Seafarer Remittances and the Economy

INTRODUCTIONSeafarers remittances are an important component of our countrys economic growth. In 2013, seafarers[footnoteRef:1] remitted a total of $5.22 Billion[footnoteRef:2], which accounted for 18.51% of total remittances, while seafarers only constitute 3.5% of total stock of Filipino migrant workers. The volume of seafarer remittances is about the same as the regional gross domestic products (GRDP) of Region 2 (Cagayan Valley), Region 5 (Bicol Region), Region 9 (Zamboanga Peninsula) and CAR, and twice those of Region 13 (Caraga) and ARMM. Comparing with other components of the balance of payments, sea-based remittances are three times foreign direct investments (FDIs) and seven times official development assistance in 2010, and half of current account balance (net exports) in 2013. [1: In this paper, the word seafarers refer to sea-based overseas Filipino workers. This does not include personnel from the Philippine Navy, Philippine Marine Corps, or any local shipping company.] [2: This value does not take in remittances from informal channels, such as pabaon, wherein a friend who visits the Philippines would personally hand in the remittance to the remitters relative during a visit to the Philippines. Amante (2003) wrote that pabaon system is common among seafarers to avoid the high transactions costs when sending via formal channels]

Over the course of 10 years, from 2003- 2013, sea-based remittances have grown four times, with a year-on-year average growth rate of 15.13%, a little bit higher from that of land-based remittances at 11.88%. Within the same time period, share of sea-based remittances to GDP also rose: from only 1.55% in 2003 to 1.92% in 2013, withstanding the countrys GDP growth from the past ten years. Figure 1 shows the smooth growth in seafarer remittances from 2003- 2013. Figure 2 shows the upward trend in the deployment of sea-based workers since 1984- 2013. Sea-borne trade has historically resisted fluctuations in world real GDP (Fearnleys, 2008). With markets becoming more internationally integrated, trade becoming even more essential, and the declining supply of seafarers in traditional shipping economies, demand for seafarers[footnoteRef:3] is expected to rise further, along with the deployment of Filipino seafarers, and therefore, Filipino sea-based remittances are unlikely to fall. [3: Demand for officers and ratings are expected to increase by 32,103 and 46,881 respectively by 2020 (JITI, 2010).]

While total seafarers share on remittances may seem small at single digit, calculating the per capita remittance would magnify the economic value of a seafarer. In 2013, the average per seafarer remittance reached $14,204.47, while the average per land-based worker remittance is only $2,113.19[footnoteRef:4]. From 2008- 2013, average remittance sent by a seafarer grew by 22%. Figure 3 shows an upward trend in per-worker sea-based remittances from 2008-2013. [4: This is calculated by dividing total land-based remittances with stock of land-based OFWs, rather than deployed OFWs. There is a list of problem with this calculation. First, not all land-based workers remit. It is common among OFWs to bring their families to their host countries. Second, income distribution of land-based OFW remitters is not available. We do not know whether there are many low-income OFWs remitting, or per-worker remittance is just really low. Third, the amount and regularity of remittances sent also depends on the cost of living in the host country (Orozco, 2006; 2009). OFWs in countries with low cost of living are subject to an income effect of increased savings. ]

Figure 1: Remittances of Sea-based OFWs (2003-2013)Source: Bangko Sentral ng Pilipinas

FFigure 1: Annual deployment of sea-based workers (1984- 2013)Source: Philippine Overseas Employment Administration

Figure 3: Average annual remittances sent by a Filipino seafarerSources: Authors calculations of data from Philippine Statistical Authority and Bangko Sentral ng Pilipinas

Figure 4: Average annual remittances by a land-based OFWSources: Authors calculations of data from Philippine Statistical Authority and Bangko Sentral ng Pilipinas

