How do remittances from Overseas Filipino Workers (OFWs) help stabilize the Philippine economy during global financial crises?
Answer (1)
Remittances from Overseas Filipino Workers (OFWs) play a very important role in the Philippine economy, especially during times of crisis. A remittance is the money sent by Filipinos working abroad to their families back home. These remittances support millions of Filipino households and are a major source of income for the country.Remittances from Overseas Filipino WorkersDuring global financial crises—like in 2008 or even during the COVID-19 pandemic—many countries experience slowdowns in business and job losses. But even in tough times, many OFWs continue to send money. This is because they know their families back home rely on them for food, housing, education, and other daily needs.These remittances help keep the local economy moving. Families use the money to buy goods and services, pay bills, and send their children to school. Their spending supports local businesses, from sari-sari stores to jeepney drivers to hospitals. Even when other parts of the economy are weak, this steady cash flow helps cushion the impact of global problems.Remittances also help the Philippine government. The dollars sent by OFWs are converted into pesos, which helps keep the value of the peso stable. It also increases the country’s foreign exchange reserves, which can be used during emergencies. This makes international investors feel more confident in the Philippine economy.In 2020, during the height of the pandemic, many expected remittances to drop sharply. But even then, OFWs managed to send around $30 billion—close to the same level as before. This shows how important and dependable their support is, even in uncertain times.
