OFWs in Europe brace for cost-of-living squeeze

TOUGHER TIMES are looming for Filipinos in Europe as the Middle East war drives up the cost of living for them as well as for their families back home, raising concerns over the sustainability of remittance flows in the months ahead, according to a Madrid-based consultancy firm.

“The European Filipino diaspora and the effects of the Iran War have forced overseas Filipino workers (OFWs) to contend with the challenges of both residing abroad while maintaining and sustaining their family ties back in their homeland,” Conectando Filipinas said in a statement over the weekend.

According to the firm, OFWs are facing rising living costs in Spain, the UK, France, and Germany.

Citing estimates from a French-based online rental platform, it said that a one-bedroom apartment costs between €900 and €1,200 a month.

“Food expenses, aside from dining, are spiraling because of the high cost of fuel (and its impact on)  product and packaging, manufacturing, and logistics,” it said.

“These rising costs directly affect OFWs’ ability to manage their finances and sustain remittances to their families,” it added.

Philippine inflation accelerated to 4.1% in March from 2.4% in February and 1.8% a year earlier, breaching the Bangko Sentral ng Pilipinas (BSP) 2-4% target band.

“These combined pressures abroad and at home are reshaping how OFWs manage their financial obligations,” the firm said.

“The decline in the quality of life among OFW families in the Philippines underscores the importance of maintaining a strong and constructive link between the European Filipino diaspora and their communities back home,” it added.

It said that Filipinos in Europe are expected to increase, especially in Portugal and Spain, which could grow remittances from the two countries.

“However, the war could also bring about job losses and delayed or reduced salaries, leading to a downturn in remittance volumes,” it said.

Conectando Filipinas estimates that an OFW typically sending home €300  could end up sending only €150 due to the impact of the Middle East conflict, “reflecting a survivalist scenario where high local inflation in Europe forces a significant cut in transfers.”

Alternatively, monthly remittances could actually increase to €500 if OFWs practice the kind of “altruism” observed in migrant workers. Under such a scenario, migrant workers prioritize family welfare  during periods of economic stress.

“Over the longer term, the escalating conflict is expected to pose broader risks to financial systems and remittance channels,” the firm said.

“The escalating Mid-East conflict will impair the flow of funds from Europe to the developing economies of Asia. Money transfers face security risks and financial services disruption,” it added, noting that this could delay the critical help for OFW families.

If the war is prolonged, the firm expects it to affect employers’ sources of income, with these pressures passed on to workers through decreased incomes, forced relocations, and strained employer-OFW relationships.

The BSP reported that cash remittances coursed through banks rose 2.6% to $2.79 billion in February.

Conectando Filipinas is a Systembrand Group company which seeks to link Philippine enterprises with Spanish markets. — Justine Irish D. Tabile