That the average seafarer sends more than the average OFW is hardly surprising. First, under the contract of Philippine Overseas Employment Association (POEA), seafarers must remit at least 80% of their income back to the Philippines. This is reasonable considering that seafarers do not have to spend anything on board. And, this constraint reduces the more on average because (s)he has a relatively higher income due to compensating wage differentials. The relatively higher wage is a means to attract individuals to enter seafaring. And third, seafarers have a very high possibility of return to the home country. Studies have proven that the higher the migrant workers possibility of return to the home country, the higher is the remittance sent. Fourth, seafarers are subject to less economic fluctuations compared to land-based workers, whose remittances also depend on the economic conditions in the host country; Studying the economic importance of seafarers go hand-in-hand with studying how their remittances lead to economic development. A large body of literature has shown that remittances lead to an improvement of household welfare, a rise in savings, an increase in social assets and small and medium scale enterprises (SMSEs), financial development, and a reduction in poverty. In the Philippines, remittances are shown to increase consumption (Abdon, et al, 2006; Villlamil, 1998; Tabuga, 2007), savings (Aranda, et al, 2005; Pernia, 2008), and human capital outcomes, such as health (Tullao, et al, 2007; Pernia, 2008) and education (Tullao, et al, 2007; Zosa & Orbeta, 2009; Pernia, 2008; Yang, 2007; Ang, et al, 2008). The Philippine remittance literature focused on how OFW households spend remittance income. Villamil (1998) categorized remittance by the sex of remitters and found that use of remittances vary depending on the sex of remitter. No other study has been made to analyze recipient-household behavior by categorizing remitters by type of work.It is not enough to look at the literature on remittances to infer the microeconomic consequences of the more specific seafarers remittances. Seafarers are subject to the required remittance ratio of at least 80%. It is hypothesized that having a large portion of income taken away would incentivize the remitter to ensure that the remittances are used productively, rather than squandered through conspicuous consumption. Furthermore, analyzing spending behavior of recipients of sea-based remittances would allow for specific policies for a more clearly defined sub-group of Filipino migrant workers. This paper contributes to the remittance literature by studying how recipients of sea-based remittances differ in spending behavior from non-recipients. The rest of the text is organized as follows: Section II describes the profile of recipient households. Section III states the methodology, provides information on the data used, and presents the results. Section IV analyzes the results and discusses the policy implications of the study. Section V concludes.

WHO ARE THE SEAFARERS?Amante (2005) presented characteristics of Overseas Filipino seafarers from the 2003 International Seafarers Database. The survey has a sample of 362 Filipino seafarers. A majority of the sample comes from Visayas. Monthly incomeAverage: $ 1,225

Senior officers: $ 2,086

Junior officers: $ 1,714

Able body (AB): $ 1,000

Ratings: $ 995

Average annual remittances$980

Length of contract9.7 months

RankRatings: 72.2%

Junior officers: 19.1%

Senior officers: 8.7%

Age37 years old

Age at first time work24 years old

Number of household membersEight members

Marital status73% are married

Average number of dependents5 dependents

Educational attainment55% college graduate

Figure 5: Summary characteristics of Filipino seafarersSource: 2003 Seafarer International Research Center (SIRC) Database (Cardiff University)

Given that the size of remittances largely depends on seafarer income, and seafarer income is determined by seafarers rank, it is interesting to know the seafarers distribution of ranks. From the SIRC 2003 database, 72.2% of the seafarers belong to the low-ranks, the ratings. Ratings earned an average of $995 in 2003. Assuming that these workers only remit the required 80% of their incomes, the average monthly remittance is $796. Among Filipinos, only 3 out of 10 seafarers are officials, while for Russians, the ratio is higher at 6 out of 10. Figure 6 shows the annual deployment of seafarers by rank. One can immediately notice the u-shaped trend in number of deployed ratings, reaching the minimum on 2009, and then surging back up a year later. The decline in deployment of Filipino ratings is attributed to the 2008 Global Financial Crisis. There was a considerable reduction in exports all over the world, and maritime transport, being responsible for 80% of world trade, and its labor market were eventually affected (Pocuca & Zanne, 2009). Filipino seafarers were not spared from the effect. But why then is there a considerable jump in employment of non-marine officers if the crisis led to a fall in shipping transport? The shipping industry made multiple adjustments[footnoteRef:5] in response to the decline in shipping transport activities during the crisis. One of which was hot laying up[footnoteRef:6]. A total of 1,500 ships were in hot lay up on 2009, a big jump from an average of only 200 from the previous years (JITI, 2010). This led to a modification in the crew mix from predominantly employing ratings to employing non-marine workers. Since a majority of Filipino seafarers are ratings, the decline in ratings deployment on 2009 reflects the fall in the average annual remittance per seafarer on the same year, as depicted in Figure 3. Hence, the seafarers were not spared from the Global Economic Crisis. [5: Adjustments made to financial crisis include ship scrapping, cancellation of orders of new ship building, changes in ship type, lay up, and low speed operation. (JITI, 2008)] [6: A hot lay up is when a ship is idle but a crew is readily available to operate the ship when needed. On the other hand, a cold lay up is when a ship is taken of out of service because there is not enough crew to keep it running. ] FIGURE 6: Annual deployment of seafarers by rank (2006-2013)Source: Philippine Overseas Employment Authority

