Study: RP diaspora widens poverty gap
Billions of dollars in remittances by its huge overseas work force are lifting many areas of the Philippines out of poverty but millions more are being left behind, according to a study obtained by Agence France Presse Thursday.
Manila and five other regions that account for most of the labor exports also have the country's lowest poverty levels, and five of these areas showed significant drops in poverty levels between 2000 and 2003, said the paper by University of Santo Tomas professor Alvin Ang.
However, poverty levels increased to between 34 percent to 49 percent in those regions where labor export is not a principal preoccupation, the study said, citing government data.
The government estimates 30 percent of the Philippine population are poor. But World Bank data show nearly 40 percent of Filipinos live on two dollars a day or less.
Ang's paper said the results support the hypothesis "that those who are migrating and working abroad are not poor" and that the remittances, which reached a record 10.7 billion dollars in 2005, "have multiplier effects in terms of education, health, housing, (and) entrepreneurship" among others.
However, "instead of levelling the regional poverty levels, it probably contributes to its worsening" in areas where workers do not have the proper skills as well as the resources to move overseas.
The Philippines started large-scale exports of construction workers and seamen in the 1970s amid a building boom in the oil-soaked Middle East.
Ang said deployments shifted in favor of lower-skilled service workers, including domestics, with the emergence of the so-called "tiger" economies of Asia by the late 1980s.
Since the 1990s, the information technology revolution and the graying populations of much of the developed world opened up job opportunities for highly-skilled Filipino professionals and technical workers.
He said this raised the per capita annual remittance levels by more than 500 percent to nearly 11,000 dollars in 2005 compared to about 2,000 dollars in 1988.
Since most of the migrating workers "are from relatively affluent regions, they may be worsening inequality among regions," Ang concluded.
He also raised concern that the remittance money flows "are causing sharp declines in agricultural production" because "it seems that labor would rather wait for the opportunity to (work abroad) than work in the farms."
He also said the huge capital flow "have yet to be translated to value-added activities and investments which are more foundational sources of development and growth."
The bulk of the remittance money appear to be sucked into consumer spending that has spurred the rise of giant shopping malls across the country, he added. AFP
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