The sixth edition of the International Monetary Fund’s (IMF) Balance of Payment Manual and International Investment Position Manual (BPM6) defines remittances as "household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies. Remittances include cash and non-cash items that flow through formal channels, such as via electronic wire, or through informal channels, such as money or goods carried across borders…". One of the key outcomes of recent methodological work carried out on remittances has been the replacement of the concept of “migrant” in the balance of payment framework on remittance data with the concept of residency. This definition includes flows beyond those resulting from the movement of persons and is no longer based on the concepts of migration, employment or family relationships.

The BPM6 addresses the definitional issues associated with international labour mobility and remittances, while the publication International Transactions in Remittances: Guide for Compilers and Users (RCG) provides practical guidance to improve the quality of estimates for those using remittance statistics.

 

Data methodology

The main source of remittance data today is the World Bank. These data are mainly derived from three IMF balance of payments components:

1. Personal transfers: All current transfers in cash or in kind received by resident households from non-resident households.
2. Compensation of employees: The earnings of workers residing abroad for less than 12 months, including the value of in-kind benefits.
3. Capital transfers: The wealth of individuals who move their residency from one country to another for a period of at least one year. Capital transfers capture two different types of transactions:
   i)    return home assets: the assets accumulated during their stay by non-residents returning to their home country; and
   ii)   change in residency status: individuals’ change of residence from one country to another, which, therefore, may not involve real financial flows.

 

Useful links

• International Transactions in Remittances: Guide for Compilers and Users (RCG) (pdf)
• Balance of Payment Manual and International Investment Position Manual (BPM6) (pdf)
• Global Remittances Working Group (GRWG)
• GRWG data thematic area

 

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