Economist Kelly Bird: 4.3-M Filipinos poor without remittances

Money sent home by Filipinos working abroad have kept at least 4 million Filipinos out of poverty as of 2006, an Asian Development Bank (ADB) economist said Tuesday.

Kelly Bird, senior economist at ADB’s Southeast Asia department, described remittances as "a major anti-poverty driver" in the country.

"Remittances have reduced the national headcount poverty rate by at least 5 percentage points," said the economist.

However, central bank deputy governor Diwa Guinigundo expressed doubts on the study’s claim that remittances are a major cure for poverty.

Citing data from the National Statistics Office, Guinigundo said nearly half of OFWs are skilled workers and only 33 percent are classified as laborers and unskilled. In other words, if these OFWs opt to work at home, they can still earn a considerable amount of income to sustain a well-off lifestyle for themselves and their families.

The central bank deputy governor backed his assertions with data from the 2006 Family Income and Expenditure Survey (FIES), which revealed that remittances are concentrated on non-poor families and that high-income families are major beneficiaries of remittances.

According to the FIES survey, remittances from abroad accounted for as much as 16 percent of income of households in the high-income bracket while poor families received fewer international remittances and relied more on domestic earnings.

Bird countered that these arguments ignored poverty dynamics.

In his study, the economist said many of recipient families "would be poor or were poor without remittances."

By taking away remittances from all households that received them in 2006 and assuming their consumption falls by the same amount, Bird said an additional 4.3 million people spread across income groups in the country would be poor.

- ABS-CBN News