Overseas Filipino Workers can be called OFWs. They are people from the Philippines living or working in other countries. In most cases, they are going to stay overseas temporarily. It also includes land-based OFWs and also sea-based OFWs. According to the Philippines Statistics Authority or PSA, the total number of OFWs working abroad is about 2.2 million.
Almost 96.8 percent of them work with the existing work contracts. They can be classified as Overseas Contract Workers. They are also known as the modern-day heroes of the country. Since 1980, most OFWs have already helped a lot in maintaining good stability in the economy in our country. Here are several ways these OFWs can help our country grow our economy. By looking at these positive effects of OFW to the economy, you will understand why the presence of OFWs can be very important for our country.
How Does OFW Help the Economy of the Philippines?
- Household Income
OFW remittance can be a single source of income or a supplement to the existing domestic income. It will add a part to the fixed monthly income of a lot of Filipino families. This income will bring a lot of benefits for the family members and the country as a whole. The income can also increase the overall expenses in the country, so it can increase the economy of the Philippines.
- Standard of Living
This is another benefit that many OFWs can offer. OFW remittance can be used to improve their family's standard of living. Because of that reason, a lot of family members of the OFWs can enjoy their lifestyle by using their income from overseas. The higher the remittance, the better impact it has on household consumption in this country.
Mikka Montero, head of content department at AllTheBestLoans, notes that OFW business loans allow any Filipino to get additional working capital to become an entrepreneur and thus increase their income in the long run.
- Purchasing Power
The purchasing power can be valued by finding out the total goods and services purchased with a certain unit of currency. This value will be used to find out the total income that can be used to buy any products or services in the Philippines. With the OFWs' remittances, our country can increase the purchasing power of our citizens. It will allow their family members to maximize their domestic consumption.
- Multiplier Effect
Cash remittances can be sent to the OFWs' families in the Philippines. It can bring a lot of multiplier effects to the family members and the country. The income can be used to buy goods or services. It means that the money can go directly to a lot of businesses. As the result, it will increase income in many different sectors of the economy.
- Exchange Rates
High remittances from the OFWs can enable the Philippine peso to become a stronger currency. It also helps our country's exchange rate in several ways. It can decrease the cost of the total imported goods. Therefore, customers can buy these goods at a lower price. The remittances can be used to support the overall country's debt payments. The remittances from overseas can also make the Philippine peso worth more than the other currencies.
- Balance of Payments
This is another benefit that can happen from the OFWs' remittances. If the country can earn more dollars than the country can spend in the same period, it will cause the surpluses on the BoP. Cash remittances from overseas can be a significant help in maintaining the surpluses on BoP.
- Foreign Reserves
When we are talking about the OFWs' remittances, we cannot forget the foreign reserves. OFW remittances will be the 2nd largest source of foreign reserves. It means that it can play a vital role in helping the country to manage the foreign exchange rate against the volatilities. It can help the country to manage its economic stability in the country.
Given a lot of their financial capacity, many OFWs can be considered good investors in the country. They are known to have a lot of spending power for buying a lot of products and services in this country. Many of them are looking for wise and stable investments that can also help them move forward. Some of them also put some of their money in stocks, mutual funds, insurance, and their businesses. The most prized investments that they have will be real estate. Having their own home will be seen as the ultimate definition of success for them.
The stable investment will ensure a promising return because of the consistent capital appreciation. OFWs who are financially savvy will search for a constant source of passive income. Therefore, they are going to lease out their units and also sell their properties at a higher price. There are a lot of promising housing developments that are working in the Philippines. One of the most popular ones is Bria Homes, Inc. You can find out a lot of houses that are sold ranging from P 450,000 to P2,000,000 pesos. There are a lot of choices for people who are looking for good properties in the Philippines, for example, townhouses, duplexes, single firewalls, row houses, and also vertical villages.
It is very convenient for people to find comfortable houses to live in the Philippines. SOme of them are also interested in buying properties as investments. The house price in this country keeps increasing from year to year. Many OFWs also look for other factors when they want to buy properties. They will also look for properties that have easy access to shopping malls, supermarkets, schools, hospitals, churches, etc. These properties that are located in the strategic location are usually more expensive than the regular properties without any facilities around.
There are several areas that are popular among many OFWs today. They include Luzon, Visayas, and Mindanao. There are a lot of housing developments that are working around these areas. You can find a lot of houses and interesting properties that are located in these areas. It is recommended for you contact the right housing or property agencies. They are ready to help you choose the right properties to invest your money in this country.