It’s a quiet morning at the local arcade. The beauty parlor has just opened, but people are starting to fill it up. Not all of them are paying clients, though -- some have come to chat about the latest goings-on, probably on their way to the neighborhood courier/money transfer outlet or to the shop where there’s mobile phone “load.” Upstairs, the eatery selling lugaw, palabok, empanadas, budget rice meals, and a variety of viands is also starting to get busy, catering to people on their way to work.
This scene could be somewhere in Metro Manila, but it’s also in Blacktown in Western Sydney, home of the largest Filipino community in Australia. Where European settlers once took over from the aborigines, Filipinos are consolidating their own diaspora, which globally has reached some nine million.
 |
| Pinoy take-out at Blacktown City in western Sydney. Numbering 35,000, Pinoys are the biggest minority. |
Pinoy migrants are quite at home in this part of Australia, itself a nation built by migrants. They have a man at the city council, barrister Jess G. Diaz, the first-ever Filipino-Australian to get elected to such a post. Pinoy doctors, nurses, accountants, and shopkeepers have integrated very well, say city hall executives. “We have fiestas in Blacktown, processions, all sorts of things,” says the former mayor, Irish immigrant Charlie Lowles, who is married to a Filipina from Manjuyod, Negros Oriental. The same things are going on in other major urban centers of the world. Very recently, the Catholic archbishop of New York, Cardinal Timothy M. Dolan, had to succumb to pressure from Filipino-Americans over an unpopular decision to ban “Simbang Gabi” (Christmas novena masses) outside churches. Indeed, the diaspora has produced business owners, Youtube celebrities, sportsmen, and even White House chefs. Filipinos are in more than 200 countries, bringing with them their native cultures, values, work ethic, and religion, according to the nonprofit Institute for Migration and Development Issues.
The benefits to the Philippine economy are immense. In a country where one out of 10 are living or working abroad, overseas remittances -- some $20 billion annually -- are also a tenth of gross domestic product, buffering foreign reserves. Remittances in fact dwarf foreign direct investments and official development assistance. Money from workers abroad is fuelling the consumption-led domestic economy, supporting sectors such as banking, construction and real estate, education, and retail. Remittances have grown 25 times since 1987, while the domestic economy expanded 13 times during the same 25-year span. The Philippines is the fourth largest recipient of overseas remittances in the world after India, China, and Mexico according to the World Bank, and is the largest recipient in Southeast Asia.
One of BusinessWorld’s first stories reported that an average 42,155 workers were hired every month for land and sea-based jobs abroad in 1987. That year, a total of 449,271 workers were deployed for jobs overseas according to data from the Philippine Overseas Employment Administration, the government agency that regulates contract workers and expatriate labor. That number more than tripled to 1.47 million in 2010. Along with the expansion came the diversification of migrant worker destinations (from the Middle East and Hong Kong to tax havens such as the Cayman Islands and Malta) as well as occupations (from seamen and domestic helpers to information technology professionals and accountants).
What’s clear is that remittances have a stabilizing effect, no doubt saving the economy from the financial crises of 1997 and 2008. The year 1998 did see a huge 14% drop in remittances to $4.9 billion, but the following year recorded a 38% rebound to $6.8 billion, before sliding by 11% and 3.2% in 2000 and 2001. But given the porous nature of overseas migration, experts believe the real amount of remittance inflows is substantially higher than that reported by the Bangko Sentral ng Pilipinas, which uses data from reports of commercial banks, thrift banks, offshore banking units, and foreign exchange outfits. While Filipinos have increasingly been using formal channels (4,688 outlets in 2011) for remittances, informal “padala” channels remain, and no one has yet to put an aggregate dollar value to “balikbayan” boxes carrying what can be described as remittances-in-kind.
Interestingly, the 1997 Asian crisis showed that a weaker peso tended to encourage more remittances. Harvard-trained economist Dean Yang (a Filipino native who is an associate professor at the University of Michigan), in a 2006 paper, noted that a 10% increase in the foreign exchange rate yielded a 6% hike in remittances. And contrary to popular belief, he found, using household-level data, that “These positive income shocks lead to enhanced human capital accumulation and entrepreneurship in migrants’ origin households. Child schooling and educational expenditure rise, while child labor falls. In the area of entrepreneurship, households raise hours worked in self-employment, and become more likely to start relatively capital-intensive household enterprises.”
Since 2002, remittances haven’t looked back, growing by double-digits well into 2008. But instead of plunging amid volatility in global financial markets as well as political unrest and economic woes in migrant destinations, crisis remittances have only grown -- 5.6% in 2009 and 8.2% in 2010. The World Bank noted that “demand for overseas Filipino workers (OFWs) has remained remarkably stable,” citing preliminary data that showed OFW deployments increased by nearly 20% between 2008 and 2010 “during a time of global economic crisis.” It added: “The deployment of seafarers, who account for one-quarter of overall OFW deployments, increased by about 33% between 2008 and 2010 and is expected to increase by a further 15% in 2011. The rise in seafarers and the increasing diversification of Filipino migrant destinations has provided resilience to remittances.” While labor indigenization programs in Saudi Arabia and the Gulf region are a growing concern, they “may not affect remittances in the near term.”
The year 2014 marks the 40th year of the formalization of the labor export policy of the Marcos regime as a solution to chronic unemployment, notes Jeremaiah M. Opiniano, head of the Institute for Migration and Development Issues. “Contexts to this phenomenon have to be put in perspective here. One is macro-economic performance. In the run-up to the 40th anniversary of labor export, the Philippine economy can be considered a ‘boom-and-bust’ economy. Agriculture productivity is declining, the manufacturing sector has stagnated, and services is the primary engine of growth,” he tells BusinessWorld.
