Family remittances critical to achieving the Global Goals
29 June 2022
“Remittances are helping reach the SDGs, one family at a time," says UN Philippines chief Gustavo Gonzalez
MANILA, 28 June 2022—Remittances from migrant workers to their families are critical to the achievement of the Sustainable Development Goals (SDGs) worldwide.
At “Celebrating Filipino Economic Heroes,” an event held today at the Department of Foreign Affairs (DFA), United Nations (UN) Resident Coordinator in the Philippines Gustavo Gonzalez said that remittances are helping to accelerate progress towards achieving the SDGs, particularly those for poverty reduction, good health, quality education and climate action.
“Remittances are helping reach the SDGs, one family at a time, Gonzalez added.
According to the International Fund for Agricultural Development (IFAD), a 10 per cent increase in per capita remittances leads to a 3.5 per cent decline in the share of poor people in the population, given that over 50 per cent of global remittances are sent to households in rural areas, where 75 per cent of the world's poor and food-insecure live.
The UN has noted* that “infants born into remittance families have a higher birthweight and are less likely to die during their first year,” showing the positive effect of remittances on SDG 3, Good Health and Well-Being.
Referring to SDG 4, Quality Education, the UN has reported that remittance-receiving households have demonstrably better educational participation than non-recipients, and invest about one tenth of their income educating their children. In addition, children from remittance families, especially girls, register higher school attendance, enrolment rates and additional years in school.
At the same time, the UN has attributed progress in achieving SDG 13, Climate Action, to remittances and diaspora investment, which play a crucial role in mitigating the negative impacts of climate change and helping families cope with income shortages due to weather-related shocks.
The steady flow of remittances amid COVID-19, as well as economic challenges, conflict, and climate-related natural disasters, has helped to support continued progress on the global development goals.
Secretary of Foreign Affairs Teodoro L. Locsin Jr. said, “During the outbreak of the COVID-19 pandemic, remittances became even more essential as they shielded families, communities, and entire countries from the crippling economic consequences of the public health crisis and the economic shocks that followed. In 2021, the World Bank reported a total of 605 billion US dollars in remittances, an increase of 17% from the total remittances recorded in the 2020. Of that staggering amount, the Philippines contributed 34.9 billion US dollars, making our country the fourth largest destination for remittances in 2021. That’s the currency that buys vaccines and buoys up whatever economic activity was possible in the lockdowns.
Locsin added, “Because remittances have kept the Philippine economy afloat in good, and even more in bad times, our government has made a conscious effort to create an enabling environment for remittances to flow and grow, and increasingly to benefit those who earned them and need them the most desperately. At present, at least 50 per cent of financial tech companies in the Philippines provide digital payments, e-wallets, and e-remittances. Such innovations help ensure that remittances reliably and immediately reach those who earned them
At the same time, Gonzalez said that countries need to continue to work together to bring down the cost of remittances.
In late 2021, the average cost of sending 200 US dollars was 6 per cent, or 9 per cent less than 10 years ago. However, this is still double the target set to reduce the proportion of remittances costs to less than 3 percent under SDG 10 on Reducing Inequalities.
“Achieving this target of reducing costs of remittances will thus require improvements in financial technology and increased awareness, access, and digital financial literacy of both workers overseas and their families at home,” Gonzalez said.
“Celebrating Filipino Economic Heroes,” which was jointly organized by the DFA and UN Philippines to mark the International Day for Family Remittances, also featured messages from John Paul Canasa, an OFW working in Malaysia and from Luther Calderon, president of Kabalikat ng Migranteng Pilipino (KAMPI), a non-government organization that supports and advocates for the rights of Filipino migrant workers.
The International Day of Family Remittances, observed on June 16, was adopted through a UN General Assembly resolution in 2018. The Philippines, along with Guatemala, Madagascar and Algeria, led the adoption of this resolution.