Relationship between Remittances and Economic Growth in Philippine: A co-integration Analysis

Abstract

The study’s main idea is to check the theoretical association between remittances and economic growth in Philippine. The conclusions demonstrate that remittances (REMIT) and Gross National Expenditures (GNE) have long-run co-integrated relation with Gross Domestic Product (GDP). Likewise, remittances (REMIT) has long run co-integration relationship with the Gross Domestic Product (GDP), Gross National Expenditures (GNE), Domestic Investment (DI) and Total Trade (TRADE). The outcomes of the Granger Causality test show that Gross Domestic Product (GDP) does Granger Cause Domestic Investment (DI) and TRADE does Granger Cause remittances (REMIT). Moreover, both have unidirectional relationship. Furthermore, there is bi-directional relationship between remittances (REMIT) and Gross National Expenditures (GNE). The study recommend that remittances inflow increase could be improved by utilizing the advanced innovation for remittances.