Filipinos Undeterred by High Inflation, Christmas Remittance Tradition Expected to Surge, Economists Say

by Edwin Quinabo

During the global COVID-19 pandemic’s most critical year, the 2020 total remittances (money sent from abroad) to the Philippines suffered the largest drop in a decade by 8.2% finishing at $29.9 billion. In a quick rebound despite the ongoing pandemic, 2021 total remittances to the Philippines rose 5.1% to close at $31.4 billion, according to the Bangko Sentral ng Pilipinas (BSP).

How is 2002 faring so far amid the latest global crisis of high inflation?

In the first few months, this year inflation has slowed down remittances but has picked up momentum in the third quarter, particularly for the month of September. BSP’s 2002 latest quarter reporting shows during the nine-month period of 2022, cash remittances rose by 3.1% to 23.3 billion from $23.12 billion in the same period last year. BSP projects that the global recession will not dampen holiday remittances and the year total should finish with a 4% growth (down from the central bank’s original projection of 6% growth), or about $10 billion in remittances for the last quarter.

The last quarter historically is the most robust for remittances. Why? Not only do OFWs send more money back home during this period for the holidays (the majority of total remittances are from OFWs), but Filipinos from around the world contribute to the year-end surge.

China Bank chief economist Domini Velasquez said remittances are expected to rise further ahead this Christmas season because “Filipinos will likely celebrate with looser restrictions this year compared to the last.”

Filipino expats (non-OFWs) living permanently abroad
As of 2020, it’s estimated that there are around 10 million expatriates residing in different countries. That’s a massive Filipino diaspora and another major source of remittances besides OFWs.

Citizens or dual citizens living in the U.S., Canada, Europe, or other Asian countries tend to maintain ties with the family they left behind. Expats say sending cash remittances during Christmas is one of the ways they keep family bonds tight.

Where there could be a dip in remittances
Economists say OFWs are expected to hold steady and finish at par with previous holiday remittances. Where there could be a drop, if any, is Christmas tidings from non-OFWs living permanently abroad.  But industry experts say the overall contribution from this sector could balance out if those who can afford to, will be making larger remittances.

Start of Christmas season, start of remittances
Filipino Americans typically start sending their Christmas remittances in the first week of December and continue all the way up to Christmas day, industry experts say.

OFWs already begun sending additional holiday remittances since September because the Philippines celebrates Christmas beginning in the “ber” months, making this country’s celebration the longest Christmas in the world.  People begin putting up Christmas decorations in September, October, November.

Prices for goods in the Philippines also tend to rise during this time which is why OFWs start sending additional money back home beginning in September. BSP reports dollar remittances climbed to a two-month high in September to $3.15 billion.

Inflation and Christmas tiding remittances
A WorldRemit’s 2022 Cost of Christmas study – which measures a country’s economic environment and the cost of standard Christmas expenses – projects the U.S. will spend 44% more for Christmas this year compared to last. The study estimates the average Christmas spending for Americans will be $1,235.54, or 27.82% of the monthly household income.

Americans have already been expressing sticker shock at the price of Thanksgiving which some say cost them significantly more this year. Some Americans said they’ve resorted to buying less and buying a smaller turkey.

With far more spending elements for Christmas (beyond one meal as Thanksgiving) for gifts, décor, multiple dinners and events through December — inflation is expected to take a heavy toll on Americans’ pocketbooks.

The U.S. is the largest source of remittances to the Philippines (mostly from OFWs).

Many parts of Europe are experiencing higher rates of inflation than the U.S. due to a spike in gas prices triggered by Russia’s invasion of Ukraine. Filipino OFWs and European Filipinos (immigrants and citizens) could find it more difficult this year to maintain their current amount of Pasko remittances.

Hawaii residents saying Christmas remittances most likely will change
Mary Ann Cabiles Galolo, teacher’s assistant at Maryknoll School, Honolulu, sends remittances to her mom regularly. But due to the current inflation crisis, she hasn’t sent remittances to her mom in the last three months. She says she cannot guarantee that she will be able to send her mom this year the usual amount for Christmas, $200.00.

