Do Remittances Save or Spend? Testing the Consumption-Investment Allocation Hypothesis for the Philippines Using WDI Time-Series Evidence, 2000–2023
##doi.readerDisplayName##:
https://doi.org/10.65166/dewg3q39关键词:
remittances, household consumption, capital formation, financial intermediation, time-series regression, Philippines, entrepreneurial ecosystem摘要
The Philippines receives among the largest remittance inflows in Southeast Asia relative to gross domestic product, averaging approximately 10 percent of GDP across the 2000–2023 period. Despite their scale and counter-cyclical stability, the macroeconomic allocation of these flows — whether they are predominantly directed toward savings, productive investment, household consumption, or financial intermediation — remains without rigorous country-specific empirical resolution. This paper addresses that gap by estimating four ordinary least squares regression models with Newey-West heteroskedasticity- and autocorrelation-consistent standard errors using Philippine annual World Development Indicators data spanning 2000 to 2023. The dependent variables are gross national savings, gross fixed capital formation, household final consumption expenditure, and domestic credit to the private sector by banks, each regressed on personal remittances received as a share of GDP with a consistent set of macroeconomic controls. Unit root pre-testing confirms that savings, investment, and consumption are integrated of order one; Models 1 through 3 are accordingly estimated in first differences. Domestic private sector credit is stationary in levels and estimated as such in Model 4. Results consistently support the consumption-direction hypothesis: remittances are positively and significantly associated with changes in household consumption (β = 0.393, p = 0.001) and negatively and significantly associated with changes in gross fixed capital formation (β = −0.356, p = 0.001). The savings association is positive but weakly supported and partially sensitive to pandemic-year controls. Remittances are not associated with financial deepening; foreign direct investment emerges as the external capital source most strongly linked to private credit depth (β = 6.514, p < 0.001). Robustness checks using lagged remittances and a COVID-2020 dummy corroborate the main consumption and investment findings. These results characterise the Philippine remittance economy as a remittance-consumption equilibrium with identifiable implications for business strategy, enterprise financing, and entrepreneurial ecosystem design in remittance-dependent emerging markets.
##plugins.themes.default.displayStats.downloads##
参考
A, I., Joseph, A., Callistus, O., Obioma, C., & Peterdamian, O. (2025). Remittance inflows and Nigeria's gross domestic product per-capita income. Global Journal of Economic and Finance Research. https://doi.org/10.55677/gjefr/20-2025-vol02e12
Adeniyi, O., Ogunjimi, J., Adekunle, W., Babatunde, M., & Omiwale, E. (2021). Analysis of savings-investment gap in Sub-Saharan Africa: Does the nexus between foreign remittances and domestic financial sector matter? https://doi.org/10.21203/rs.3.rs-239037/v1
Adow, A. (2025). Remittances and economic growth in East Africa. Cogent Economics & Finance, 13. https://doi.org/10.1080/23322039.2025.2461604
Ahmed, F., Islam, M., & Moniruzzaman, M. (2025). The impact of returnee migrants' remittances on reducing household inequality and poverty in Bangladesh: A micro-level study. Review of Development Economics. https://doi.org/10.1111/rode.13250
Alhassan, U., Maswana, J., & Inaba, K. (2025). Leveraging remittances for entrepreneurship: The role of financial development in developing economies. Journal of the Knowledge Economy. https://doi.org/10.1007/s13132-025-02819-1
Ali, U., Mughal, M., & De Boisdeffre, L. (2023). Migrant remittances, agriculture investment and cropping patterns. Journal of Agricultural Economics. https://doi.org/10.1111/1477-9552.12526
Amutabi, C. (2023). The impact of international remittances on gross fixed capital formation in Kenya: Evidence from an autoregressive distributed lag modelling approach. Cogent Business & Management, 10. https://doi.org/10.1080/23311975.2023.2282233
