August 23, 2010
Text and photos by Ted Regencia
The 48-year-old works as a 24-hour caregiver to an elderly man who suffers from a moderate case of dementia.
On a recent Sunday, Paez rushed to the Skokie Currency Exchange near Dempster Street and Bronx Avenue to send money to her daughter, who is studying to become a lawyer in the Philippines.
As she took out two crisp $100 bills from her wallet, Paez asked the cashier what was the fee for conducting the Western Union transaction. Told that there would be a $12 charge, she decided to send the full amount to her daughter Rhoebe.
With the current exchange rate of 44 Pesos for every U.S. dollar, Paez said the money sent to her daughter is equivalent to a full month’s salary in the Philippines.
Information released Aug. 16 by the Central Bank of the Republic of Philippines reveals remittances from Filipino workers to help those back in their homeland is at an all-time high. And like Paez, many are sending money from places such as Skokie, where Asians make up 24 percent of the nearly 67,000 residents.
The Philippines was ranked fourth in 2009 — behind India, China and Mexico — in worldwide remittances of about $413 billion. Last year, money from the United States accounted for 66 percent of the more than $19 billion sent back home by the 3.6 million Filipino emigrants, according to the Migration Policy Institute in Washington, D.C.
The Philippine Central Bank reported that foreign remittances reached $9.1 billion during the first half of 2010, an increase of 6.9 percent, or $600 million, from last year. In June alone, the amount was $1.6 billion, an 8.3 percent jump from the same month in 2009.
But, what’s a financial report half a world away got to do with the average Jane and Joe?
As it turned out, a lot.
Of the total reported so far this year, $3.8 billion came from the U.S. By December, that amount is projected to reach more than $7 billion, according to the bank’s study.
Add up all U.S. remittances since 2003, and there is $48.7 billion in direct cash flow in favor of the Philippines. To put that in perspective, that covers Obama’s $34 billion budget for extended unemployment benefits, with about $15 billion leftover to fund the administration’s high-speed rail project.
As with many Filipinos who work abroad, Paez was forced by financial circumstances to leave her country. Rhoebe was a high school sophomore when her mother departed for the U.S. She graduated with a banking and finance degree and worked for the Philippines’ Commission on Audit.
Paez’s eyes flickered as she talked glowingly about her only child, who won a university beauty pageant two years ago. Her face was a picture of satisfaction when she received the remittance receipt from the Currency Exchange employee.
“I feel happy that I am able to send my child to school,” Paez said in the Cebuano, a language spoken in southern Philippines.
She said her “hard-earned” dollars also financed the education of her niece, who studied a two-year hotel and restaurant management course.
Paez said in one instance, she even sent money to buy a coffin for a deceased neighbor.
“You cannot just ignore other family members when they ask for help,” she said. “I guess it is really in our culture.”
According to the World Bank, the remittances have represented 10 percent of the Philippines’ gross domestic product over the past 10 years.
Eric Le Borgne, a senior economist for the World Bank’s office in Manila, points to the cash infusion as one of the main reasons that the Philippine economy was able to withstand the global recession. He said the money helped to “boosts private consumption, lifts foreign exchange reserves, the current account and deposits in the banking system.”
As the U.S. economy slows down considerably, continuing dollar outflow could get closer scrutiny. Money otherwise spent to pump up American businesses goes overseas instead.
Resentment bubbles up to the surface, as some segments in the society argue that American money should primarily stay local instead of propping up foreign economies.
However, people like 54-year-old Wilma Poyos-Gizowski don’t buy that argument.
Gizowski said she regularly sends money to her two sons and their families from a previous marriage. She even financed the construction of her children’s houses and helped to finance a small retail store for a daughter-in-law.
“Their income is not even enough to sustain their daily needs, so I have to send money,” Gizowski said.
Marivic Pardellada, 46, has been working in the U.S. for the past 10 years, the last two in Chicago. Pardellada said on average, she sends from $400 to $500 a month to her parents and daughter overseas.
Philippine trade attaché to Chicago Glenn Penaranda said, “The country appreciates the continued robust growth in remittances.”
“Our hope is that the remittances are also directed towards entrepreneurial projects, to generate employment and capacity building” such as in the field of education, said Penaranda, who is a Skokie resident.