DATA AND METHODOLOGY

This study uses the 2009 Family Income and Expenditure Survey (FIES). This dataset contains information on the sources of household income and on where households spent it on the last 12 months prior to the survey. In this paper, I studied how being a recipient of remittance approximately the size of that sent by seafarers change spending in behavior on different expenditure categories and on savings. Changes in the share of spending on food, non-food items, education, health, durable and non-durable goods are studied given that an individual receives the imputed seafarer remittances. Since other survey classified remittances by type of place of work (i.e., land-based or sea-based), studying the spending behavior of the recipients of sea-based remittances is not possible. To resolve this problem, I used the 2003 SIRC data on the average income of ratings, the lowest among the seafarer ranks, and senior officers, the highest among the ranks. Then, I approximated the average remittance sent in pesos, under the assumption that only the 80% of the POEA requirement is sent. The lower bound for the imputed remittance for seafarer is PhP 345,000 while the upper bound is PhP 720,000. From Figure 6, it is shown that the imputed remittances distribution is reflective of the frequency distribution as described in the SIRC (2003) database because the imputed remittance distribution is skewed towards the imputed remittance sent by those at the top ranks.

Figure 6: Skewed imputed remittance income distribution

Two big assumptions are made. First, it is assumed that the average income of seafarers have not changed since 2003. There is an upward trend on wages in most labor markets as wages are associated with the increasing standard of living. However, for simplicity, the average income is assumed to be constant over time to allow for a quantitative basis for the imputation of seafarer remittances. And second, it is assumed that the households within the imputed remittance income distribution are recipients of sea-based remittances, or at least the behavior of the households within the assumed income distribution matches the behavior of households receiving remittances from seafarers. This may not be true due to some other factors acting upon the decision-making processes of the recipients on where to spend the remittance income. Theory suggests that the remitter has intended use for the remittance, to which the recipient can choose to follow or to deviate (IMF, 2008). The nature of employment of seafarers is distinct from land-based workers, and this may act upon the seafarers decision on the intended use for the remittances. The data does not reflect any characteristics that capture the distinguishing characteristics of the seafarers work. The main explanatory variable in the study is being a recipient of sea-based remittances. Control variables used are primarily household socioeconomic and demographic characteristics. These variables are necessary to isolate the possible effects acting on the primary explanatory variable and thus, reduce potential bias. While remittances theory suggests the importance of including the characteristics of the remitter, these are unfortunately not captured by the data. The chain of remittances behavior from motivation to end-use is thus, bypassed to simply end use due to limitations with the data. Nonetheless, the results of this analysis, though incomplete theoretically, serve policy implications on the end of the remittance behavior chain, the recipients. Table 1 presents a summary statistics of the variables involved. Ordinary Least Squares (OLS) was used to estimate the partial effects of being a recipient of seafarer remittances on the shares of different expenditure categories to total household expenditures. The coefficients are derived by minimizing the residual sum of squares, , such that the fitted regression line is closest to the actual line. WHO ARE THE RECIPIENTS OF SEA-BASED REMITTANCES?It is essential to understand the characteristics of the recipients of sea-based remittances because they ultimately decide on how the remittance income will be used. Of the 38,400 sample population, only 347 (0.9%) receive remittances between 345,000 and 720,000, which we will refer to as seafarer remittances for simplicity. Household receiving seafarer remittances are placed at the ninth and tenth deciles of the sample income distribution. In fact, 91.4% of them are at the tenth decile. For these households, remittance income comprises a large part of total household income. Thus, these households rely largely on their seafarer relatives for their household spending. Being a recipient of remittances may have led to a reduction in labor participation of households.Figure 8: Share of remittance income to total household income

Figure 7: Income distribution of sample population

Figure 9: Number of households that received sea-based remittances per region

Figure 10: Savings of household receiving sea-based remittances

Figure 9 shows the savings distribution of households that received seafarer remittances. A large number of households have low levels of savings. (Literature).

