Moving Forward, Looking Back: The Impact of Migrants’ Remittances on Assets, Consumption, and Credit Constraints in Sending Communities in the Rural Philippines

Agnes R. Quisumbing, International Food Policy Research Institute (IFPRI)
Scott McNiven, International Food Policy Research Institute (IFPRI)

Using a longitudinal data set from Bukidnon, Philippines, this paper explores the impact of remittances on assets, consumption expenditures, and credit constraints of households in origin communities. We use instrumental variables regressions to examine the impact of remittances on parent and child households. Remittances have a positive and significant effect on parents’ livestock holdings and educational expenditures per adult equivalent. For migrants’ siblings, remittances have a weak negative impact on land and livestock, but a positive and significant effect on food, clothing, and footwear expenditures. While remittances do not affect current credit constraints, they have a stronger impact on households that were credit constrained in 1984/85. Among constrained households, remittances have a positive and significant effect on livestock, the value of land and assets, and educational expenditures. Remittances also have a greater impact on children whose parents were credit constrained, increasing values of housing, consumer durables, and total nonland assets.