Anwar, A., & Mang, C. (2022). Do remittances cause Dutch Disease? A meta-analytic review. Applied Economics, 54, 4131–4153. https://doi.org/10.1080/00036846.2021.2022091
Atento, A. G. B., & Atento, R. G. O. (2026). Legacy retail under digital disruption: Strategic insights from National Book Store's omnichannel transition in the Philippines. Journal of Enterprise Strategy & Management Innovation, 1(1). https://doi.org/10.65166/nny9z718
Atento, R. G. (2025). Valuation metrics, market efficiency, and investor sentiment: A descriptive analysis of Philippine Stock Exchange-listed firms. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/6kbeat87
Atento, R. G. O. (2026). Macroeconomic and structural determinants of formal business entry in ASEAN: Evidence from a linear mixed-effects model using World Development Indicators. Journal of Enterprise Strategy & Management Innovation, 1(1). https://doi.org/10.65166/bh0gx302
Bare, U., Bani, Y., Ismail, N., & Rosland, A. (2022). Does financial development mediate the impact of remittances on sustainable human capital investment? New insights from SSA countries. Cogent Economics & Finance, 10. https://doi.org/10.1080/23322039.2022.2078460
Bindu, S., Sridharan, P., Swain, R., & Das, C. (2021). Causal linkage between remittances and financial development: Evidence from the BRICS. Journal of East-West Business, 28, 117–149. https://doi.org/10.1080/10669868.2021.1976348
C., O., O., O., M., O., O., A., & C. (2025). Effect of international remittances on household income and investment in Nigeria: The moderating role of financial sector development. African Journal of Economics and Sustainable Development. https://doi.org/10.52589/ajesd-rij6he9g
Chaudhary, S. (2022). Remittances economic growth and investment nexus: Evidence from Nepal. NRB Economic Review. https://doi.org/10.3126/nrber.v34i1.47991
Coronel, J., & Estelami, H. (2025). Evaluating the impact of remittances on household financial behavior. Accounting and Finance Research. https://doi.org/10.5430/afr.v14n1p15
Das, A., & McFarlane, A. (2021). Non-linear relationship between remittances and financial development in Jamaica. International Migration. https://doi.org/10.1111/imig.12911
Delessa, K., Alemu, T., & Bane, J. (2024). Remittances inflow and economic growth nexus in Sub-Saharan Africa: Do institutional quality and macroeconomic stability matter? Heliyon, 10. https://doi.org/10.1016/j.heliyon.2024.e25690
Dhakal, S., & Paudel, A. (2023). Remittance in Nepal: Status, trend and economic impacts. Business and Economics in Developing Countries. https://doi.org/10.26480/bedc.02.2023.82.90
Dutta, U., & Saikia, B. (2022). Remittances and economic growth: Empirical analysis from a panel of selected Asian nations. Millennial Asia, 15, 5–23. https://doi.org/10.1177/09763996221086745
Espelita, C. A. M., Atento, R. G., Rao, L. J., & Tian, Y. (2025). Understanding monetary policy: Student awareness, perceptions, and financial behaviors in the Philippine context. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/f7eayj47
Houessou, M., Slosse, W., & Buysse, J. (2025). Relationship between remittance and household expenditure in Benin: Evidence from ARDL model. SAGE Open, 15. https://doi.org/10.1177/21582440251343370
Hua, T., Kessels, R., & Erreygers, G. (2022). The impact of remittances on saving behaviour and expenditure patterns in Vietnam. Economies. https://doi.org/10.3390/economies10090223
Islam, M. (2021). Do personal remittances influence economic growth in South Asia? A panel analysis. Review of Development Economics. https://doi.org/10.1111/rode.12842
Islam, M. (2024). The remittance-growth nexus in leading remittance-earning nations, controlling regulatory quality, trade openness, energy use, and financial expansion. Review of Development Economics. https://doi.org/10.1111/rode.13120
Jallow, M., & Jiang, H. (2025). Remittance, domestic savings and poverty alleviation: Evidence from Sub-Saharan Africa. International Journal of Economics and Financial Issues. https://doi.org/10.32479/ijefi.19216