Figure 10: Sex of household heads receiving

Figure 11: Dependency ratio of households receiving sea-based remittances

Figure 12: Type of place of residence of households receiving sea-based remittances

Figure 13: Educational attainment of household heads receiving sea-based remittances

ESTIMATION RESULTSDependent variableCoefficient

Savings (logarithmic)Insignificant

Share of educational spending to total expenditures0.031**

Share of medical spending to total spendingInsignificant

Share of food spending to total spending0.024**

Share of durable goods spending to total spending0.011**

Share of non-durable goods spending to total spendingInsignificant

Share of interest-earnings to total income-0.0018**

Table 1: Summary of OLS regression results**Significant at the 0.05 confidence level.

Table 2 summarizes the results of the ordinary least squares estimation for the primary explanatory variable, being a recipient of sea-based remittances.

Savings Economic growth theories consider savings as essential to attain higher levels of output and growth. Financial intermediaries channel savings into more productive uses in the economy, such as capital accumulation, which leads to higher growth in real variables, output, consumption, and capital. Solow (1956) wrote that savings push the maximum potential output the economy can achieve in the very long run. A simple supply and demand can demonstrate the impact of savings on the economy in the long run. Savings, InvestmentsInterest rateS1=I1S2=I2Ls1LS2

R1

R2

LD

Figure 14: Supply and Demand for Loanable Funds

Figure 6 shows that an increase in savings leads to an increase in the supply of loanable funds, then a fall in the market rate of interest. A lower interest rate would attract investments because the cost of borrowing to finance investments is lower. Thus, increased savings result to a higher level of investments. An increase in investments would result to an increase in aggregate demand, and thus, lead to an increase in the over-all level of output. In the household level, savings would provide a source of income through interests, thus allowing for an increase in future consumption, and serve as a cushion to shocks. Tables 2 and 3 show that being a recipient of seafarer remittances have significantly lower interest incomes than non-recipients. It could be that recipients substitute away from saving remittance income while they save more out of their own income. However, the result of the OLS estimates suggests that savings behavior of recipients of large amount of remittances does not differ from recipients of small amount and non-recipients. Table 3 shows the complete results of the regression. It is important to compare this result with the effect of the presence of a wage earner in the household. In contrary to the effect of receiving seafarer remittances, a household that receives wage income has higher savings than a household that does not receive one. It is not clear whether this is by choice of the remitter or a result of an existing principal-agent problem. Nonetheless, this warrants policies that would encourage savings out of remittance income. While the preferences of the remitter may have a strong effect on the end-use of the remittances, the recipient ultimately determines on how the remittances would be spent. Hence, policies that alter savings behavior of the recipients are called for to encourage savings in order to encourage investments, increase domestic output and eventually, its growth rate. Educational spendingEducation is considered as a human capital. As educational level increases, the productivity of the individual increases as well; thus, allowing the individual to earn higher wages. Literature on the effect of a higher educational spending suggests an improvement on quality of education and on student outcomes (Jackson, et al, 2015). In the regression analysis, share of an expenditure category to total expenditures was used to determine which expenditure categories become more valuable to the households as they receive sea-based remittances. Tables 2 & 4 show that recipients of seafarer remittances (i.e., remittances ranging from PhP 345,000 to 720,000) spend 3.1% more on education than non-recipients. To understand further, consider two alternative states of world: being a recipient of sea-based remittances and being a non-recipient. A non-recipient would spend Php 10,000 out of a total of PhP 100,000 for schooling; while if he were receiving sea-based remittances, he would spend PhP 13,000 out of PhP 100,000, holding effect of remittances on total expenditures constant. This result holds among broadly categorized recipients of sea-based remittances, yet this effect may not be the same among low-educated household recipients. An interaction term is made to account for the joint effect of educational spending and the highest educational attainment of the household head. The results show that household heads receiving sea-based remittances, yet whose education is only up to high school do not increase the share of education on total household expenditures. This result shows that the earlier result of increased share of educational spending among households receiving sea-based remittances is conditional on the educational attainment of the household head. One should note that the dependent variable used in this study is share of educational spending to total households spending. This result does not suggest that educational spending is lower among low-educated household head recipients. To test for this effect, a separate regression was made with educational spending as the dependent variable. The result from Table 5 shows a significant negative coefficient. These two results suggest a substitution away from educational spending to other categories of spending among low-educated household head recipients. Noting the strong positive relationship between receiving sea-based remittances and the educational attainment of the household reconciles the latter two results with positive effect of receiving being a recipient of seafarer remittances seen on the earlier regression analysis. Medical spendingResults from the regression analysis show that being a recipient of sea-based remittances does not increase the share of medical spending to total expenditures. Again, this does not mean that non-recipients have the same medical spending as the recipients. In fact, in a separate regression, it can be seen that recipients have higher spending on medical care than non-recipients. The results suggest that the increase in medical spending is a constant proportion of the increase in total expenditures such that the share of medical spending on total pie