It’s been rough financially for Galolo, who admits that this past Thanksgiving was the first time that they did not have a Turkey. On top of that, not being able to send money comes at a time when her mom happens to be sick and needs her diabetic medications.

Galolo said since arriving to the U.S., she has never missed sending money to her mom until this year. This tradition of Christmas remittances for her family started before her emigrating to the U.S. She said her grandparents who came to Hawaii as sakadas, even with their meager wages, during the 1920s, sent money back home to the Philippines.

Galolo mentions several methods of remittances like Money Transfer Operators (MTOs) specifically Western Union, door-to-door delivery, and bank transfers. “I use Moneygram because I’ve found it to be the cheapest one. I prefer to use them, or whichever company happens to have a sale or discount promos,” Galolo said.

John Leon Anderson, Sheet Metal Apprentice, Local 293, said he sends his mom $200 for Christmas to be split between her and a local orphanage. “This year will be slim, cut in half,” he said.

“This tradition of giving goes hand-and-hand with our principle of paying our church tithing.  It is customary to give back a little of 10% of our wages. Doing so, it is a great way to help me manage my finances and makes me more accountable.

“I am often reminded of my late Papa Mahal.” He said, ‘the more gifts we share, the more blessings we will be showered from our Father in heaven,’” John said. His mother also encouraged her children to give to the less privileged, to support school children and orphanages.

John goes through Metro Bank for his remittances.

Will probably send the same amount of money
Grace Martin, a retired clerk, a second-generation Filipino-American whose parents hail from Ilocos Sur, has been sending Pasko remittances for most of her adult life (she is now 59).

Her parents taught her the significance of giving back. Her parents would send money back to family in the Philippines all year round, to their grandparents, and for emergency situations, she said. But Christmas time was special and relatives in the Philippines were always both excited and thankful for the monetary regalos, Martin said.

Both of Grace’s parents passed on many years ago. The only relatives left in the Philippines are a few cousins. But still, to keep this tradition alive, to show her love for her relatives, and to honor the memory of and the values her parents have taught her, Martin said it’s [sending Christmas remittances] something she will do for the rest of her life.

“Many of us in Hawaii are upset about the cost of everyday goods and essentials. It’s getting harder for families to make ends meet. This will be the first Christmas with record-breaking inflation, but my family will continue to send the same amount to our relatives in the Philippines.

“I’m not sure if the Philippines is having high inflation as we’re experiencing in the U.S., whatever is the case, our relatives will be happy for the regalo,” Martin said.

She said her siblings also continue this tradition. “We usually give the same amount, something we agree on ahead of time. Like what our parents did in their generation among my uncles and aunties, one person (me as the eldest sibling) will collect the donations so there is just one transaction fee.

“Of course, today there are so many ways to remit money and the fees for some types are not much. But to keep things simple or it’s just the custom we are used to, we still do it this way. It’s something we can still do as a family. I choose the cash pick-up method because it’s easy and we don’t need to be sending money into people’s accounts – like some of the modern ways available – because our remittance is just once a year, during Christmas.”

She said they used to do door-to-door delivery remittances.

Martin comments on how sending remittance regalos is practically a part of Filipino culture.

Martin’s brother, Leonard Guzman, federal worker in Pearl City, has been to the Philippines twice: once as a teenager his sophomore year in high school, and another time in his mid-30s to accompany his mom as a travel partner because his dad had passed on and his mom didn’t like traveling alone.

He recalls meeting all his uncles and aunties and cousins the first time he went. “It was like, they’re family, instant connection. Because my parents raised us to be close to our family in Hawaii, just meeting my relatives in the Philippines that first time, it made sense that they were just as close to me as an uncle, aunty or cousin I’ve seen and grown up with in Hawaii.

