My Grandma Was Dying

I just saw the latest remittances figures in 2014 for overseas Filipinos. US $24.3 billion. That is a 5.8% increase over 2013. Sounds great, right?

It would be, if the money was spent on the essentials and used to help recipient families gain financial stabilty.

Now, check this out – a friend sent this to me last week …

when my grandma was dying ...

This makes me mad.

I don’t know the whole story and there are usually two sides to every story. But this is a tale with a common refrain: overseas Filipino sends money back home and the money then disappears.

Sometimes the money is used for self-profit; sometimes gambling; sometimes drugs and alcohol. In these cases, the end result is that the provider’s hard work is wasted and the whole family ends up no better than before. Millions of Filipinos go overseas to work not expecting this to happen, but it happens all the time.

Philippines Peso

Cash is the most flexible form of payment in the world.

And in the Philippines, cash is accepted everywhere. So cash is great when used properly. But is it really the best way to provide for one’s family needs? There is no control on what it is used for, no accountability, no transparency.

When we started BeamAndGo nine months ago, we wanted to attack this problem. We wanted the hard working Filipinos around the world to have control over their hard earned money AND still be good providers for their families in the Philippines.

At BeamAndGo, we believe there is a better way for people to support their loved ones in the Philippines other than just sending cash. Our goal is to enable providers to buy food, medicine, health care, insurance, education and other essentials for their family in a way that is affordable, convenient, transparent and sustainable.

If you like this article, please share with your friends and loved ones.

To see what we are doing at BeamAndGo, visit us at http://www.beamandgo.com. Also, I am always looking for ways to make BeamAndGo better, so if you have suggestions or comments, you can contact me directly at jonathan.chua@beamandgo.com.

7 Things About The Philippines’ Remittance Economy and How You Can Make a Difference

OFW_201501051. Over 20% of all families in the Philippines depend on cash from relatives working abroad in hospitals, ships, construction sites and households.

As of last count over 13 million Filipinos live abroad. This number is not going to get lower. Filipino workers are wanted all over the world because of their fluency in English, they are well-educated, and they are good natured.

And Filipinos want to work overseas. It may be more fun in the Philippines, but the pay and prospects are better overseas. In many cases, even if a similar job is available in the Philippines, a Filipino will choose the job that requires them to go aboard.

Because of this …

RemittanceOFW_2014_201501052. Total remittance from overseas in 2013 was US $22 billion.

And from January to September 2014, the amount was US $17.6 billion. Based on my rudimentary math, the projected overseas remittance in 2014 will be US $23.5 billion. And …

3.This remittance money makes up about 13% of the Philippines’ GDP.

And that’s just what’s happening overseas. This does not take into account the money from skilled and unskilled workers in Manila sent to their families in the provinces …

RemittanceCenter_201501054. Total remittance within the Philippines in 2013 was US $36 billion.

That is the official figure; however, there is an additional estimated US $35 billion in cash that passes between the providers and their families in provinces. This additional figure is unofficial because there are no records for these transactions: it’s all cash!

And it’s all cash, because …

PayDayLoan_201501055. Over 70 million people in the Philippines are unbanked.

Meaning these people do not have a bank account. Also means that these same people do not have any access to credit (i.e. credit cards).

Two knock-on effects are (1) the cost of remitting money costs more; and (2) no credit means it becomes difficult to buy a house, start a business, or send children to school.

I also think there is a 3rd knock-on effect …

PiggyBank_201501056. On average, Filipinos in the Philippines save only 0.63% of their money.

It’s like consumerism on steroids! Part of the reason is cultural; part of the reason is that the majority of Filipinos are unbanked and have no place to put their money; and part of the reason are socio-economic factors that I will write about in another post (I promise).

Here’s a true story: recently, someone I know asked me for a small loan. Thinking that the money would be used to feed her family, I was willing to provide the loan; however, when I asked what the money would be used for, she told me the money was to replace an out-of-date phone with the latest iPhone.

Whoa!

I know people who spend a lot of pesos on non-essentials (i.e. cosmetics, smartphones, etc.), when they barely have enough money to buy food for their family or books for their children. And there is zero money left if they are befallen by an emergency or calamity.

And as a result, the poverty cycle continues …

Poverty_201501057. Remittances are up, but the poverty rate improves very little.

In 2013, overseas remittance into the Philippines grew by 7.6 over 2012. The number of people living below the poverty dropped, but only by 1.3%.

Why?

I think it’s a combination of some of the things I mentioned above, namely (1) a high number of Filipinos are unbanked; (2) the high cost of a cash economy; and (3) consumerism on steroids.

But I believe there is hope …

If you are the provider for your family, you can make a difference.

Don’t just do what you have always been doing cause “that’s the way it is.” You can make the decision to try something different to improve your circumstances.

At BeamAndGo, we strive to be that something different. Our goal is to help people spend wisely in order to build a strong financial future. And we are working hard to provide you with a better way for you to take care of yourself and your family in the Philippines.

To learn more about what we are doing at BeamAndGo, just visit us at http://www.BeamAndGo.com. If you have any questions or comments, you can contact me directly at jonathan.chua@beamandgo.com. Feel free to share this article with your friends and family.