between recipients and non-recipients is not different. The share of medical spending is also not higher among college-educated recipients. Demand for medical care is often considered inelastic: i.e., individuals demand medical care only when they really need to (Ringel, et al., 2005). To account for the effect of the inelasticity of the demand for medical care, a regression is conducted with an interaction variable for being a household that receives seafarer remittances and having a member aged 60 and above. Individuals aged 60 and above have a more elastic demand for medical care; and thus, receiving sea-based remittances would increase total medical spending by more than a uniform proportion of an increase in total spending. The results show statistically significant, positive coefficient for the interaction term; thus, suggesting that share of medical expenditures increase among recipients of seafarer remittances if the recipient households have an elderly member. Durable goods expendituresDurable goods include electronics, furniture, appliances and transportation equipment. Regression results show that recipients of sea-based remittances have a significantly higher spending on durable goods by 1.1%. Food and non-durable goods expendituresThese two categories of expenditures are generally classified as consumption expenditures. Food expenditures consist of spending on food consumed at home, food consumed outside home, alcoholic beverages, and tobacco. Non-durable goods expenditures consist of spending on utensils, accessories, linen and furnishings. Share of non-durable goods to total expenditures is not different between a recipient and non-recipient. Share of food expenditures, on the other hand, are higher among recipient households by 2.4%. Furthermore, share of food expenditures are higher among households of the lower income class and the less educated. This result is consistent with Engels Law: as income increases and educational attainment improves, spending on other categories increase. Food expenditures largely constitute spending among poor households. It is interesting that recipients of seafarer remittances, while belonging to the top 20% of the samples income distribution, have a higher share on food expenditures than their non-recipient counterparts. In economic terms, the income effect of receiving seafarer remittances is higher than the substitution effect. Meanwhile, the opposite is true when receiving broad income, as shown from the decreasing share of food expenditures as income status rises. This suggests that recipients treat sea-based remittances differently from typical sources of household income. The same case is true on the effect of cash transfers on share of food expenditures. Gilligan, et al (2013) have different explanations for the stickiness of food consumption to cash transfers, which are used to explain its stickiness to remittances income. One is that the seafarer remitter may have already labeled spending priority for food. In the case that remitter has a different intended use for the remittance or the remitter left the spending decision to the household head, the stickiness can be explained by the fact that recipient household heads are mostly females. Gilligan, et al (2013) argued that females tend to spend more on what would improve child outcomes, such as on food. The same household head gender effect may be acting upon expenditure behavior towards food. On the other hand, the interaction of being a recipient of seafarer remittances and deriving wage income reverses the effect seen earlier, making the result consistent with the prediction of Engels Law. To put simply, households receiving sea-based remittances and earning wage incomes have lower share of food spending by 4%. It is possible that having a wider range of income sources result to a shift in intra-household bargaining. As remittances theory suggests, if the household relies solely on seafarer remittances, then the remitter largely determines food spending; while if the household has other sources of income on top of the remittances, then the other household members earning income also determines food spendingCONCLUSIONThis paper analyzed the spending behavior of the recipients of sea-based remittances by understanding how share of each expenditure category differs between recipients and non-recipients of sea-based remittances. From studying household behavior, we can make inferences on how seafarers via remittances, specifically contribute to the economy. Using data from the 2009 Family Income and Expenditure Survey. Philippine household surveys do not have a specific classification of remittances. As a resolution, seafarer remittance recipients are assumed to be those who received between PhP 375,000 and PhP 720,000 of remittances in the year prior to the survey. These bounds are computed by multiplying the average annual income of ratings, the lowest of the ranks, and the senior officers, the highest, with the required remittance-income ratio of 80%. Ordinary least square estimation results show that recipients of sea-based remittances generally have higher food, durable goods and educational expenditures than non-recipients. Interest earnings are significantly lower among recipients of sea-based remittances. This result is consistent with the insignificant result for savings. Results suggest that seafarers contribute to the economy by human capital accumulation, rather than capital accumulation, as reflected by the increased share of educational spending due to their remittances. Higher spending on education leads to a higher level of human capital; this, in turn, leads to higher workforce productivity and consequently, a higher level of output of the next generation. However, this is not entirely true of all households. Household heads with low educational attainment do not increase share of educational spending, and spend lower, in absolute terms, on education than non-recipients. Policies can be directed to encourage increased educational spending among this subset of recipients of seafarer remittances. Furthermore, seafarer remittances can be diverted towards increased savings by reducing the share of food expenditures. This suggests that households tend to spend remittances on non-productive uses as consistent with results in the remittance literature. Policies directed to encouraging savings are called for. Alternatively, information on investment opportunities can be disseminated. While banks offer special financial opportunities for seafarers, perhaps, this should come with financial literacy programs that would provide information on the opportunities being offered by financial intermediaries. REFERENCES:

