An Analysis of Remittance Tendencies of Philippine Migrant Workers

In developing countries, remittances play a key role as a source of external finance. Remittances are a form of aid that migrant workers send back to their families, located in their home countries, in order to support the needs of the household. In about 25% of developing countries, remittances are larger than public and private capital flows combined (International Monetary Fund, 2009). In 2008, the Philippines economy was the 47th largest economy in the world with a GDP of $322 billion dollars (Asian Development Bank, Fact Sheet). Remittances accounted for over 10% of the Philippine economy, making the Philippines one of the world’s highest remittance receiving countries. Using a probit model and an OLS regression model focusing on the Philippines in 2003, this paper will focus on exploring what variables influence the decision to send a household member away for work, what factors contribute to whether or not a household receives a remittance and if they do, how these same characteristics affect the value of the remittance