Inflation hikes cost of living of remittance beneficiaries

MANILA, Philippines — The cost of living of beneficiaries of remittances around the world has gone up due to soaring inflation, according to the results of a survey conducted by London-based WorldRemit.

The second Cost of Living Index of WorldRemit showed that 82 percent of remittance senders agreed that the cost of living for the people that they send money to has risen since the start of the year.

Highlighting the impact of inflation on people around the world, almost half or 45 percent noted they now only send money to immediate family, rather than friends and distant relatives.

One in nine people worldwide rely on money sent from friends and relatives who have migrated abroad for work.

Jorge Godinez Reyes, head of the Americas at WorldRemit, said “the findings demonstrate the grit of economic migrants in adapting to wider financial stresses and the rising cost of living while still meeting the needs of their families at home, and abroad.”

With several factors contributing to increased financial pressure, new data showed that 72 percent of respondents in the US, 41 percent in Australia, and 44 percent in the United Kingdom have taken up a side hustle or a job in addition to their main source of income.

About 27 percent of the respondents on average across the three markets indicated they did so to support the increase in their own cost of living.

Of the respondents who cited having a side hustle, 89 percent reported that they would maintain their side job in the next 12 months.

“The inventive solutions, such as side hustles, that we are seeing as a result of the current economic landscape point to the resilience of migrants and their commitment to financially supporting loved ones overseas,” Reyes said.

Households around the world are set to re-examine their spending habits in light of inflation, with more than a quarter of the respondents or 26 percent saying that they are curtailing discretionary spending on entertainment such as dining out or going to the cinema or theatre.

For example, in the UK, nearly two-thirds or 65 percent of people noted concerns regarding the cost of utility bills, highlighting the change in spending habits of UK households as a result of the energy crisis.

The multi-country study was fielded in October 2022 to determine the ongoing effects of the increased cost of living on international money senders in the US, UK, and Australia, resulting in observations from 2,687 international remittance senders.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that personal remittances from overseas Filipino workers (OFWs) inched up by 3.1 percent to $29.72 billion from January to October last year.

Cash remittances coursed through banks during the 10-month period rose by 3.1 percent to $26.74 billion.

Despite the uptick, the growth recorded from January to October remained below the four percent growth target set by the BSP for 2022.