DEPENDENT VARIABLE: SAVINGS (In logarithmic form)

VariableVariable definitionCoefficientP-value

w_sfr 1 = respondent receives remittance income between 345, 000 and 720, 000-0.0490.874

w_wages 1 = household has at least a member who earns wages0.246**0.000

sfr_wrk 1 = receives seafarer remittances and has a household member that earns wages0.5580.220

male 1 = household head is male-0.0270.718

married 1 = household head is married-0.315**0.000

w_job 1 = household head is working0.189**0.005

urban 1 = urban household-0.315**0.000

region1 1 = household belongs to Ilocos Region-1.063**0.000

region2 1 = household belongs to Cagayan Valley-0.648**0.000

region3 1 = household belongs to Central Luzon-1.416**0.000

region4 1 = household belongs to Bicol Region-1.792**0.000

region5 1 = household belongs to Western Visayas-1.572**0.000

region6 1 = household belongs to Central Visayas-0.457**0.001

region7 1 = household belongs to Eastern Visayas-0.968**0.000

region8 1 = household belongs to Zamboanga Peninsula0.2250.138

region9 1 = household belongs to Northern Mindanao-0.810**0.000

region10 1 = household belongs to Southern Mindanao-0.841**0.000

region11 1 = household belongs to Central Mindanao-1.058**0.000

region12 1 = household belongs to NCR-2.109**0.000

region13 1 = household belongs to CAR-1.144**0.000

region15 1 = household belongs to Caraga-0.894**0.000

region16 1 = household belongs to CALABARZON-1.665**0.000

region17 1 = household belongs to MIMAROPA-0.288*0.058

hhsize Number of members in the household-0.310**0.000

educ1 No grade completed1.423**0.000

educ2 Elementary undergraduate1.191**0.000

educ3 Elementary graduate1.064**0.000

educ4 High School undergraduate0.894**0.000

educ5 High School graduate 0.666**0.000

educ6 College undergraduate0.294**0.002

deciles1 1= belongs to the first income decile-9.810**0.000

deciles2 1= belongs to the second income decile-8.353**0.000

deciles3 1= belongs to the third income decile-7.243**0.000

deciles4 1= belongs to the fourth income decile-6.283**0.000

deciles5 1= belongs to the fifth income decile-5.438**0.000

deciles6 1= belongs to the sixth income decile-4.470**0.000

deciles7 1= belongs to the seventh income decile-3.621**0.000

deciles8 1= belongs to the eighth income decile-2.827**0.000

deciles9 1= belongs to the ninth income decile-1.664**0.000

age Age of the respondent-0.035**0.000

age2 Square of the age of the respondent0.000**0.000

dpdratioDependency ratio-0.136**0.000

_cons Constant term14.093**0.000

R-squared: 0.2605

DEPENDENT VARIABLE: SHARE OF EDUCATIONAL SPENDING TO TOTAL SPENDING


w_sfr 1 = respondent receives remittance income between 345, 000 and 720, 0000.031**0.00

