Balikbayani findings: OFW-managed enterprises tend to fail

Press Release

Balikbayani findings
OFW-managed enterprises tend to fail
Villy Cabuag
OFW Journalism Consortium

For more than a decade, Ricardo Munoz received letters with enclosed pictures and cash every Christmas from his wife who was working in Beirut, Lebanon.

His wife, who had worked her way up to hotel supervisor of a five-star hotel, virtually supported the family as Ricardo had no permanent employment. Although he managed their half-hectare farm in Bicol, he could hardly support the daily needs of their two children.

When she reached her prime, Ricardo's wife had little choice but to return home. Armed with a plan to establish a good enterprise of their own with a reasonable amount of money, the couple invested their savings in real estate and established a sari-sari store in the community.

But when the Asian financial crisis struck the Philippines in mid-1998, the realty sector was heavily affected and most firms postponed their expansion plans. The problem left the Munoz family wondering about their next move since the sari-sari store was also in danger of closing due to financial problems.

The Munoz family is just one of many families of overseas Filipino workers who realized the dream of their migrant worker returning to hearth and home, except that this family's story has a sad ending since they have to start all over again. Their migrant worker, Ricardo's wife, will most probably have to go abroad again.

70 per cent fail
According to a heretofore unpublished research of a non-government organization, 70 percent of the enterprises established by former migrant workers go bankrupt due to lack of planning and management skills.

In a paper to be presented at a conference in April, Balikabayani Foundation, Inc., says that while business possibilities for some seven million OFWs are endless, capacity-building for aspiring OFW entrepreneurs are rarely addressed, causing their enterprises to collapse in the end.

"If they really want to have a business, they should first learn how to manage an enterprise while they are working abroad. You cannot learn it overnight. But the problem is when they return home with so much capital, they have to decide at a shortest possible time or else it will be spent
on some other things," said Balikabayani executive director Mai Anonuevo.

In her paper, "Social Cost of Migration and Possibilities for Reintegration," Anonuevo presents the findings in the NGO's yearlong research funded by the Canadian International Development Fund. Her paper will be presented at a conference on the same topic co-sponsored by the Overseas Workers' Welfare Administration on April 12-13 in Manila.

Interviewed during a break from her studies on Social Enterprise Development at the Asian Institute of Management in Makati, Anonuevo said the conference affirms the potential of OFWs as investors and not only as sources of remittances that go mostly to the purchase of consumer items.

Changing values and attitudes
The task is not simply teaching returning OFWs how to save or be prudent with spending their hard-earned money but to change the values and attitudes of the migrants, Anunuevo said. This is why there should be more social entrepreneurs to help them work out the complications of having a business.

"Of course there is no such as a sure shot thing. Business will always be business but if you can lessen the (probability) of failure by studying the investment procedures, then it can be a great factor," she said.

Among the factors contributing to the success of the 30 percent of OFW families whose businesses have succeeded are: a relative who knows capital management and the fact that other family members are not solely depend on the earnings of the migrant worker. Value formation of both the OFW and family, which can take time, also matters.

As part of its service to OFWs, Balikbayani is training migrant workers in Hong Kong to become social entrepreneurs. It operates a multi-service center which offers various services such as video conferencing, remittance service, order-regalo (gift), among others, for Filipino migrant workers. In the long run, says Anonuevo, the center will be turned over to migrants to manage and own and who will be expected to train other Filipino workers to replace them, if they decide to go home.

Currently, there are still no success stories to tell since Balikabayani is still studying what type of investment scheme would be best for returning migrant workers. It is also planning to offer its services in other places which have heavy concentrations of OFWs.- OFW Journalism Consortium