Unemployment has hovered at around a tenth of the labor force since 1987 while the underemployed are around a fifth of the employed. But take note of the National Statistic’s Office’s definition of the “employed”: those “at work” are people “who do any work even for one hour during the reference period for pay or profit, or work without pay on the farm or business enterprise operated by a member of the same household related by blood, marriage or adoption.” This covers those who “worked without pay on own family-operated farm or business” -- “members of the family who assist another member in the operation of the family farm or business enterprise and who do not receive any wage or salary for their work.”
“Employment remains the crux of overseas mobility as a forced option. Even if the government’s labor statisticians have modified the definitions of unemployment and underemployment (to conform with standards of the International Labor Organization), unemployment remains high -- and underemployment is a bigger threat (the latter being an indicator of poor quality, unstable, vulnerable jobs),” Mr. Opiniano explains. “Migration is also a function of the conditions in developed countries (e.g. low birth rates, need for foreign labor), globalization (e.g. easier and faster modes of transport, technology), and even migrants’ networks (e.g. Filipinos from a certain rural hometown all in a host country, pulling townmates and relatives to join them elsewhere). It might be difficult to pull the plug, especially for an economy whose major sources of dollars are Filipino sweat and endurance to difficult working conditions,” he adds.
The moral hazards of the migration phenomenon are well-known. “This has led to the things that many Filipinos know when it comes to overseas Filipinos: family-related issues (the most prominent ‘social cost of migration’); brain drain in some identified economic sectors, but all operating in a country with surplus labor; more consumption that has induced demand for investments; and a micro- (family) and macro- (economy-wide, e.g. labor, foreign reserve requirements) level dependence on the overseas migration phenomenon,” Mr. Opiniano points out. In the foreign service, countries with the heaviest concentration of OFWs are considered hardship posts, with Filipino diplomats having to deal with victims of abuse, contract-dodgers, and those with criminal cases ranging from petty theft to drug-dealing.
In a 2007 study that attracted local and foreign media attention, University of Santo Tomas economist Alvin P. Ang highlighted that not only is migration not solving the unemployment problem, it is also feeding inequality. “Money from overseas workers is fueling the divide between urban and rural areas and remittances tend to benefit the country’s affluent regions, leaving poorer regions behind and worsening inequality,” BusinessWorld reported. It “confirmed the worrisome phenomenon of agricultural workers leaving the farms to join industries in more developed regions and wait for the opportunity to become OFWs themselves.”
The more OFWs sent per region, the lower the percentage of workers in the farm sector. “First,” the BusinessWorld report said, “regions that have sent workers abroad (Ilocos, Central and Southern Luzon, Western Visayas, Davao, and Metro Manila) are the ones that are urbanized and have lower poverty rates. One conclusion is that those who are going abroad to work or migrate are not poor … The problem, however, is that the same urban centers tend to corner the bulk of OFW money, and since remittances are ‘private flows’ and sent for very specific personal purposes, it takes a longer time for the economic benefits to reach the poor.”
“Unfortunately, the economic ‘addiction’ to migration persists,” notes Mr. Opiniano. “The problem is the Philippines’ inability to fast-track economic growth in aid of overseas migration. Migration can never be the primary source of Philippine growth,” he adds. Mr. Ang, meanwhile, warns that for now, migration is “irreversible.” Both however believe that the Philippines can benefit from a “diasporic dividend” by harnessing the benefits of overseas migration to generate jobs and higher levels of savings and investments.
“In the past 10 years, the advocacy is to harness the remittances from abroad and truly see migration feeding into a macro-economic transformation -- more jobs courtesy of up-scaled micro and small enterprises and of a reinvigorated agriculture and manufacturing sector. The 2011-2012 Philippine Development Plan has already made a policy to train Filipinos abroad financially so that they place savings and investments, and set up enterprises,” Mr. Opiniano says. The problem, he says, is that the Philippine financial sector has a “high degree of conservatism” and all the money goes to Metro Manila, including overseas remittances sent to rural areas. “Overseas Filipinos are ‘fertile entrepreneurs.’ They have the money, are dying to go into business, and they are all coming home. But if rural areas still do not have the credit access for them, these entrepreneurs will be left to fend for themselves -- with their overseas savings, of whatever that is left,” Mr. Opiniano argues.
To reap the “diasporic dividend,” there must be a strategy to harness migrants’ monetary and non-monetary resources (like skills acquired abroad, talents, connections in overseas countries) for entrepreneurship and investment, he says. “These migrants are ripe for the taking when it comes to using their resources productively. Even while abroad, their nationalism may even motivate them to invest back home.” With two-thirds of overseas Filipinos coming from rural areas, there should also be a focus on the hometown -- something mall owners like Henry Sy and John Gokongwei have recognized. Channeling remittances to agriculture, Mr. Opiniano says, will also help make a dent on poverty and inequality.
The idea is to “tickle the desires of overseas Filipinos to help their motherland,” he says. “They have been donating to development causes for the longest time. And overseas, loneliness during work and stay elsewhere made them philanthropic. The biggest source of philanthropic resources is not the accumulated CSR (corporate social responsibility) funds of the wealthy companies, sorry, but the accumulated small donations of overseas Filipinos.”
From the book "Looking Back, Moving Forward: 25 Years of BusinessWorld"
No comments:
Post a Comment