Despite newfound purchasing power, Filipino migrant workers are likely to remain abroad, writes Edwin Espajo, in Manila
They are the country’s largely unsung modern day heroes. Without them, the Philippine economy would have collapsed when recession hit the United States and other western economies six or seven years ago.
What kept the country’s fragile economy were the remittances of overseas Filipino workers (OFWs) and residents who, in 2012, sent home US$23.8 billion of their personal income – up 6.4 percent from previous record high of US$21 billion in 2011. The Bangko Sentral ng Pilipinas (BSP) said the 2012 OFW cash remittances represented 8.5 percent of the country’s Gross Domestic Product (GDP).
Filipino workers return home from foreign countries.
Not surprisingly, the bulk of these remittances came from the United States. Between January and April 2012, Filipinos in the US sent home US$2.74 billion of the US$6.54 billion remittances representing a hefty 42 percent of the total for the period.
Remittances in the first four months of this year have already reached US$6.92 billion, an increase of 5.7 percent over the same period in 2012.
Other primary sources of Filipino remittances last year are Canada (9.2 percent), Saudi Arabia (8.1), United Kingdom (5), Japan (4.7), United Arab Emirates (4.5) and Singapore (4.1).
Philippine officials said remittances are likely to grow as demand for Filipino skilled and unskilled workers continue to grow, particularly in the Middle East.
According the Philippine Overseas Employment Administration (POEA), 10 to 11 percent of the population, or roughly 12.5 million Filipinos, are currently residing or working abroad. More than 2.2 million of these Filipinos are considered overseas workers, according to the National Statistics Office.
In 2010, the Philippines ranked 4th in remittances in the world, topped only by India, China and Mexico.
But among members of the Association of Southeast Asean Nation (ASEAN), the Philippines is number one in terms of value of remittances in relation to GDP, at 10.73 percent in 2010. That year, the total remittances by overseas Filipino workers hit US$21.43 billion, more than 40 percent of the projected BSP gross international reserve (GIR) for 2010 and 25 percent of the country’s foreign exchange reserves.
More than anything else, OFW remittances have also provided the country the insulation against the economic crises that hit the Asian financial system in 1997. It provided a silver lining to the collapse of many banks in Asia as OFWs found more value to their hard earned pay abroad when the Philippine peso took a beating in the foreign exchange market. Filipino OFWs and Philippine exporters found themselves enjoying windfall profit in the sharp devaluation of the Philippine peso from P25 to a dollar to P47:US$1.
Modern day diaspora
Growing poverty in the countryside is the primary reason behind the modern day Filipino diaspora.
What started as a temporary measure to stave off unemployment in the Philippines when the 1973 oil crisis shocked the world, sending Filipino contract workers soon became a government policy it could no longer reverse. The wave of OFW exodus started in the 1980s when the Philippine economy shrunk by 10 percent under the Marcos dictatorship. Local unemployment soared and working abroad presented Filipinos opportunity to escape poverty.
More than 30 years later, the demographics of Filipino overseas workers have dramatically changed. Whereas it was dominated by female workers working largely as domestic helps in the Middle East before, today’s OFWs are more diverse, more spread out and now cut across sexes, age groups and regional distribution.
The bulk of OFW comes from the 25-39 age brackets with close to 62.3 percent of the totals in the years 2008-2010. The ratio of men and women workers abroad has also evened up with 1.09 male workers for every female worker of 1,986,000 million OFWs in 2010 based on figures by NSO.
OFWs are categorized into skilled and unskilled types. The bulk of unskilled workers (32.7 percent of the 2011 figure of 2.16 million OFWs) end up as domestic helps and laborers, mostly in Middle East and prosperous Asian countries such as Hong Kong, Singapore and Malaysia.
|Occupation Group||Percentage of OFWs|
|Laborers and unskilled workers||32.70|
|Service workers and shop and market sales workers||15.50|
|Plant and machine operators and assemblers||13.60|
|Trade and related workers||12.80|
|Technicians and associate professionals||6.00|
|Officials of government and special-interest organizations corporate executive,
managers, managing proprietors and supervisors
|Farmers, forestry workers and fishermen||0.40|
Source: Philippine National Statistics Coordinating Board
They are also going to countries never before have been traditional destinations for Filipino migrant workers.
The country’s first director of the National Economic and Development Authority, Gerardo Sicat, said he was surprised to hear the Philippine national anthem in Uganda in the 1990s at about the same time a fellow University of the Philippines professor found out that Filipino contract workers were already in sub-zero Antartica where the latter was doing a research.
Behind the silver lining
Many OFWs have found employment abroad as permanent source of income. A handful has gotten lucky like a Filipina nurse who inherited US$33 million from American heiress Huguette Clark in 2011. A Filipina maid also inherited US$4 million from her Singaporean employer.
Not all Filipino migrant worker stories end in fairy tale, however.
Recently, the Department of Foreign Affairs ordered 3 embassy staff in the Middle East to go home amid allegations they are running a “prostitution ring” and subjecting stranded Filipina workers to sexual abuse.
