Remittance inflows every Southeast Asian country from 2000 to 2012 significantly increased, particularly in the Philippines, according to a new report from the International Fund for Agricultural Development (IFAD) and the World Bank.
“Southeast Asia is probably the world’s most dynamic and diverse remittance market,” the Sending Money Home to Asia report said.
It added that remittances sent by Filipino migrants to the country in 2012 accounts for over half of all remittances to Southeast Asia.
The report continued that accounting 10 percent of the gross domestic product (GDP), remittances for the Philippines is the third largest in the world at $24.3 billion in 2012.
Furthermore, with almost 13 million migrants living abroad, the report emphasized that both the outflow and inflow of migrants increased in almost every country over the past decade, with the largest outflow from the Philippines at 4.28 million and the largest inflow to Malaysia at 2.36 million.
In the whole Asia region, the report said that Asian migrants sent about $260 billion to their families in 2012.
However, it noted that high fees and limited financial services outside of urban areas are reducing the benefits of those remittances for millions of rural residents.
The report explained that migrants pay an average of 8.35 percent of GDP to send money home to Asia, which means that less money is going to reducing poverty and boosting prosperity for their families.
“In many senses, Asia cannot be described as a single market, as there are significant differences among subregions, and even between urban and rural markets in the same country,” it stated.
The report also pointed out that India, China and the Philippines account for 75 percent of all payment points in the region.
“Even though the average costs of sending money to Asian markets are below the global average, remittances to rural areas are still much more expensive,” it added.
The report further said that as a result, recipients of these remittances such as households have limited access to savings accounts and other financial instruments that can help build assets.
Lastly, the World Bank urged governments and the private sector to create a better regulatory environment, foster competition among remittance providers and develop a stronger payments system infrastructure in reducing the prices of sending money.
Mayvelin U. Caraballo