Published on People Move

Waive remittance fees and restore remittance services in the typhoon-affected areas in the Philippines

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After a natural disaster, among the first form of help to rush in are remittances from migrant relatives. The physical infrastructure supporting access to cash and remittances is likely to have been disrupted by Typhoon Haiyan. Even drawing cash from one's own savings from banks is rendered difficult due to damaged physical infrastructure and disrupted communication networks.

Relief operations tend to focus on delivery of food and water, but delivering cash and restoring remittance services are also important to enable people to buy necessities. Perhaps banks and money transfer agencies could expand their courier networks and even consider waiving remittance fees for a month to help the affected people. (Recall: remittance fees were waived by some leading money transfer companies after the Haiti earthquake in 2010.) Government and international aid agencies in turn should try to restore basic banking and remittance services in the affected region.

Remittances provide a lifeline to the Philippines economy, especially to the lower income households. Last month we projected that remittances to Philippines would reach reach over $25 billion, or one-tenth of GDP, in 2013 (see M&D Brief 21 at After the typhoon, remittances are certain to increase as migrant relatives and friends are likely to increase their remittances, if need be, by borrowing from employers and friends.

In the relief and recovery phase, we also face a rather difficult dilemma about whether to allow the affected people to move and temporarily resettle in other locations. The knee-jerk reaction would be to help them where they are, but not allow them to move to our neighborhoods. There is, however, a need for temporary resettlement of affected people and also for more tolerance toward such people.


Dilip Ratha

Lead Economist and Economic Adviser to the Vice President of Operations, Multilateral Investment Guarantee Agency, World Bank

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