Accounts of rape and physical abuse by employers have attended the lives of female OFWs and accounts of infidelity by both overseas workers and partners left behind have left many families broken and dysfunctional.
The Overseas Workers’ Welfare Administration (OWWA) said it gets about 500 complaints every month involving families whose OFW breadwinners have stopped sending money to them.
“Majority of those who are not sending their remittances are male OFWs and the usual reason is that they are having extra-marital affairs,” Gloria Taule of the OWWA Workers’ Assistance Unit (WAU) told the Arab News in 2007.
Loneliness oftentimes also results in tragedy as in the celebrated case of Flor Contemplacion who was hanged in Singapore for the death of a fellow Filipino domestic helper in 1995. Filipino laborer Joselito Zapanta was spared execution in March this year after Saudi Arabia King Abdullah granted him a reprieve. He however has to raise US$1 million ‘blood money’ in 3 months to avert execution. Zapanta was sentenced to death by a Saudi court after he beheaded his Sudanese landlord. Earlier, in February, Rodelio Celestino Lanuza was freed after languishing in Saudi jail for more than a decade and only after paying 3 million riyals (US$800,000).
Hundreds more of maid overseas workers, some of them Filipinas, are believed to be in death rows in many Middle East prisons for various crimes and violations committed in their host countries.
Of course, these do not include OFWs who are enticed with big salaries only to end up receiving far less what they are promised aside from those victimized outright by illegal recruiters.
The plight of OFW abroad has also torn them apart from their home country’s body politic and foreign relations.
The office of the left-leaning Migrante in the Middle East cautioned the Philippine government to ‘go slow’ and avoid unnecessary remarks against Taiwan during the height of the row between two neighboring countries last May.
On May 9, a 65-year old Taiwanese fisherman named Hung Shih-Cheng was killed when members of the Philippine Coast Guard fired at a Taiwanese fishing vessel well inside the exclusive economic zone of the Philippines.
John Leonrd Monterona, vice chair of Migrante, said unnecessary statements would only stir controversies and muddle the issue. He said it will also invite “more troubles to OFWs in Taiwan.”
Some 85,000 Filipinos are living and working in Taiwan.
Another left-leaning organization, Bagong Alyansang Makabayan (Bayan), however, warned the Aquino government against being coaxed into entering a bilateral fishing agreement with Taiwan after the latter suspended hiring of Filipino contract workers in the aftermath of the shooting incident.
Monterona has also warned of reverse migration of OFWs following Saudi Arabia’s decision to cleanse the ranks of migrant workers from illegal and overstaying overseas workers and the implementation of the Kingdom’s Nitaqat law, “which strictly requires the hiring of its own nationals over foreign workers.”
Monterona said many Filipino migrant workers will be forced to opt to go home where majority of them could end up unemployed.
He said some 120,000 will be affected by the new Saudi law, including undocumented Filipinos whose number could reach as high as 28,000.
Where is the beef?
Monterona’s fears are not unfounded.
Despite a spectacular 7.8 percent GDP increase in the first quarter of 2013, official unemployment figure remain high at 7.5 percent or equivalent to 3.08 million of the country’s 37.82 million workforce.
Government officials blamed ‘extreme weather conditions’ which led to the loss of 624,000 workers in agriculture-related services. Incidentally, majority of Filipino overseas workers came from predominantly agricultural provinces where poverty is more pronounced. Poverty incidence in the country remains high at an average 21 percent of the population between 2003 and 2009 despite the steadily increasing influx of remittances over the same period.
While remittances from OFWs have contributed to the growth of Philippine economy, it is interesting to study if the living conditions of OFW families have significantly improved.
Over the last five years, OFW families have undoubtedly increased their spending capacities and purchasing power of their income. It is no coincidence that the country’s biggest mall operators are also making their presence felt in regional centers where there is heavy concentration of OFWs.
But the increase in OFW deployment also coincided with the steady drop in agricultural productivity.
Could it be that families are now just waiting for a member to work abroad rather than engage in productive farming?
No end in sight
In a study by Alvin P. Ang of the Social Research Center of the University of Santo Tomas, it is also quite revealing that Filipino migrant workers lack the entrepreneurial network common in Southeast Asian nations.
Ang said Filipino OFWs tend to invest in franchising as seen in food cart business.
He said this “may be more worrisome” if the trend remains unchecked.
“They will lead to the urban higher income members of society enjoying the benefits from the hard work sent remittance of the lower income majority,” he added.
Ang further said remittances have to be translated to “value-added activities and investments which are more foundational sources of development and growth.”
OFWs have also to live with the big question whether economic and material gains outweigh the social costs of seeking greener pastures abroad. Or they will leave behind irreparable damage to the Filipino family fabric and shatter the ties that bind the Filipino family together.
With uncertainty over the local economy’s ability to sustain rapid statistical growth and with no new jobs being created despite it, OFWs would rather that they remain abroad where they are assured of steady income to send to their families back home.
There is no sign that this outlook among OFWs will not remain and there is no telling when the government will finally lay down the foundation for them to line up for reverse migration that had led other countries like Korea and Malaysia to economic prosperity.