MABINI, the Philippines—The world’s currencies are gyrating, but the strains are being felt beyond financial capitals and corporate boardrooms. Millions of families in developing countries rely on relatives sending dollars, euros and other weakened currencies from abroad to prop up spending at home.
Lorena Baquillos’s husband, Jimmy, is one of nearly 10 million Filipinos working around the world. She’s managed to open a small grocery here on the money Jimmy sends home as a merchant seaman, but his dollar-based pay is translating into fewer pesos at home than it did a few years ago.
“I used to get 43,000 pesos every two months, but now that’s down to 33,000,” says Ms. Baquillos, 37, who uses her husband’s earnings to feed and school their three children.
For years, the Philippines has encouraged its citizens to seek out work in other countries to keep the home economy afloat. Former First Lady Imelda Marcos used to serenade overseas Filipino workers while on visits to the Middle East in the 1980s.
Today, funds channeled home, or remittances, account for more than 10% of the Philippines’ economic output, making it one of the most remittance-dependent countries in the world.
Many of these workers are in the U.S. or Britain or Italy, where currencies are struggling to recover from the global financial crisis. There are hundreds of thousands of Filipinos in places such as Saudi Arabia and Hong Kong, where currencies are closely linked to the ailing greenback.
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