“From that one time of meeting my family in the Philippines as a teenager, it was enough to keep that connection with them up until the second time I visited as a middle-aged adult, and until now. On rare occasions in between, I would have a telephone call with a cousin or receive a card. But I remember it was that first visit that established a bond. It’s that bond that keeps me sending Christmas remittances. Also, because I know this is what my parents would want,” Leonard said.

On the receiving end
Jeremiah Calayan, 24 years old, Pateros, Philippines usually gets around $150 from family outside of the Philippines that he says he uses for things like shoes or school supplies.

“I think it’s [sending remittances] my abroad family’s way of giving me something for Christmas since they can’t be here personally. Also, since they can’t be here, they have no idea what my “new” likes are so to avoid any waste they just send the money so I can get the things I want.

“We all have PayPal accounts. So, my family abroad just transfers money into my PayPal account, then I transfer it to my personal bank account. It’s easy,” said Calayan.

Methods of sending remittances
As a multi-billions dollar industry, it’s expected that new, innovative and convenient methods to sending remittances are made available as competition for market share is red hot. There are choices for everyone sending remittances, depending on comfort-level, level of ease (and tech-proficiency) for both the sender and receiver, something for the frequent remittance sender like for OFWs, or the best suited way for the casual seasonal sender.

Sending remittance can be as fast and easy as downloading an app and transmitting money by your phone or going to a bank or remittance company and either wiring money or arranging for a cash pickup. There is still the traditional door-to-door delivery system that old-timers prefer.

New and familiar ways of sending remittances
Here are some of the ways people are choosing to remit money to the Philippines. The first three are the newest, cutting-edge methods of remittances, and the four following them are more traditional methods.  (The following is a guide and for informational purposes only. The sender is responsible to do their own research.)

Many techies prefer sending money digitally. People utilizing this new method, don’t use the word “remittance” which they’d consider “old school.” There are many companies offering different digital wallets. The oldest involves simply transferring funds from your account to someone else’s account as PayPal.

Digital wallets are smartphone apps that store your payment information and securely transfer money to pay for goods and services or to send to someone digitally like in the Philippines.

This is called Peer-to-Peer Transfers. Instead of going to the bank to do a money transfer, people can do digital wallet transfers using their phones.

How does it work? Basically, by opening a digital wallet (for example PayPal), you are drawing money from your bank account or credit card to go to your digital wallet. The receiver must also have a digital wallet, in this example, with PayPal (there are other companies, Venmo is another popular company) to receive the money you sent.

Some cash app companies do not require that a sender have a bank account at a bank with a physical branch. Instead, you can place your funds in an online-only bank—which gives unbanked and underbanked communities opportunities to access the money they otherwise couldn’t. Digital wallet helps to enable broader financial inclusion.

This system is convenient for the receiver in the Philippines who might not have a traditional bank account to draw from. Many in the Philippines do not have bank accounts. In 2021, a study found only 51% of Filipinos have bank accounts.

The biggest advantage of receiving remittances from abroad using a digital wallet is the convenience of not having to go to a bank or remittance center which could be quite a distance away. Transfers using this method are near-instantaneous.

Popular mobile wallet companies in the Philippines are GCash, and PayMaya.

Julie Abalos, GCash International Remittance head, said GCash is the largest digital wallet in the Philippines with 83% of the adult population currently using the service. Fees vary (could be free or fee assessed) depending on the type of transaction.

Digital wallets have grown exponentially during the pandemic when in-person banking was disrupted.

Crypto wallets exist to convert fiat currencies to cryptocurrencies, hold money in them, and transfer it to others. Like a person-to-person digital wallet, the receiver of the remittance must have a crypto wallet. Transmission is also done by a phone app.

According to Kenneth Stern, Binance’s GM (the company that buys, sells and trades cryptocurrencies), users can save up to 8% in fees when sending funds using cryptocurrency compared to traditional money transfer methods (MTOs).

This, in turn, would benefit one of the most vulnerable populations and countries in the world, who today bear unfair and inefficient deadweight costs for transferring small amounts of money across borders, he said.

Fees vary (could be free or fee assessed) depending on the type of transaction.

