The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian

Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent.
ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their
use. Terminology used may not necessarily be consistent with ADB official terms.

REMITTANCE INFLOWS TO ASIA:

TRENDS AND ISSUES

Aladdin D. Rillo, Senior Economist, ADBI

Aiko Kikkawa Takenaka , Economist, ADB

8th Roundtable on Labor Migration in Asia

30-31 January 2018, Seoul, Korea
Remittances remain a stable source of
external finance in Asia …
… with differentiated importance
across countries
Remittances to Asia declined in
2016 for the first time since GFC
But the effect has been uneven
across sub regions…
 In 2016, 28% of
remittances to
Asia and the
Pacific were
intraregional:
down from 33% in
2011.
People move differently from
goods and money?
Integration in Asia: Intraregional
shares (% of total)

Source: ADB Asian Economic Integration Report 2017.

 Remittances are expected to recover
as global economic recovery gains
momentum

$ 269 billion
Remittances to
Asia and the Pacific In 2015
$ 264.6
billion
$ 259 billion Expected Remittances to
Remittances to
Asia and the Pacific In 2017
Asia and the Pacific In 2016
(World Bank Estimate)
Remittances in Asia: Key Issues
 Remittance volatility

• While remittances tend to be stable at aggregate levels,

remittances inflows to individual countries tend to be
volatile

• Remittances increase and smooth consumption, stimulate

spending on physical and human capital, and allow
construction of more disaster-resistant homes.

• But reduced remittances can have symmetric, damaging

effects. Any sharp changes in remittance flows can have a
significant impact on economic stability
Remittances in Asia: Key Issues
 Remittances cost
• Costly remittances not only reduce migrants’ earnings
substantially, but also prevent their efficient flow

• Although remittance costs in Asia have gone down to 8%,

they are still above the global average (7.4%) and the
targets set by Sustainable Development Goals (3%)

• Reducing remittance costs is central to development: 5%

decline in remittance costs will generate $15 billion in
savings
Remittances in Asia: Key Issues
 Promoting development impact of remittances
• Remittances can be leveraged to achieve higher levels of
investment, productivity, and economic growth

- investment-linked products that target migrants

(e.g., diaspora bonds)
- financial products to attract investment by receiving
households (e.g., remittance-backed bonds)

• Leveraging remittance technologies for financial inclusion

- inefficiencies in remittance processes result in high

fees, slow speed, and use of information channels
- digitalization can help alleviate some of these
issues (e.g., mobile money)
https://www.adb.org/publications/asian-economic-integration-report-2017
 DOWNLOAD
Asian Economic Integration Report 2017

aric.adb.org/aeir
15
Thank you!

16