names in fintech today, including leading player WorldRemit, offer fast and safe money transfers online at a low cost and with very competitive exchange rates. In comparison to traditional banks, their minimal fees often make them more accessible whilst better exchange rates provide more value to the OFWs’ hard-earned money for their loved ones back home.

“There are many external risks that may put people under financial pressure, but we want to remedy that by offering a better value and a wide array of options for sending money overseas,” Melivo added.