Cash remittances from overseas workers remain a lifeline for many in the Philippines

Filipinos working overseas sent home a record $31.4 billion last year

A Joyalukkas Exchange centre with the Philippines flag on display in Dubai's Satwa district. Ismaeel Naar / The National

In the middle of Dubai’s Satwa district, known locally as Little Manila for its Filipino diaspora, Myra Montemayor is multitasking — filling out a money transfer form while speaking with her teenage daughter back in the Philippines.

“It will be processed in 15-30 minutes so please make sure you have the right code to cash it out first thing in the morning,” Ms Montemayor tells her daughter, who needs the money to fix something urgently.

Ms Montemayor is one of hundreds of thousands of Overseas Filipino Workers (OFWs) living and working in the UAE whose families back home depend on monthly remittances.

Al Ansari Exchange and Leela Megh Exchange at City Centre Deira in Dubai. Photo: Sarah Dea/The National

With nearly 680,000 people, the Filipino community is one of the largest in the UAE. It makes up about 20 per cent of Dubai's population alone.

Filipinos working overseas sent home a record $31.4 billion in cash remittances last year. A year earlier, in 2020, cash remittances to the Philippines dipped by an annual 0.8 per cent to $29.903 billion.

Ms Montemayor has been in the UAE for the past eight years and worked in Kuwait before coming to Dubai to work initially as a tailor.

“The pandemic hit us very hard, especially during lockdown when demand for specialised skills like mine in tailoring women’s clothes went down and unfortunately I lost my job,” Ms Montemayor tells The National.

Ms Montemayor says she used to send her husband and children a cash remittance every month but that has now become less frequent, and depends on the cash left over after she has paid her food and rent expenses.

Foreign remittances have stimulated the Philippines’ overall economic development, reducing poverty from 23.3 per cent to 16.6 per cent between 2015 and 2018.

Overall, the Philippines was the fourth-largest recipient of global remittances in 2020. But when the Covid-19 pandemic hit, it had an impact on this.

However, Filipino economists believe the Philippines is recording a rise in foreign remittances especially as global economies begin their recovery phase post pandemic.

“OFW remittances account for roughly 10 per cent of the Philippines’ GDP. Continued growth in OFW remittances would support recovery in consumer spending, which accounts for nearly 70 per cent of the economy, as well as supporting the recovery of the country's GDP,” Jonathan L Ravelas, BDO Unibank chief market strategist and first vice president, tells The National.

“It looks promising this year as most of the economies are reopening and jobs are slowly getting back,” he adds.

Transactions are made at a remittance agent who specialises in Philippine peso transactions in Hong Kong. Nelson Ching / Bloomberg News

Money transfer service providers that dot the Al Hudaiba Road in the Satwa district appeal directly to overseas foreign workers.

A large Philippines flag hangs prominently at the Joyalukkas Exchange centre while large adverts touting discounts for money transfers to the Philippines feature in the window of another exchange centre a few doors down.

At one of the many counters sits Anbr M, who joined as a cashier in Dubai a few months ago. It is her first time living and working abroad.

“All my life I’ve seen my own relatives working abroad to provide us with a better life and their cash remittances meant not only a better future for the younger generation like myself but as means to survive everyday poverty,” Anbr, who preferred not to give her full name, tells The National.

She says the most busiest day for cash remittances are paydays when many receive their monthly salaries.

“It’s a huge responsibility to make sure every single dirham is accounted for. Many times when it is quiet my fellow Kabayans (a Filipino word meaning compatriot) will tell me where and why they are sending this money and it’s like listening to your own family member’s stories,” she says.

Money sent by Filipinos working abroad is expected to grow by an annual 4 per cent this year and next year, while the country’s gross international reserves are expected to reach $108 billion this year and $109 billion in 2023, according to the nation's central bank.