THE PHILIPPINES had the fourth-highest remittance levels among low- and middle-income countries (LMICs) this year, with inflows estimated at $40.2 billion, the World Bank said.
The bank said its rankings were topped by India ($129 billion), Mexico ($68 billion), and China ($48 billion). Pakistan ($33 billion) placed fifth.
“In smaller economies, remittance inflows represent very large shares of gross domestic product (GDP), highlighting the importance of remittances for funding the current account and fiscal shortfalls,” the World Bank said in a blog entry published on Dec. 18.
It said officially recorded remittances to LMICs are expected to hit $685 billion in 2024, up 5.8%.
However, the World Bank said this is likely an underestimate because of the volume of remittances coursed through informal channels.
Remittances in the Philippines are larger than foreign direct investment (FDI) and official development assistance, the bank said.
“The gap between remittances and FDI is expected to widen further in 2024,” it said.
It also said that in the past decade, remittances grew 57% while FDI declined 41%.
The World Bank said remittances are expected to continue growing due to “enormous migration pressures driven by demographic trends, income gaps, and climate change.”
It also urged countries to find ways to leverage remittance flows for poverty reduction, financing health and education, bringing about financial inclusion, and improving access to capital markets for state and nonstate enterprises.
The World Bank said the $40.23 billion estimated remittance inflow was equivalent to 8.5% of GDP in 2024.
For East Asia and the Pacific region, the remittance flows to low- and middle-income regions rose 0.74% to $136 billion in 2023. — Aubrey Rose A. Inosante