ADB to study flow of overseas workers' remittances

ADB to study flow of overseas workers' remittances

Deutsche Presse-Agentur, Manila

The Asian Development Bank (ADB) has allocated US$500,000 to study ways to increase the flow of overseas workers' remittances in Southeast Asia, a bank statement said on Tuesday.

The study, which also aims to promote the channeling of these remittances through formal means, will cover Indonesia, the Philippines and Malaysia as recipient countries and Hong Kong, Japan and Singapore as source countries.

The Manila-based ADB said the study will identify factors in the policy, regulatory and institutional framework that impact the flows of remittances and propose action plans to encourage greater remittance fund flow.

"Overseas remittances have helped countries strengthen their balance of payments and workers' family members, who are often poor, have benefited from these flows," said Emma Yang, an ADB senior financial management specialist.

"The impact of these remittances will be maximized if fund transfers are made easier and cheaper and they are used for more productive investments," she added.

Yang said that making the fund transfer easier and cheaper could attract larger inflow and "directing the use of these from consumption to productive investments would help ensure more sustainability and effectiveness".

"Also, shifting such financial inflows from informal to formal channels would reduce the risk of money laundering," she said.

The ADB said the official annual remittances of migrant workers from South Asia, Southeast Asia and the Pacific accounted for 34 percent of the global total of $80 billion.

The World Bank said remittances are now the second source of external funding for developing countries, next only to foreign direct investments.