Joshi, M. (2024). Analyzing the impact of workers' remittances on savings and total deposits: A study of economic dynamics. Journal of Corporate Finance Management and Banking System. https://doi.org/10.55529/jcfmbs.45.28.37
Keho, Y. (2024). Impact of remittances on domestic investment in West African countries: The mediating role of financial development. SN Business & Economics, 4. https://doi.org/10.1007/s43546-023-00621-2
Kikkawa, A., Gaspar, R., Kim, K., Mariasingham, M., & Zamora, C. (2024). Measuring the contribution of international remittances to household expenditures and economic output: A micro-macro analysis for the Philippines. SSRN Electronic Journal. https://doi.org/10.22617/wps240025-2
Ltaif, S., Mihai-Yiannaki, S., & Thrassou, A. (2024). The role of personal remittances in economic development: A comparative analysis with foreign direct investment in Lebanon. Risks. https://doi.org/10.3390/risks12110176
Magwedere, M., & Marozva, G. (2023). Remittances and domestic investment nexus: Evidence from a PMG-ARDL approach. International Journal of Applied Economics, Finance and Accounting. https://doi.org/10.33094/ijaefa.v18i1.1280
Makina, D. (2024). The long-run relationship between remittances and household consumption: Evidence from Lesotho. Cogent Economics & Finance, 12. https://doi.org/10.1080/23322039.2024.2307098
Manapol, M., Lopez, S., & Sobrejuanite, M. (2022). Saving and spending habits of overseas Filipino workers (OFWs) and their families in Region XI, Philippines. ASEAN Social Work Journal. https://doi.org/10.58671/aswj.v10i1.15
Mariska, M., Hamzah, L., & Ratih, A. (2021). The effect of remittance, consumption, and FDI on economic growth in ASEAN countries. Eko-Regional: Jurnal Pengembangan Ekonomi Wilayah. https://doi.org/10.20884/1.erjpe.2021.16.2.1855
Menez, N., & Atento, R. G. O. (2026). Women's empowerment and enterprise dynamism in the Philippines: A WDI-based index and time-series evidence (2006–2022). Journal of Enterprise Strategy & Management Innovation, 1(1). https://doi.org/10.65166/7v64f412
Miah, M., & Bhattacharjee, P. (2024). Cash incentive on remittance inflow and its impact on economic growth in Bangladesh. International Journal of Innovative Science and Research Technology. https://doi.org/10.38124/ijisrt/ijisrt24aug1260
Mishra, K., Kondratjeva, O., & Shively, G. (2022). Do remittances reshape household expenditures? Evidence from Nepal. World Development. https://doi.org/10.1016/j.worlddev.2022.105926
Mohamad, N., Zawawi, N., Mohamad, N., Sidik, M., & Rahman, M. (2025). Harnessing remittances for entrepreneurship development in developing countries: Opportunities and challenges. International Journal of Entrepreneurship and Management Practices. https://doi.org/10.35631/ijemp.829006
Moreano, E., Bautista, M., Mata, J., & Ayaviri-Nina, V. (2024). Is there a link between remittances, capital formation, structural transformation and economic growth? A dynamic panel analysis for Latin America under the PVAR approach. Economies. https://doi.org/10.3390/economies12050109
Offor, K., Ngong, C., Onyejiaku, C., Enemuo, J., Ugbam, C., Ibe, G., & Onwumere, J. (2023). Remittances and emerging African economies' growth nexus in a post COVID-19 era. Natural Resources Forum, 48, 171–183. https://doi.org/10.1111/1477-8947.12319
Ofori, I., Gbolonyo, E., Dossou, M., Nkrumah, R., & Nkansah, E. (2023). Towards inclusive growth in Africa: Remittances and financial development interactive effects and thresholds. Journal of Multinational Financial Management. https://doi.org/10.1016/j.mulfin.2023.100798
Ofori, S., Gbolonyo, E., Dossou, M., & Nkrumah, R. (2022). Remittances and income inequality in Africa: Financial development thresholds for economic policy. Research in Globalization.https://doi.org/10.1016/j.resglo.2022.100084
Ojeyinka, T., & Ibukun, C. (2024). Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America. Economic Change and Restructuring, 57. https://doi.org/10.1007/s10644-024-09666-1
Okpara, R., Uguru, N., Nwokoro, A., & Chukwunenye, I. (2025). Effects of international remittances on poverty level, inequality and household income in Nigeria. International Journal of Development and Economic Sustainability. https://doi.org/10.37745/ijdes.13/vol13n293115
