Non-resident Indians sent the maximum remittances back home as compared to other Asian countries. In 2017, India received close to $69 billion in remittances, followed by China $63 billion and Philippines $32 billion.A record $272.5 billion in remittances were channelled to Asia in 2017, up 6.3 per cent since the previous year. Asian countries earned 44.41 per cent share of the entire global remittances sent in 2017. Global remittances in totality stood at $613.5 billion, which increased by $39.9 billion since prior year, according to the Asian Economic integration report 2018.
As highlighted in Asian Economic integration report 2018 "Remittances are an important and stable source of financial inflow to many developing economies in Asia. They are an important source of foreign exchange, especially for economies with limited natural resources. As direct transfers, remittances from overseas workers boost beneficiaries' consumption and savings. And as person-to-person flows, they can better target recipient household needs, raising living standards and family welfare."
Remittances to some South Asian countries are important components of their national income. For instance, Nepal's remittances were 28.4 per cent of its GDP in 2017. Since 2010, Bangladesh, Pakistan, and Sri Lanka relied on remittances for at least an annual average of 5% of GDP. In Southeast Asia, remittance inflow to the Philippines was to 10.5% of GDP, in Vietnam, it was 6.3% of their GDP.
Middle East and North America remains top contributor
Remittance patterns were fairly proportional to the share of migrants in host countries. But Middle East and North America were two positive exceptions. In their case, the remittances sent back to Asia were larger than the share of Asian migrant workforce.
Around 30.9 per cent ($84.2 billion) of remittances came from the Middle East while North America contributed 25.3 per cent ($68.9 billion). Inflows from the Middle East increased by $4.2 billion (up 5.2%) from the $80 billion remitted in 2016. Remittances from North America reached $69.1 billion (up 7.1%).
A large share of Middle East-bound migrants are temporary workers, who send most of their earnings back to their immediate families. The relatively larger remittances from North America are due to the large share of skilled migrants earning higher wages.
It is estimated by The Global Knowledge Partnership on Migration and Development that global remittances to Asia would expand by 3.8 per cent ($282.9 billion) in 2018 due to steady growth outlook of most host countries. However, increasingly restrictive immigration policies in some major host countries pose short- to medium-term downside risks. Nonetheless, demographic changes are expected to drive further migration from countries with growing working-age populations to countries with rapidly aging populations, creating new sources of remittance inflows in the long term.