World Bank: OFW money shouldn't distract gov't policies

this story was taken from www.inq7money.net

World Bank: OFW money shouldn't distract gov't policies
Posted: 2:15 AM Dec. 03, 2005
Oliver Teves

THE PHILIPPINES should not rely on the remittances of more than eight million overseas Filipino workers to keep its economy afloat, the World Bank said Friday.

The Philippines recorded 11.6 billion dollars in remittances in 2004, making it the fifth largest recipient behind India, China, Mexico and France. The amount represented 13.5 percent of the country's gross domestic product, the largest in proportion to the domestic economy among the five countries, the World Bank said in a report.

"Over the years, excellent performance of remittances may have contributed to complacency in addressing fiscal deficits and low productivity growth," said the bank's country representative Joachim von Amsberg. "Remittances should not distract the country from its huge potential for domestic investment and growth."

Von Amsberg spoke to a group of journalists and economists about the bank's recent report, "Global Economic Prospects: The Economic Implications of Remittances and Migration," which urged countries not to view overseas employment as a "substitute for economic development in the origin country as ultimately, development depends on sound domestic economic policies."

President Gloria Macapagal-Arroyo's spokesman, Ignacio Bunye, has said the administration acknowledges sacrifices made by Filipinos seeking opportunities abroad but added that the government will continue "to look for ways to keep them home by aiming at a strong economy generating well-paying jobs."

The World Bank report said remittances worldwide have amounted to 232 billion dollars so far this year, of which developing countries like the Philippines accounted for 167 billion dollars--more than twice the foreign aid they have received.

Vera Songwe, a World Bank economist, said the remittances were so huge that they were slightly larger than the country's electronics exports, making Filipino workers "the largest export commodity."

Philippine Economic Planning Secretary Augusto Santos said that from January to September, overseas Filipinos sent home 7.9 billion dollars, up 27 percent from the same period last year.

Songwe also expressed concern over the increasing number of skilled workers taking on unskilled work overseas, resulting in a serious brain drain, particularly in the health and education sectors.

She said 1,000 private hospitals have been forced to close for lack of manpower over the past five years, and 6,000 doctors have shifted to nursing, which is in demand overseas. She added that 10,000 teachers have left for jobs abroad since 1988, and 32,000 teachers now work as maids in neighboring countries in Asia.