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As Philippines rebuilds, family overseas will play a key role

While aid organizations rush to areas of the Philippines devastated by Typhoon Haiyan, experts say Filipino emigrants around the world are already scraping together whatever extra money they have as well – and those efforts could prove crucial to recovery.

The money families send home to Filipino relatives – known as remittances – is already a key part of the nation’s economy, contributing tens of billions of dollars to its GDP. Now that disaster has struck, many expect those remittances to grow as emigrants do everything they can to get money to loved ones in need of food, clothing, shelter and water.

“In times of natural disaster, remittances are one of the first forms of help that rushes in,” said Dilip Ratha, manager of migration and remittances for the World Bank’s development prospects group.

The tragic frustration: actually getting help in the hands of loved ones quickly in areas where power is scarce and looting is rampant.

“We want to do that when we can, but there’s no place to send the money to right now,” said Paul Barton, whose wife, Maribel, lost two sisters, three nieces and two nephews when Typhoon Haiyan hit Maribel’s hometown of Tacloban, destroying at least 70 percent of the structures in the area.

As the close-knit family grieves, they also are working desperately to figure out how to get money and help to the surviving members of their family, whom they fear are stranded with thousands of other survivors in hard-hit Tacloban.

Even before the typhoon hit, the World Bank estimated that remittances would contribute about $26 billion to the Filipino economy in 2013, which accounts for about 10 percent of the nation’s total GDP.

“Remittances have a huge impact in the Philippines,” said Murray Hiebert, deputy director in the Southeast Asia program at the Center for Strategic and International Studies, a think tank.

Such payments from family members abroad are such a key part of the economy because the Philippines has a rapidly growing population of relatively educated people, but few good job prospects, explained Josh Kurlantzick, senior fellow for Southeast Asia with the Council on Foreign Relations. That means many Filipinos travel abroad — to countries including the United States, Saudi Arabia, Hong Kong, Canada and elsewhere — in search of work.

Once overseas, experts say it’s common for devoted family members to send as much money as they can back home, for everything from basic needs like food and shelter to help in starting a small business.

When disaster strikes, Ratha said even domestic workers who make little money will often try to send even more money as quickly as they can — even if that means borrowing from friends or employers, or selling possessions. When the 2010 earthquake struck in Haiti, another country that is heavily dependent on remittances, the World Bank estimated that remittances would surge by 20 percent because of the disaster.

The cash those family members send can be a lifeline in a crisis. That’s why Ratha thinks it’s important, in times of disaster, to think not just about getting food and water to the region, but also about making sure there is safe access to banking institutions.

“Remittances (are) almost the first form of help that arrives, and yet we don’t think about providing remittance services — access to remittance services — as a component of our relief response,” Ratha said.

Maribel Barton, back row, third from left, poses with family and friends during a a visit she took with her parents to the Philippines in January.
Maribel Barton, back row, third from left, poses with family and friends during a a visit she took with her parents to the Philippines in January. Seven of Maribel's family members, including some pictured here, perished when the typhoon struck her hometown of Tacloban.Barton family

Maribel and Paul Barton, who live with their three children in Kapolei, Hawaii, were wrestling with that conundrum. The couple has long helped their Filipino relatives with everything from basic needs to larger expenses. They once paid for a nephew’s ear surgery.

When news of the disaster struck, Paul said friends immediately offered to help with cash donations. But with widespread power outages and reports of looting, Paul said they are unsure of how to get money securely to their family.

Meanwhile, Maribel and her parents, who also now live in the United States, were overcome with grief for their loved ones. Despite the thousands of miles separating them, they remain extremely close.

Maribel said she typically talks to her family in the Philippines almost every night. Sometimes, they’ve even set a place for a family member at the dinner table and then set up an iPad so they could virtually share a family meal.

On the night of the typhoon, Maribel said her family left their home because they were afraid the roof would collapse. They took shelter in a motel, taking pictures and posting them on Facebook.

Maribel was talking to one of her sisters on the phone as the raging storm grew worse.

“The very last thing her sister said was, ‘Mana, I’m really scared,’ ” Paul said.

Then, the connection went dead.

Through news reports, Maribel and Paul watched as the landmarks they knew so well — including the hotel where they had spent their honeymoon, and a resort where they had stayed during a later visit — were devastated by the typhoon.

The good news was that Maribel’s brother, two nephews and one niece had likely survived. But the family home was destroyed and details were murky. That’s left the Bartons worried about whether they have access to food, water and medical help.

“We know they survived but we don’t know where they are, and our focus right now is trying to get them out of there,” Paul said.

Allison Linn is a reporter at CNBC. Follow her on Twitter @allisondlinn or send her an e-mail.

CORRECTS: Based on revised data from The World Bank, this version corrects figure for percentage of total GDP accounted for by remittances.