Visa offers remittances to the Philippines through Visa by accessing the service through Netbanking, mobile or ATM. How does it work? Enter the recipient’s Visa card number and amount to send. The money will be received into the recipient’s Visa credit, debit or prepay card. Remittance is received in 30 minutes. It’s recommended that senders check with Visa and their remittance policies for details.

MTOs are non-bank financial institutions that send funds cross-border, either within their own system or via a partnership with a network of banks. This is a popular way of sending remittances and there are many companies to choose from. An advantage of using MTOs is their reliability having been the remittance industry’s standard for decades. For example, XE Money Transfer has been sending remittances to the Philippines for over 25 years.

Some MTOs, like Western Union, are so large that they’re able to afford to offer expanded services and give clients more options.

MTOs offer competitive exchange rates and have low too often no fees which means a higher payout for your money being transferred.

Some MTOs like Panda Remit are fully online and can be sent using a mobile app like digital wallet companies.

Some MTOs have been keeping up with cutting-edge transfer tech and offer versatility like remitting to your recipient’s bank account, debit card transfers and mobile wallet credit.

Some MTOs like WorldRemit will offer the first three money transfers for free.

To compare what MTOs are offering, there is an online money transfer comparison engine RemitFinder. It also checks and compares the latest remit exchange rates.

One of the most popular ways to send remittances is through cash pick-up. As the name suggests, recipients can pick up cash remittances at a location in the Philippines. This method is so popular that there are many cash pick-locations all over the Philippines. Money transfers sent for cash pick-up generally finish instantly, and the recipient can pick up the money within minutes. The caveat is because recipients are picking up cash, it’s recommended that they pick up their cash remittance during the day.

This system is known to be the most secure as banks have in place a robust system to protect against fraud and theft. It is ideal for sending large amounts of money.


While this is one of the oldest methods of sending remittances, it remains popular for its security and convenience for the recipient because remittance funds come to your door. For seniors, this is the preferred method to receive remittance because of its convenience, and because they tend not to be tech-savvy or comfortable using some of the new digital methods.

Due Diligence
It’s said that competition in an industry improves prices and options. This happens to be true in the remittance industry, particularly in countries like the Philippines where it is so common. The Philippines is fourth in the world for remittances received.

In anything where money is involved, it’s always encouraged that senders do their own research and find the company that best matches their own and their recipients’ needs.

Remittances: mixed bag
Can too much of a good thing be bad? Money remittances make up 9% of the country’s entire GDP. Foreign remittances have stimulated the country’s overall monetary development, helping to decline poverty in the Philippines from 23.3% to 16.6% during 2015 – 2018, economists say.

While remittances have done wonders for the national economy, it comes at a great cost. Critics say remittances increase the Filipino diaspora, adds to the country’s brain drain as some of their brightest seek employment or when possible permanent residency abroad, and destroy family cohesion as one (sometimes even two) parent works abroad to support the family.

But much of the case against the Philippines’ negative dependence on remittances is specific to OFWs whose absence away from home could potentially be problematic for some OFW households.

Holiday remittances from Filipinos abroad (non-OFWs)
The holiday remittances from ex-pats and first, second generation Filipino citizens of other countries, their remittances are simply seasonal gifts, relatives who receive them say.

It’s usually substantial enough to win over a smile, and make recipients enjoy their holiday feeling loved and remembered by those abroad. This monetary gift would be enough to buy a few basic items or have a fancy dinner and splurge on entertainment, but not the kind of remittances OFW families rely on for their livelihood.

Some Filipinos know that their families in the Philippines don’t need the money at all as Filipinos’ standard of living has improved markedly in that country from 30, 40 years ago. Today, money remittances to relatives in the Philippines could be for the receiver like that gift card from Starbucks you get from a friend.

But for many other Filipinos whose economic situation is just as challenging as it was for those 30, 40 years ago in the Philippines, to them, a Christmas remittance could be that money used to feed a family into the New Year.

Either way, the Filipino practice of Christmas remittances is special, certainly enough value in it for this tradition to last over generations.

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