Spending power of Philippines diaspora lifts up middle class


MANILA — Robust dollar inflows from millions of Filipinos working abroad are altering the Philippines economy as their relatives join the ranks of the middle class, according to a survey released Wednesday.

The international market research group The Nielsen Co. estimated 800,000 households in the Philippines spent most of the US$12.7 billion in annual remittances last year.

Much of it was spent on homes, cars, appliances, telephones and high-tech gadgetry like mobile phones, digital cameras and home video players, the survey said.

“It has actually increased the level of the middle class,” said Jay Bautista, country director of Nielsen media research which polled 300 overseas workers families in urban areas around the country.

Some 23 percent of families who have relatives working abroad now belong to the middle class, he told a news conference.

By comparison just 11 percent of the Philippine population without relatives working abroad are considered middle class and 84 percent poor.

The survey showed that more than 91 percent of the families of overseas workers receive around 30,000 pesos (US$677) a month or less.

Of that amount 32.9 percent goes to savings and investments, 8.8 percent to pay off debts and 58.3 percent used for consumption.

Bautista said the study found that family members tended to drop out of jobs and rely on remittances to sustain the family.

Most did not possess skills to invest the cash into productive activity.

“They have this impression that the stream of dollars coming in has no end so they’d rather be staying at home and waiting for the remittances,” he said.

Some 36.1 percent of respondents had their head of family working abroad, while 28.5 percent had a daughter overseas and 17.8 percent had a son working in a foreign land.

Bautista said despite the fact Philippine businesses spent 5.13 billion pesos (US$115.8 million) in advertising last year to cash in on this money train, there remained huge market opportunities for this sector.