MANILA, Philippines – The government needs to put in place measures that would boost the local economy to lessen the country’s dependence on dollar remittances from overseas Filipino workers (OFWs).
Private think-tank IBON Foundation said the country’s dependence on exports, foreign capital and remittances make the Philippines very vulnerable to the current global financial turmoil.
“The onset of global financial and economic turmoil pushes the country into deeper crisis, especially since it is more dependent than it has ever been on exports, foreign capital (investments, debt and aid) and remittances. The country is going to be seriously affected particularly because the last decades of globalization policies have made the economy extremely vulnerable to external shocks and internally much weaker,” IBON said.
It said the situation that Filipino workers abroad are facing should be a wake-up call for government.
“While the administration has been criticized for its overdependence on remittances, it still places high hopes that the steady flow of OFW remittances will buffer the domestic economy. Such hopes may turn out misplaced as remittances and incomes of OFW households are at risk,” IBON said.
As of Jan. 31, this year, the Philippine Overseas Employment Administration (POEA) has reported that there have been 5,221 displaced OFWs in 15 countries who have returned home since the global economic downturn worsened in September 2008. The agency also listed more than 270 retrenched OFWs in five countries who are awaiting deployment because of establishment closures in their host countries.
IBON said there are also other less obvious risks for migrants. Prospects in seemingly less affected countries will also be poor in projects that involve US, Japanese and European investors — who are all grappling with domestic recessions and difficult financing conditions — or are aimed at US, Japanese and European consumers.
“The situation is a wake-up call for government which has mythologized overseas remittances as some kind of magic bullet for development,” IBON said.
Remittance sources are concentrated in just a few countries which are all facing varying degrees of economic difficulty, the think-tank said.
In 2008, the top 10 countries accounting for 88 percent of total remittances are the United States, Saudi Arabia, United Kingdom (UK), Italy, Canada, United Arab Emirates (UAE), Japan, Singapore, Hong Kong and Germany.–Iris C. Gonzales, Philippine Star