w_wages 1 = household has a member who earns wages-0.009**0.00


male 1 = household head is male-0.005**0.00

married 1 = household head is married0.005**0.00



region1 1 = household belongs to Ilocos Region0.004**0.03

region2 1 = household belongs to Cagayan Valley0.015**0.00

region3 1 = household belongs to Central Luzon0.0020.15

region4 1 = household belongs to Bicol Region0.005**0.00

region5 1 = household belongs to Western Visayas0.007**0.00

region6 1 = household belongs to Central Visayas0.006**0.00

region7 1 = household belongs to Eastern Visayas0.008**0.00


region9 1 = household belongs to Northern Mindanao0.009**0.00

region10 1 = household belongs to Southern Mindanao0.003*0.06

region11 1 = household belongs to Central Mindanao0.008**0.00


region13 1 = household belongs to CAR0.019**0.00

region15 1 = household belongs to Caraga0.010**0.00

region16 1 = household belongs to CALABARZON0.0000.84

region17 1 = household belongs to MIMAROPA0.008**0.00

hhsize Number of members in the household0.001**0.00

educ1 No grade completed-0.015**0.00

educ2 Elementary undergraduate-0.013**0.00

educ3 Elementary graduate-0.012**0.00

educ4 High School undergraduate-0.011**0.00

educ5 High School graduate -0.008**0.00

educ6 College undergraduate-0.002*0.06










age Age of the respondent0.002**0.00


dpdratioDependency ratio -0.003**0.00


R-squared : 0.1332

DEPENDENT VARIABLE: SHARE OF MEDICAL EXPENDITURES TO TOTAL SPENDING


w_sfr 1 = respondent receives remittance income between 345, 000 and 720, 0000.0060.128



male 1 = household head is male0.002**0.027

married 1 = household head is married0.0000.948

w_job 1 = household head is working-0.009**0.000


region1 1 = household belongs to Ilocos Region0.005**0.003


region3 1 = household belongs to Central Luzon0.007**0.000





region8 1 = household belongs to Zamboanga Peninsula0.009**0.000


region10 1 = household belongs to Southern Mindanao0.010**0.000





region16 1 = household belongs to CALABARZON0.007**0.000



educ1 No grade completed-0.0020.238

educ2 Elementary undergraduate0.0010.413




educ6 College undergraduate0.0010.456












dpdratioDependency ratio0.0000.871

_cons Constant term0.0630.000

R-squared: 0.0624

DEPENDENT VARIABLE: SHARE OF FOOD EXPENDITURES TO TOTAL SPENDING



w_wages 1 = household has at least a member who earns wages0.015**0.000

sfr_wrk 1 = receives seafarer remittances and has a household member that earns wages-0.040**0.000

male 1 = household head is male-0.0010.474



urban 1 = urban household0.004**0.000

region1 1 = household belongs to Ilocos Region-0.0050.152





region6 1 = household belongs to Central Visayas-0.0010.686


region8 1 = household belongs to Zamboanga Peninsula-0.0040.307








region17 1 = household belongs to MIMAROPA-0.039**0.000








deciles1 1= belongs to the first income decile0.313**0.000

deciles2 1= belongs to the second income decile0.274**0.000

deciles3 1= belongs to the third income decile0.252**0.000

deciles4 1= belongs to the fourth income decile0.226**0.000

deciles5 1= belongs to the fifth income decile0.203**0.000

deciles6 1= belongs to the sixth income decile0.175**0.000

deciles7 1= belongs to the seventh income decile0.144**0.000

deciles8 1= belongs to the eighth income decile0.111**0.000

deciles9 1= belongs to the ninth income decile0.068**0.000


age2 Square of the age of the respondent0.0000.620

dpdratioDependency ratio0.007**0.000


R-squared: 0.5671

DEPENDENT VARIABLE: SHARE OF DURABLE GOODS EXPENDITURE TO TOTAL SPENDING



w_wages 1 = household has a member who earns wages0.0000.545


male 1 = household head is male0.0010.374

married 1 = household head is married0.002*0.063

w_job 1 = household head is working0.0000.636


region1 1 = household belongs to Ilocos Region0.0030.116









region10 1 = household belongs to Southern Mindanao0.009**0.000



region13 1 = household belongs to CAR-0.0020.256


region16 1 = household belongs to CALABARZON-0.0010.454






















R-squared: 0.0448

DEPENDENT VARIABLE: SHARE OF NON DURABLE GOODS EXPENDITURES TO TOTAL SPENDING


w_sfr 1 = respondent receives remittance income between 345, 000 and 720, 0000.0000.469



