What Remittances Pay For: Food, School Fees, Medicine and Bills

In March 2026, the month that held Ramadan and Eid al-Fitr, foreign workers in Saudi Arabia sent home SAR 16.92 billion, the largest single month on record. The headline was reported as a capital flow. At the other end it was something much smaller: thousands of rent payments in Dhaka, school fees in Kerala, grocery runs in Mindanao, a tank of cooking gas in Kathmandu. Remittances are measured as one big number. They are spent as a long list of household bills.

That distinction sounds academic. It is not. If most remittance money goes to recurring household costs, then the right way to judge a remittance system is how cheaply and reliably it pays those costs, not just how cheaply it moves a lump of cash. This article looks at the survey evidence on what the money actually buys, where the data falls short, and why bill payment is the overlooked core of the business.

The data is thinner than the headlines suggest

Start with a confession on behalf of the whole field. For a flow measured in hundreds of billions of dollars, there is surprisingly little recent, representative data on how remittances are spent. Central banks track inflows by channel and source country. The Reserve Bank of India's sixth remittances survey, published in March 2025, covered 30 banks and showed that India received $118.7 billion in 2023-24, mostly classed as family maintenance, but it says little about what families did with it. National household surveys ask, but irregularly. Many of the most cited studies were fielded between 2004 and 2015.

What follows is therefore a mosaic. The pieces come from different countries and different years. They point in the same direction often enough to be useful.

What the surveys say: basic needs first, by a wide margin

The most detailed public breakdown is still Manuel Orozco's 2004 survey of Latin American remittance recipients, presented to the UN Commission on the Status of Women. Asked why they received money, 80.55 percent of recipients said basic family needs. Emergencies accounted for 6.2 percent, "enjoying nice things" 4.5 percent, and paying back debts owed to the sender about 4 percent. When asked what the money went on, food led for both men and women, followed by clothing, school costs, housing and health care.

Other sources fill in the picture.

The IOM's Guatemala work is a useful reality check on the investment story. Half the money went on consumption. Much of the rest went on things that look like consumption but behave like investment: school fees, medicine, home repairs. The GSMA's review of the CeSPI work shows that investment goals exist, real estate among Filipino women in particular, but they sit on top of a base of everyday spending.

Remittances are reported as a capital flow. They are spent as a household budget.

India: family maintenance, concentrated by state

For India the most recent official data is the RBI survey, summarised by Drishti IAS and Business Standard. It shows a sharply concentrated pattern. Maharashtra received 20.5 percent of inward remittances in 2023-24, Kerala 19.7 percent, Tamil Nadu 10.4 percent, Telangana 8.1 percent and Karnataka 7.7 percent. Digital channels carried 73.5 percent of transactions. Full-year inflows rose to $135.46 billion in 2024-25, per RBI.

The source mix tells you something about use. The US now supplies 27.7 percent of India's remittances and the six Gulf states 38 percent combined. A software engineer in New Jersey sending money to parents in Pune and a mason in Riyadh sending wages to a family in Malappuram are both coded as "family maintenance". The first is often topping up a comfortable household or paying a specific bill, such as a parent's hospital admission or a property tax demand. The second is frequently the household's main income. Our guides to bill payments for NRIs and caring for parents from abroad look at the first case; the Gulf to South Asia corridor covers the second.

The Philippines: a household budget in pesos

The Philippine Statistics Authority's annual survey gives one of the cleaner views of remittances at household scale. In 2024, an estimated 2.19 million overseas Filipino workers sent or brought home P262.2 billion, the Inquirer reported: P214.31 billion in cash sent, P40.56 billion in cash carried home and P7.33 billion in kind. The average was P129,000 per worker, up from P123,000 in 2023. Most OFWs work in elementary occupations, and among women the share is 64.1 percent, according to the PSA's 2023 results.

Those averages describe a household budget, not a portfolio. Our deep dive on Philippine remittances and OFWs looks at how that money moves.

Worked example: the cost of paying bills the long way

Take the PSA average and treat it as a household's annual remittance income: P129,000 a year, or about P10,750 a month.

Step one, the transfer. If that money moved at the World Bank's global average cost for a $200 transfer, 6.36 percent in Q3 2025, the household would lose about P8,200 a year to fees and exchange margins. That is roughly three-quarters of one month's remittance gone.

Step two, the bills. Now follow the money after it lands. Suppose the family uses it for the categories the surveys keep finding: groceries, school fees, electricity, water, a phone plan, medicine. Each of those may involve another step: a cash withdrawal, a bus ride to a payment centre, a counter fee or a late charge if the transfer arrived after the due date. None of those costs appear in the remittance price.

Step three, the alternative. If part of that P10,750 goes straight to the school, the utility or the pharmacy from abroad, the sender sees the bill paid and the family skips the cash-out and the queue. The transfer cost does not vanish, but the second layer of costs can. That is why we have argued that bills are the real remittance.

The example is simplified. Real households mix cash and direct payments, and many corridors are much cheaper than the global average. But the structure holds: the headline remittance fee is only the first of several costs on the way from a salary abroad to a paid bill at home.

Remittances as insurance, and why timing matters

The basic needs figure hides a second function. In the Orozco data, 6.2 percent of recipients cited emergencies as the reason they received money. That understates how important emergency transfers are, because a household that receives regular money for food also relies on the same sender when someone is admitted to hospital.

The March 2026 Saudi spike, reported by Argaam from central bank data, shows the seasonal side. Remittances jumped 35 percent from February as Eid spending, school terms and family obligations lined up. Bills, unlike Eid gifts, arrive every month whether or not the sender has had a good month. Late money means late fees, a disconnected meter or a child kept out of an exam hall. Reliability is the product.

Evidence on savings points the same way. In the El Salvador experiment summarised by J-PAL, giving migrants control over accounts in their home country roughly doubled household savings from a base of about $430. Senders want their money to land where they intend it. Direct bill payment and earmarked accounts are two versions of that same wish.

What this means

• Price the whole journey. The SDG target of remittance costs below 3 percent measures one hop. For a family that turns cash into school fees and electricity, the true cost includes the second hop. Our piece on paying utility bills across borders looks at how that hop is changing.
• Measure use, not just volume. National surveys should ask what money is spent on as routinely as they ask where it came from.
• Design for regularity. Monthly bills reward predictable payment dates, not one-off promotions.

What to watch next

• Late 2026: PSA's survey of overseas Filipinos for 2025, expected around December following the December 2025 release for 2024, will show whether the average remittance keeps climbing from P129,000.
• Ramadan 2027 (from about February): the next seasonal peak in Gulf outflows, and a test of whether March 2026's SAR 16.92 billion record holds.
• End of 2027: the G20 deadline for its cross-border payments targets. A cost target that ignored the bill-payment hop would miss much of what households actually pay.
• RBI's next remittances survey: the sixth round came out in March 2025. A seventh that asked about purpose in more detail would give India its first good picture of what the world's largest remittance flow buys.

Read the surveys together and the conclusion is plain. Remittances mostly pay for food, schooling, health care, housing and the monthly bills that keep a household running. The systems that carry them should be judged on how well they pay those bills, on time, at a price the family can see.

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