Do International Remittances Contribute to the Food Security of Filipino Households?

Purpose - Remittances are an essential source of funds for the economy especially to household recipients and serve as an additional source of income that helps them smoothen out their consumption, engage in entrepreneurial activities or as a form of investment. This paper examines if households’ current socio-economic factors as well as additional source of income such as remittances contribute to the probability of households being food insecure in the future. Design/Methodology/Approach - To determine if remittances could contribute to the likelihood that Filipino households would be food secure or not in the future, this study employs a two-stage Logit regression model using the Family Income and Expenditure Survey (FIES) 2012 dataset. The first stage used the probit model in estimating the remittance and the second stage used to estimate the household’s probability of facing food insecurity in the future. Findings - Results showed that households are more likely to face food security when income increases. Income is not only used for basic consumption by Filipino households but also to meet food security. Moreover, those households receiving remittances have lesser chances of being food insecure compared to non-remittance recipients. These, therefore, confirm the two assumptions that: (1) the higher the per capita income a household has, the lower the probability of being food insecure; and (2) households with access to remittances are less likely to be food insecure. As income rises due to remittances, the household’s likelihood of being food insecure diminishes. This means that remittance as a source of additional income is expected and treated as transitory and used for insurance purposes to safeguard the household from being food insecure. Research Implications - umerous studies have focused on examining how remittances are spent by the household recipients on food, education, health and durable assets. However, finding the link between remittances and food security of Filipino households is not being given much attention. When a larger portion of income is being spent on food and not devoted for saving or investment, it would contribute to potential food insecurity in the future. Households are considered highly vulnerable of facing food insecurity in the future if they have at least 70 percent food budget share on the total per capita expenditure. Understanding and assessing the determinants of the likelihood of being highly vulnerable to food insecurity is crucial at the household level to policy decisions both for the government and any research-led development projects.