male 1 = household head is male-0.0004**0.000



urban 1 = urban household0.000**0.000

region1 1 = household belongs to Ilocos Region-0.002**0.000





region6 1 = household belongs to Central Visayas-0.002**0.000


region8 1 = household belongs to Zamboanga Peninsula-0.001**0.000








region17 1 = household belongs to MIMAROPA-0.001**0.000


educ1 No grade completed0.0000.557



educ4 High School undergraduate0.0000.217

educ5 High School graduate 0.0000.656








deciles7 1= belongs to the seventh income decile0.000**0.000

deciles8 1= belongs to the eighth income decile0.000**0.002

deciles9 1= belongs to the ninth income decile0.000**0.028


age2 Square of the age of the respondent0.000*0.077



R-squared: 0.0212

DEPENDENT VARIABLE: SHARE OF INTEREST EARNINGS TO TOTAL INCOME


w_sfr 1 = household receives remittance income between 345, 000 and 720, 000-0.0018**0.003




married 1 = household head is married-0.00010.621

w_job 1 = household head is working-0.00010.409

urban 1 = urban household-0.00020.128





region5 1 = household belongs to Western Visayas0.00030.311

region6 1 = household belongs to Central Visayas0.0005*0.070




region10 1 = household belongs to Southern Mindanao0.00040.121


region12 1 = household belongs to NCR0.00020.537


region15 1 = household belongs to Caraga0.0005*0.080




educ1 No grade completed-0.00040.172


educ3 Elementary graduate0.00010.681

educ4 High School undergraduate-0.00010.723












age Age of the respondent0.00000.824




R-squared: 0.0089

SUMMARY STATISTICS

VariableVariable definitionMeanStd. DeviationMinimumMaximum

sh_nfdShare of non-food expenditures to total expenditures0.4850.1430.0980.978

ln_save Logarithmic form of savings (total income total expenditures)6.3994.840017.177

sh_durShare of durable goods expenditures to total expenditures0.0160.05500.880

sh_irr0.0010.00800.370

sh_ndgShare of non- durable goods expenditures to total expenditures0.0020.00400.210

sh_foodShare of food expenditures to total expenditures0.5150.1430.0220.902

sh_educShare of educational expenditures to total expenditures0.0280.05600.675

sh_medicShare of medical expenditures to total expenditures0.0220.05400.883

sh_houseShare of housing expenditures to total expenditures0.1100.0810.0020.812

w_sfr1=household receives remittance income between 345, 000 and 720, 0000.0090.09501




married 1 = household head is married0.7800.41401

w_job 1 = household head is working0.8310.37501

urban 1 = urban household0.4510.49801


region2 1 = household belongs to Cagayan Valley0.0500.21701


region4 1 = household belongs to Bicol Region0.0580.23301

region5 1 = household belongs to Western Visayas0.0680.25101

region6 1 = household belongs to Central Visayas0.0660.24801

region7 1 = household belongs to Eastern Visayas0.0520.22301


region9 1 = household belongs to Northern Mindanao0.0460.21001

region10 1 = household belongs to Southern Mindanao0.0560.23001

region11 1 = household belongs to Central Mindanao0.0500.21801

region12 1 = household belongs to NCR0.1120.31501

region13 1 = household belongs to CAR0.0410.19901

region15 1 = household belongs to Caraga0.0410.19801


region17 1 = household belongs to MIMAROPA0.0430.20401

hhsize Number of members in the household4.7472.232124

educ1 No grade completed0.0310.17401


educ3 Elementary graduate0.1910.39301

educ4 High School undergraduate0.1200.32501



deciles1 1= belongs to the first income decile0.1110.31401

deciles2 1= belongs to the second income decile0.1100.31301

deciles3 1= belongs to the third income decile0.1080.31001

deciles4 1= belongs to the fourth income decile0.1050.30601

deciles5 1= belongs to the fifth income decile0.1000.30001

deciles6 1= belongs to the sixth income decile0.0970.29601

deciles7 1= belongs to the seventh income decile0.0950.29301

deciles8 1= belongs to the eighth income decile0.0920.28801

deciles9 1= belongs to the ninth income decile0.0920.28901

age Age of the respondent50.0513.9331199



Documents

Seafarer Remittances and the Economy