In the best of “normal” times, remittances from family members abroad forms a major component to the overall Philippine economy, and are a critical economic factor for many lower income families whose overseas members frequently remit a significant portion of their earnings to help the family in the Philippines achieve an improved lifestyle.
Last month, prior to Typhoon Haiyan wreaking devastation on the Philippines, the World Bank projected that remittances to Philippines would reach over $25 billion, or one-tenth of GDP, in 2013. “Remittances provide a lifeline” said Deli Ratha, Manager of Migration and Remittances Unit at the World Bank.
Philippine Red Cross secretary general Gwendolyn Pang stressed how remittance funds are a crucial part of the disaster aid donation system. “We do not have a clear picture of the figures – but there is obviously a huge boost in contributions and money sent to the Philippines through remittances”
Western Union, one of the largest money transferring operators worldwide, said that they have seen an “overwhelming response from around the world to support family and loved ones” in the aftermath of Typhoon Haiyan and they have launched zero-fee money transfer from 43 countries until 30 November into the Philippines to encourage remittance payments.
Looking at reactions to previous disasters, Nomura predicts a ‘substantial near-term’ pick up in remittances. Since 2004 the bank found that within 3 months of a calamity, remittances growth increased by 3.7pp from growth rates prior to the incident.
But Guntur Sugiyarto, a Senior Economist at Asia Development Bank speculates that figures could exceed those seen in previous natural disasters in the Philippines.
Manila-based Sugiyarto argues that the fast growing use of social media and the proximity of the Christmas season means that this time remittance flows will be unprecedented
Social media played a crucial role in the media coverage of the disaster – showing pictures taken on camera phones to global audiences days before traditional media channels could get to the area. Google also launched a ‘People Finder’ program to allow loved ones to reconnect after the storm.
Sugiyarto expects that instant, global access to the images of destruction — combined with the timing of the festive season — means that the Philippine Diaspora community will make more remittance donations in the coming months.