OFW remittances exceed RP farm output — study

The country’s huge dependence foreign remittances had reached an alarming level that money transfers has overtaken agricultural output as primary source of income in the rural areas, according to a private study.

Agriculture officials recently announced the lowest growth rate for the entire agriculture sector in nine years at 0.12 percent while remittances from overseas Filipinos continued to rise albeit slowly.

A policy brief by the nonprofit Institute for Migration and Development Issues (IMDI) said Filipinos working overseas have been plowing hard-earned incomes for their families whose income from traditional sources such as farming has declined.

The IMDI paper titled Rural Folk: Hard Up, So Some Leave, written by Ma. Cristina Gregorio and Jeremaiah Opiniano noted that two-thirds of overseas Filipinos —either contract workers, permanent residents or irregular migrants — come from rural Philippines, areas largely disregarded as hubs of hope and development.

The paper, however, stated what seems to be happening is that overseas migration “has made up for Philippine rural areas many shortcomings, even if not many residents from the countryside can afford to migrate overseas.”

Using estimates on incomes by overseas migrant families from government’s 2006 income and expenditures survey, 60 of 77 provinces had more overseas remittance incomes compared to the total economic output of provinces based on the incomes of local governments.

The income gap, which IMDI refers to as “an income buffer for rural areas,” is mind-boggling: P348.524 billion of migrant family incomes versus P50.482 billion in incomes by provincial local government units in 2006.

The policy brief also showed the growth rate of the overseas exodus of permanent and temporary migrants is better than the agricultural sector’s performance; and the P348.524 billion in income by migrant families in 2006 are at least twice more than all the loans handed out for agriculture and fishing of P93.228 billion.

The paper stated that since developed rural regions — especially those near Metro Manila — had more overseas migrants and more overseas remittances, overseas migration’s benefits have largely eased out poorer regions.

Rural regions with high underemployment and poverty incidence rates got lower money from abroad, government data which IMDI processed found.

“And since underemployment indicates low-paying, low quality jobs, the situation entraps many rural folk into poverty and makes these people unable to migrate overseas,” the IMDI paper noted.

Some economists, such as University of the Philippines School of Economics Dean Arsenio Balisacan, think that the poverty reduction feature of agriculture “had reached a dead end.”

At the same time, data from the Rural Poverty Report 2011 of the International Fund for Agricultural Development revealed the decades-old slump of Philippine agriculture: agriculture’s gross value-added as a percentage of the country’s gross domestic product dropped from 23 percent in 1988 to 14.9 percent in 2008.

A related IMDI policy paper, Harvests Coming from the Sea, stated that while overseas migration can be a boon or a bane to agriculture, the links between the overseas exodus with farming and fishing “have yet to be fully explored.” –Daily Tribune