The Bangko Sentral ng Pilipinas (BSP) suggested a targeted program for OFWs to utilize their huge resources efficiently. The BSP said the productive potential of the overseas labor force are not being maximized. To do so, remittances must be tapped to level up development.

The World Bank, according to BSP Deputy Governor Amando Tetangco Jr., has ranked the Philippines as the third largest recipient of remittances after India and Mexico.

Thus, OFW remittances are equal to 10.5 percent of gross domestic product (GDP). Moreover, compared to foreign exchange receipts, remittances from January to September alone were equivalent to about 20 percent of the value of the country’s exports of goods and services.

"In fact, remittances are about 1.8 times the value of net exports of electronics, our number one export product, Tetangco said.

"It is an offshoot of the combination of two factors: the lack of opportunities at home and the demand for labor offshore.Remittances are likely to remain strong due to the continued expansion in the global economy and the aging population in some advanced nations."

  However, he said there is a need to address the question of whether remittances could be a tool for promoting growth and development and how.

“There are those who believe that remittances are an impediment for growth because the inflow of funds creates a dependency syndrome among the families that receive them. It’s also argued that remittances lead to conspicuous consumption rather than savings or investments."

  Still, he said that aside from providing foreign exchange resources and helping ease the foreign exchange constraints of the country, remittances were resources that were available and could be mobilized when needed.

  The major challenge here is to make OFWs aware of their financial options beyond consumption. "Even the simple act of using the formal banking system to remit the funds already has some economic impact," he said.

  A study of the Mexican experience shows that remittances held as deposits in the banking system had a multiplier effect of between two to three times.

How to level up remittances

financial literacy

"Just informing OFWs and their families that they have options in terms of various financial products would go a long way in mobilizing these resources."

put up own business

"Given its huge magnitude, remittances can play a major role in supporting the generation of entrepreneurial activities particularly in the micro and small and medium-scale levels".