REMITTANCES: ECONOMIC FUEL

Remittances Receipt

Over $12B annual remittances of the OFW came from these remittances receipt even though they do not pay taxes to the Philippine Government.

During paycheck time, OFW's flock to every remittance center here in KSA.  Each one will have to withstand the long lines to be able to send money to their families back home.  Sometimes, the money is still smoking hot, fresh from the cash machines or from their company payroll, straight to desired remittance booth.  Money left will be for his daily household allowance and for some amusement expenses.  

Remittance Center with my colleague

This figure of remittances will keep on rising because of the continuous influx of second generation OFW’s now joining the OFW bandwagon.  No wonder the economic experts baptized them, as the new heroes of the 21 st century.  It is really hard to ignore that they are now becoming the primary fuel to drive the Philippine economic growth.  According to the owner of a prime developer of real state company quoted as saying,  if it so happen that there will be a decline for the demand of OFW’s working abroad.  He said; he will immediately put on hold or completely stop all his real state projects to prevent possible losses.

 A typical town in the countryside with a demographics composed mainly of OFW beneficiaries will surely make a dent to the local businesses if these remittances will not reached the recipient in due time.  Just imagine the scenario if the banks did not receive the money from the OFWs:

• Construction stopped because the developers do not get paid.

• Increase of expired grocery food inventory because of low sales.

• Students will not take exams because of non paying of tuition fees

•   Deferred payment of loans.

•  No more take out pizzas or burgers.

•  Postpone parties and out of town picnics.

• Barbers will play more chess games than cutting hair.

• Tricycle drivers will spend more time in the waiting shed rather than on the road.

• The yaya will not get paid.

•  No more tip for the waiters/waitresses in the restaurant.

•   Grumpy lenders will keep knocking on the door.

•  Internet service connection will be interrupted.

•  Cellphones will just be use as a calculator, alarm clock, radio and camera.

• Dogs wont stop barking, asking for more meat bones in their left over foods.

Have you seen the point here?   It is just One Word…  It is the Economy people!

So, why is it that there was a fervent move to tax the OFW’s by certain individuals( mostly politicians)?   Because of the number… man!   To date,  OFWs around the world totalled to around 8 million and counting.   More than 1 million of which is from Saudi Arabia alone.   If you only collect $ 1 per person, that is a staggering $8M every single month to the government coffer.

There are a lot of debates surrounding this issue.  But one thing for sure, if you ask me or most of the OFW’s out there, the definite answer would be a resounding big  NO!!.   Knowing that the government will cut the portion of my hard earned paycheck is not anymore appealing and will surely demotivates the majority already working away from their family.

I am more than happy to pay for my real state tax, value added tax, professional tax, insurance tax, business tax, but please… not anymore to the fixed withholding tax deducted to my paycheck. I’ve been there and done that already. I do not remember smiling when I line up to pay for my withholding tax long time ago to the BIR. Why? My wife was not smiling to my paycheck either.   Leave that to those still happy working in the Philippines who might be someday by a sudden course of nature decided to also work overseas.

For now,  I’ve got big smile in line paying for my remittances because I know I make a difference in the economy as a whole and at the same time, also making my wife happy with a big smile going to the Bank. : -))

Till my next post.

Seize the Day,

Allan Laranang