How does overseas Filipino workers contribute to the economy of the philippines?

Question

How does overseas Filipino workers contribute to the economy of the philippines?

Answer 1

When money comes into the Philippines economy through tourists, foreign investors, OFWs, or relatives from other countries, they are effectively putting money into the Philippines circulation.  In contrast, it takes away from the country the money came from.

Generally, as more money comes in, citizens increase their ability to buy products and services while new employment opportunities for citizens can surface which can equate to more tax income for the country and improved environments (assuming citizens only buy products and services from within the country and are honestly paying their income taxes while governments spend the tax money wisely)

To explain in a simple demonstration, let's say you own a very small town with a circulation of P1,000,000 in it's isolated economy.  You may have only a few dozen citizens employed.  

Now let's say I own a neighboring small town with the same circulation of P1,000,000.

If one of the members of your small town decided to work in my town but send P50,000 back to your town.  My town's circulation would now be reduced to just P950,000 while your economy would grow to P1,050,000.  It may appear to be a small gain, but it can add up significantly if we were to demonstrate the same concept under a scenario involving millions of people.

Hope this helps!

Answer 2

If they send money home.