Opiniano, J. (2021). Remittances and the financial capabilities of migrant households in the Philippines. Asian and Pacific Migration Journal, 30, 370–385. https://doi.org/10.1177/01171968211044573
Opiniano, J., & Ang, A. (2024). Remittance investment climate analysis: Ascertaining the local development potential of overseas remittances in Philippine rural hometowns. Asian and Pacific Migration Journal, 33, 525–553. https://doi.org/10.1177/01171968241288259
Opiniano, J., Tan, Y., & Rudd, D. (2023). Remittance usage for rural hometown investing in the Philippines: A mixed methods study. Geoforum. https://doi.org/10.1016/j.geoforum.2023.103679
Osei-Gyebi, S., Opoku, A., Lipede, M., & Kountchou, L. (2023). The effect of remittance inflow on savings in Nigeria: The role of financial inclusion. Cogent Social Sciences, 9. https://doi.org/10.1080/23311886.2023.2220599
Otame, L. (2023). Categorising households based on shock severity experience: The effects of remittances on consumption smoothing post-shock in Nigeria. Journal of International Development. https://doi.org/10.1002/jid.3779
Özyılmaz, A., Toprak, F., & Bayraktar, Y. (2021). The effect of international remittances on financial development: The Turkish experience in the period of 1974–2018. Sosyoekonomi. https://doi.org/10.17233/sosyoekonomi.2021.03.09
Pal, S. (2024). The international capital flows and domestic savings-domestic investment nexus: A comparative evidence between heterogeneous developing regions. South Asian Journal of Macroeconomics and Public Finance, 13, 169–212. https://doi.org/10.1177/22779787241245779
Reed, T., López, M., Arrieta, A., & Iacovone, L. (2023). Evidence from Mexico.
Rivera, J. (2022). A theoretical approach in explaining the impact of remittances on the macroeconomy: Evidence from an overlapping generations model for the Philippines. DLSU Business & Economics Review. https://doi.org/10.59588/2243-786x.1189
Rivera, J., & Tullao, T. (2024). Leveraging labor emigration and FDIs for inclusive growth in the Philippines. https://doi.org/10.62986/pn2024.04
Salahuddin, S., Masud, M., & Teng, K. (2021). Remittances and households' savings behaviour in Bangladesh. Society and Business Review. https://doi.org/10.1108/sbr-08-2020-0104
Salahuddin, S., Masud, M., & Teng, K. (2024). Remittances and investment choices at the household level: Empirical evidence from Bangladesh. Jurnal Institutions and Economies. https://doi.org/10.22452/ijie.vol16no2.5
Song, Y., Paramati, S., Ummalla, M., Zakari, A., & Kummitha, H. (2021). The effect of remittances and FDI inflows on income distribution in developing economies. Economic Analysis and Policy, 72, 255–267. https://doi.org/10.1016/j.eap.2021.08.011
World Bank. (2024). World Development Indicators. Washington, DC: The World Bank Group. https://databank.worldbank.org/source/world-development-indicators
Xia, C., Qamruzzaman, M., & Adow, A. (2022). An asymmetric nexus: Remittance-led human capital development in the top 10 remittance-receiving countries. Sustainability. https://doi.org/10.3390/su14063703
Yamada, E., Shimizutani, S., & Murakami, E. (2021). The COVID-19 pandemic, remittances and financial inclusion in the Philippines. The Philippine Review of Economics. https://doi.org/10.37907/2erp0202j
Zardoub, A., & Sboui, F. (2021). Impact of foreign direct investment, remittances and official development assistance on economic growth: Panel data approach. PSU Research Review. https://doi.org/10.1108/prr-04-2020-0012
Zhang, W., Sadiq, R., Khan, T., & Khan, M. (2021). Policy implications of remittances, trade liberalization and Dutch disease — A comparative analysis based on income categorization. Resources Policy, 72, 102088. https://doi.org/10.1016/j.resourpol.2021.102088
##submission.downloads##
已出版
##submission.license##
##submission.copyrightStatement##
##submission.license.cc.by-nc-sa4.footer##This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Authors retain copyright of their articles but grant the Journal of Enterprise Strategy and Management Innovation (JESMI) the right of first publication.
