Remittance usage for rural hometown investing in the Philippines: A mixed methods study

Abstract

This paper analyzes differences in attitudes and strategies for investing and entrepreneurship among families receiving remittances from their overseas emigrants at two rural communities in the Philippines. It examines how these households in the origin country determine how to invest remittances, and the extent to which these decisions are influenced by topographical, socio-economic, political, and cultural factors in their local spatial contexts. How do individual behaviors, along with risk appetite and financial capabilities, interact with such contexts as origin households assess the hazards and likely returns of investing locally? Primary data collected through household surveys in 2018–2019, and a rapid qualitative inquiry methodology, enable us in this mixed methods research to explore the interplay between individual financial behaviors and spatial factors affecting decision making. We can report that migrants’ origin households, and local financial institutions and entrepreneurs, employ relevant costing in reaching economic decisions, and assess favorable and adverse investment considerations explicitly. Remittance-supported economic development in origin communities relies on enhancements in household financial knowledge, and on interventions —through policy and regulation— to sustain and improve the local investment climate. If these conditions are met, households and local investors and entrepreneurs will make productive decisions through this relevant costing strategy and will contribute resources that promote microeconomic development. Relevant costing is thereby vindicated as a valuable concept, in attempts to unravel besetting complexities in the migration–development nexus.