Marriage and Family


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Marriage and Family

UN News: The Importance of Family Remittances in Alleviating Poverty and Achieving the SDGs

UPF International-2022-03-17-UN News HQ: The Importance of Family Remittances in Alleviating Poverty and Achieving the SDGs

UPF International—UPF co-sponsored with the NGO Committee on the Family a UN Committee on the Status of Women 66 side event: “Family Remittances and Alleviating Poverty and Achieving the SDGs” on March 17, 2022. Providing in-depth discussion on this topic were: H.E. Mr. Enrique A. Manalo, Permanent Representative of the Philippines to the UN; Pedro de Vasconcelos, Head of Financing Facility for Remittances, International Fund for Agricultural Development (IFAD), Rome; and Ms. Vincenzina Santoro, American Family Association of New York. 

Ambassador Enrique A. Manalo stated family remittances have a transformative impact on all of the SDGs, particularly in eradicating poverty. Money sent back home by family members working overseas supports long-term development strategies for moving out of poverty and helps provide basic services to families, encourage entrepreneurship, and bolsters local investments, especially for rural families hit the hardest by poverty. The Philippines is the fourth largest recipient of remittances, receiving 3.488 billion, USD which represents 8.9% of the country’s GDP.

In the Philippines, a major milestone in the efficiency of remittance flow from overseas workers to their family members was facilitated by the creation of digital-only branchless banks. These remittance-focused banks also reduced hefty transfer fees so that the Philippines has the lowest fees in the world.

Ms. Vinnie Santoro, executive member of the NGO Committee on the Family and an economist with plentiful data at her fingertips, began by recognizing the great personal cost to families when a family member leaves their loved ones in order to send funds back home. These sacrifices are made because the financial needs of these families are very real. The most vulnerable populations are in the rural and agricultural areas of poor countries with the majority of world remittances being received by these families, mostly women. According to DESA, in 2021 there were 280 million migrants living away from home responsible for 751 billion dollars sent to their family members in undeveloped as well as developed countries. The lower- and middle-income countries received 78% of that amount or $589 billion. The global total is steadily rising as the World Bank projects that 774 billion dollars will be transferred to families back home in 2022. 

Ms. Santoro continued to present interesting data to convey the importance of family remittance. Foreign aid and foreign direct investments certainly help the economies and families of poor countries. According to the Organization for Co-operation and Development (OECD), the total of foreign aid given annually is 161 billion dollars. In addition, 30 billion dollars are given as direct investments. According to the United Nations Conference on Trade and Development (UNCTAD), 24 billion dollars in official development assistance was given to the least-developed countries in 2020. It is noteworthy that these significant amounts pale before the family remittance totals, soon approaching one trillion dollars. The largest countries, such as India, China, Mexico, Philippines and Egypt, receive the largest amount of remittances, ranging respectively from 87 billion to 35 billion. However, it is the smaller countries in which remittances have the greatest impact as these funds account for 20% or more of the GDP. For instance, family remittances sent to Lebanon in 2021 accounted for 35% of their GDP. Certainly, these small monthly amounts of money sent to their loved ones have a huge impact on lifting families out of poverty and achieving the SDGs.

One problem, also mentioned by Ambassador Manalo, has been the high cost of transferring funds internationally to poor families who often have little access to financial services. Ms. Santoro said that, fortunately, the cost to the emigrant has slowly been reduced from once a very prohibitive fee to now closer to 6%. She praised the IFAD as having made significant progress in improving awareness and efficiency of family remittance including the expansion of mobile banking.  

Mr. Pedro de Vasconcelos, IFAD, echoing some previous data, stated that around 200 million emigrants send money to their families with almost 800 million beneficiaries worldwide. He pointed out that although the dollar numbers are impressive, the real story is that of each individual family, living in stark poverty, receiving $200 for ten months out of the year. The human difference is mothers or fathers being able to buy food and/or schoolbooks for their children, having access to medical care, and even investing in some simple entrepreneurship to help lift them out of poverty. Seventy-five percent of what is received is used for immediate and basic needs. Families living in small agricultural communities are particularly at risk and receive the most significant benefit from family remittances.

Mr. de Vasconcelos explained that there is a negative misconception that oversea workers’ remittances result in money depletion in the host country. In reality, emigrants only send around 15% of their total income to their families; the far larger amount remains. In addition, the host countries gain workers, often skilled, who are highly motivated to work hard for the sake of their families. It is important to note that this small fraction of income sent is generally 60% but sometimes 100% of a recipient family’s income.

As has been mentioned, in the past, and for decades, the process of transferring funds to a poor family in a foreign country was complicated and required prohibitively high fees. Recently, commercial banks started offering remittance transfers at zero cost. The banks realized that the small gain from fees is far outweighed by the overall positive financial impact of the investments in families and their communities due to remittances.

It is important to recognize that a parent’s sacrificial separation from his or her family is painful and has many drawbacks for the children and family cohesion. One area that needs much more attention, according to Mr. de Vasconcelos, is that all emigrants want to return home to their loved ones, hopefully after the home situation improves. But this is almost always not the case as the families do not have a clear financial plan. The IFAD assists these emigrants and their families to gain in financial literacy and management as well as have access to services so they are more likely to facilitate a longed-for return home. More education and assistance in financial literacy such as this is needed to help families moderate the distress of family separation. 

During the question-and-answer period, many in the audience expressed surprise at how much they had learned, such as the vast impact of family remittance around the world. On the one hand, many were left with a clearer image of the daily hardships of poverty leading to the long-term heartache of this chosen family separation. On the other hand, there was a new appreciation for the unique bonds of the family that foster this sacrifice so that sons, daughters, spouses and grandparents could step out from poverty toward greater opportunities for flourishing.

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