Remittance to GDP ratio highest for Cambodia, Philippines in Asean

Remittance to GDP ratio highest for Cambodia, Philippines in Asean

Cambodia and the Philippines are the top remittance recipient countries in the Asean region by share of their national incomes (GDP), according to the latest paper published by the Economic and Social Commission for Asia and the Pacific (ESCAP).

Both countries are tied at nine percent while Indonesia has the lowest ratio at .8 percent (data for Singapore, Laos, Myanmar and Brunei were not available). The remittance to GDP ratio for Vietnam stands at 3.2 percent; it is 1.9 percent for Thailand and 2.25 percent for Malaysia.

The paper reveals that Central Asian and Pacific countries lead the list of Asian nations receiving foreign remittances.

Tajikistan has the highest ratio at 48 percent, followed by Tonga (41 percent), Samoa (32 percent), Nepal (27 percent), Kyrgyzstan (21 percent) and Uzbekistan (18 percent).

In terms of volume, India leads the list with total foreign remittances estimated at $125 billion followed by China at $50 billion.

The paper observed that despite strict regulations by the Royal Government of Cambodia to ensure legal channels for Cambodians to explore opportunities for expatriate employment abroad, especially in Thailand, hundreds continue to travel to Thailand through irregular channels, mostly due to the lack of finances to fund regular labour migration. “They can sometimes regularise their status at a later date during regularisation campaigns.”

It added that increasing number of female migrants, which exceeds 50 percent in Cambodia, is a growing trend, which looks irreversible. “The demand for female migrant labour is high in sectors such as healthcare, domestic work, entertainment, manufacturing and textiles. Migrant worker numbers are projected to rise in these sectors.”

The paper emphasised that in the corridor linking Thailand to Cambodia, the forex margin component of the cost is low both for banks as remittance service providers and money transfer operators, reaching the maximum of 3.4 percent. “The fee component of the cost is therefore heavier, especially for bank transfers.

“The total average cost difference between these two types of remittance service providers is great: 3.9 per cent for money transfer operators and 16.3 percent for banks. A similar composition of the remittance cost – high fee and low forex margin – is characteristic of all remittance corridors originating in Thailand.”

Speaking to Khmer Times, Nitin Madan, Director, Responsible Inclusive Finance Facility for Southeast Asia at SPTF, an organisation working towards boosting responsible financial inclusion in the country, said: “As more Cambodians remit money back home, it’s crucial to pair financial literacy with digital literacy for those sending the money and families that receive it. There is a strong case for investing in literacy, especially from a client protection perspective.”

According to a report from the Ministry of Labour and Vocational Training (MLVT), Cambodian workers abroad sent home approximately $2.95 billion in 2024, a slight increase from $2.94 billion the previous year.

The report indicated that 1.38 million Cambodians were working overseas as of last year, up from roughly 1.35 million the year before.

“In 2024, the ministry identified overseas job opportunities for 44,862 Cambodian workers, including 17,270 women.”

The last year also saw 18,561 Cambodian labourers returning home from abroad, including 6,934 women, as per the ministry data.

The report noted that more than 1.2 million Cambodian migrant labourers are employed in Thailand, while others are in South Korea, Japan, Malaysia, Singapore, China’s Hong Kong Special Administrative Region, and Saudi Arabia.

Cambodian workers in Thailand and Malaysia are estimated to earn an average monthly wage of approximately $400, while those in South Korea and Japan make about $1,500.

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