Remittances

With about 12 million overseas workers the Philippines qualifies as a case study in mobility of labor. Of course it is not only the Philippines that exports skilled labor all over the world—the value of remittances in 2008 included the following top five countries: India, $45 billion; China, $34 billion; Mexico, $26 billion; Philippines, $18 billion; and Poland, $11 billion. Clearly the international remittance business is a big one with the top five countries alone channeling at least $ 134 billion annually. Of course the Filipino banks are already wising up to this particularly as the cost of transactions, i.e., sending remittances home can be anywhere between 10 percent and 25 percent of the value remitted.

But this is not about remittances. It’s about people—labor leaving their home countries to seek work abroad, usually because opportunities are seen as better overseas. The free movement of labor makes for greater efficiency as well as providing the chance of more equitable employment options for people. The European Union has passed several laws and regulations on the subject allowing freedom of labor movement and employment between the 23 member states. There are however at least to my knowledge no labor unions catering to the needs of migrant workers. Frequently we hear of Filipinos arrested for claimed infractions against foreign laws, the latest case a group of people having a mixed party in Saudi Arabia.

The lot of the overseas worker is often not a particularly happy one (unless you happen to be a senior manager for a multinational on an overseas expatriate posting). Frequently the jobs available are those that the nationals of the countries hosting the worker don’t want to do themselves. The OFW takes the opportunity to undertake work, which the locals don’t like to do because there is a local “skill shortage,” and gets the chance to earn more money than he would at home. Being an OFW is a risky business, there are cultural issues to be faced, notably drinking and associating with the opposite sex in Muslim countries, sharia laws as well as the regular law. There is potential for mistreatment and abuse by employers who because they are nationals of the host country will usually have the benefit of the doubt if an issue arises. OFW accommodation can often be of poor quality and frequently migrant workers are looked down upon as some sort of “underclass.” On top of all this is the fact that the migrant worker is away from home and family, basically just working the contract to earn money so that the dependants back home can have a better life—yes, they are stars. It’s just a pity particularly for the Philippines as well as the “stars” themselves that they don’t have the opportunity to earn a decent living at home. OFWs are a good source of foreign exchange and their remittances add billions to the economy. It was President Marcos who started the movement here in the Philippines for just that reason, to boost the domestic economy by encouraging Filipinos to look for work overseas—it’s a dodge, its an excuse for not being able to get it right here in the Philippines. An increase in the number of OFWs is a reflection of an unsatisfactory economy here; the more OFWs the worse the domestic economy. So long as the number of OFWs keeps up and growing then the less incentive there is to change things in the Philippines. Other countries will provide the employment and income generating opportunities for Filipinos, that the Philippines cannot.

The remittance figures above tell the story—India which has two and a half times the Philippine remittances has more than 10 times the population, China about two times Philippine remittances also has over 10 times the Philippines population. If there were the same proportion of Indians who had to go overseas to find opportunity, as there are Filipinos then you would see 125 million Indians working overseas. The world economy couldn’t handle labor migration on such a scale. The Philippines seems to get the prize for the country with the largest proportion of its population unable to capture adequate opportunity at home—better do something about it! –Mike Wootton, Manila Times

Mike can be e-mailed at mawoot ton@gmail.com.