Cross-border remittance transfers continue to rise despite slower growth in Asian economies as more Cambodians seek work abroad to support their families back home, an economist said yesterday, commenting on recent data.
Worker remittances, which comprise personal transfers by migrant workers to their households back home, doubled last year and continue to grow.
Cambodian migrant workers sent the equivalent of $363 million home in 2014, up from $167 million a year earlier, according to central bank figures. Worker remittances amounted to $110 million in the first quarter of 2015, putting the year on course to top $450 million.
The actual size of cross-border remittance flows is believed to be much higher as migrant workers – especially those working in neighbouring Thailand – often send back money through informal channels.
Economist Srey Chanthy said the rising value of remittance transactions reflects the fact that more Cambodians are seeking work abroad, while banks are keeping closer tabs on cross-border transactions.
“Increased remittances are due to the increased number of overseas workers and better reporting on their remittances,” he said.
Chanthy said that remittances, which account for about 2 per cent of GDP, are an important source of capital for Cambodian families that receive them and can be used on consumption – such as food, education, health and clothes – or investments.
“The spending contributes to current economic development, while investments contribute to future economic development,” he said.
More than 700,000 Cambodians – both documented and undocumented – work in Thailand, according to the Ministry of Labour. South Korea and Malaysia also have sizeable populations of migrant Cambodian workers.
Acleda Bank, an artery for Cambodian remittance transactions, has felt a surge in inbound money transfers, according to So Phonnary, the bank’s executive vice president.
“We’re seeing a trend of increased inbound transactions to Cambodia as more people work abroad and send money to their families,” she said.
According to the bank’s records, Acleda received total remittances of $130.3 million from South Korea, $89.9 million from Thailand and $8.7 million from Malaysia in the first eight months of the year.
By comparison, Acleda Bank received inbound remittances of $119.5 million from South Korea, $94.2 million from Thailand and $13.8 million from Malaysia during the whole of 2014.
In addition to these direct bank transfers, Acleda also handled inbound remittance payments sent via Western Union.
Lured abroad by the prospect of higher wages, Cambodian migrant workers say an ever-widening array of money transfer options help them to support their families back home.
Sim Sothea, who lives and works in South Korea, said he usually sends money back to his family whenever they run short.
“It depends on my family’s needs,” said Sothea. “I usually send them money once every two or three months, though some of my friends here send money home every day.”