Remittances and Household Outlook: Shaping the Economic Landscape of the Philippines

Abstract

Remittances have long been shown to support household spending and economic growth. However, limited access to disaggregated data constrains understanding of how these transfers influence household expectations. This study examines how remittances shape household economic outlook across different time horizons in the Philippines. Using regional transaction data from Bangko Sentral ng Pilipinas (BSP)-supervised pawnshops and money service businesses matched with the BSP's Consumer Expectations Survey from 2019 to 2022, the article shows that the relationship between remittances and household outlook is dynamic and varies by remittance source. Domestic remittances are more strongly associated with lagged and longer-horizon improvements in financial situation and family income outlook, while international remittances are often negatively associated with contemporaneous sentiment but become positively associated with several forward-looking outlook measures once lagged effects and common time shocks are considered. These findings suggest that remittances are associated with household outlook in complex, source-specific, and time-varying ways.