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| By Cher Jimenez |
| Reporter |
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| The exodus of Filipinos abroad not only benefits the country in terms of remittances that help keep the economy afloat but it has also cushioned the impact of a population boom, according to the Commission on Population (Popcom). “If one partner is working overseas, it is possible that the couple are practicing a longer birth spacing because the contract worker is anticipating going back to the host country. Although there is yet to have a concrete study on this, we can infer that this is what is happening,” Tomas Osias, Popcom’s executive director, told reporters. This theory on the relationship among migration, population and development would be discussed in Popcom’s incoming 4th State of the Philippine Population Report (SPPR), which will be presented in the middle of this year. The project, Popcom’s first attempt to establish the linkages between the exodus of Overseas Filipino Workers (OFW) and the demographic bonus, gathers data from government and the private sector and analyzes the consequences of international migration from a population and development perspective. “What the Popcom provided here are inferences, and not final and definitive purviews about specific international migration issues that are also population and development concerns. We also recognize the Philippine and global demography have not looked at international migration that much, yet we believe [the report] is our small yet meaningful contribution to demography,” noted Osias. In the recently released State of the World Population Report of the United Nations Population Fund (UNFPA), the issue of migration and the challenges and risks faced by both documented and undocumented workers were brought to the fore. Osias estimates that the diaspora of contract workers has eased the country’s fertility rate because of the feminization of migration since women are estimated to outnumber OFW men. “It is possible that increasing female migration by temporary contract workers and immigrants might have mitigated a population explosion. Since [women] will practice longer birth spacing and will not bear additional burdens while abroad, and since the children of Filipino permanent residents abroad are part of the populations of host countries, international migration might have somewhat managed population growth in the Philippines,” he said. With a 2.36-percent growth rate or 2 million babies being born every year, the Philippines is ranked the 12th most populous nation in the world and this could have been worse if not for the country’s labor migration policy which has been in effect for 32 years now, said the Popcom official. But while the diaspora is advantageous at keeping the fertility rate at bay, the report warns of the various social costs of labor migration not only among OFW families but in the national economy as well. |
Saturday, April 28, 2007
OFWs helping control population growth
Banks keep remittance costs steady
By Des Ferriols
The Philippine Star 03/06/2007
Despite huge outlays for technology and service upgrades, the Bangko Sentral ng Pilipinas (BSP) said banks were able to keep remittance costs steady in 2006.
The BSP conducted a survey of top Philippine remitting banks and the results indicate that remittance charges in 2006 have not changed the prices in 2005. compared to
According to BSP Governor Amando M. Tetangco Jr., remittance costs had gone down dramatically in 2005 compared with 2000 levels and banks have generally been able to keep these rates steady last year.
"The banks further noted that service fees could have been higher because of investments in infrastructure and automation, as well as continuing enhancement of products and services," Tetangco said.
However, Tetangco said remittance charges were kept steady because the costs of building the infrastructure and enhancing services were not passed on to the banks' customers.
According to Tetangco, overseas Filipino workers also benefited from the improvements in the country's payments and settlements systems, such as the full interconnection of the three major automated teller machine (ATM) networks.
"As bank clients, OFWs likewise benefited from the approval of alternative mechanisms for sending applications for remittances, money, such as SMS-based " he said.
The interconnection of the three networks, Tetangco said, reduced the cost of transactions since it eliminated fees associated with the use of international "switch" to connect the three networks.
Tetangco said the BSP's grant of authority for rural banks to operate as foreign currency deposit units (FCDUs) is expected to promote the efficient and speedy transfer of funds to beneficiaries in areas which are mainly served by rural banks.
"This would also give OFWs the option to keep their savings in the form of FCDs exchanging their earnings for pesos, instead of immediately " he said.
According to Tetangco, the BSP was also drafting a circular that would standardize identification requirements of banks to customers in order to facilitate access to the services of financial institutions in remote areas while ensuring compliance with Anti-Money Laundering Act (AMLA) regulations.
Tetangco said the BSP was undertaking further financial literacy campaigns (FLCs) to help channel remittances to development activities and inform OFWs alternative opportunities for their remittances, such as placements in financial investments in business ventures. instruments and
"The BSP recognizes the valuable contribution of OFWs in expanding the foreign exchange available for meeting the economy's requirements," Tetangco said.
BSP rues scuttling of OFW bonds sale
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| By Jun Vallecera |
| Reporter |
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| THE flow of remittances from overseas Filipino workers surged past the $1-billion mark for the ninth month in a series, totaling $1.1 billion in January. The strong flow raised the likelihood of the full-year number to lift by at least 10 percent to around $14 billion and escalating the need to find practical uses for that much money sloshing around, its vast economic potential untapped. Last year’s OFW flows totaled $12.7 billion, but that much money was not of much use either, as the plan to sell a remittance-backed bond for the exclusive benefit of OFWs and their families was scrapped. Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the aborted bond sale would have made available an attractive investment option for OFWs likely to spend hard-earned money on consumer goods. Less than half of all OFW families set aside a portion of their money as savings and those that actually take the trouble to do so do not know where to invest that money for maximum economic impact. Tetangco said had counterparts in government listened to them one or two years earlier when they first saw the uptrend in OFW remittances, some form of investment instrument could have been in place by now, benefiting not just OFWs and their families but the entire economy as well. “But that was then, when interest rates were higher, making the bonds potentially more attractive to investors,” he said of the missed chance. Domestic interest rates at present stand at some 3 percent, give or take a few percentage points—not enough incentive considering that inflation stood at 2.6 percent a month ago. Tetangco traced the one-billion-dollar level-busting remittance flow to the aggressive marketing efforts of banks and money transfer agents that provided OFWs greater access to financial services that were not possible before. He noted there was even a drop in OFW deployment in January, with data from the Philippine Overseas Employment Administration showing only a deployment of 96,359 or 7.1 percent lower from year ago level. “Both the number of land-based and sea-based workers contracted by 3.4 percent and 21.1 percent to 79,408 and 16,951, respectively,” Tetangco said. Still, the remittances grew because the deployed OFWs were better skilled than their predecessors and better paid that ever before, he added. The deployment of skilled Filipinos was seen to rise in the months ahead as these workers train for employment in high-end jobs in the field of information technology, telecommunications and tourism, among others, Tetangco said. |
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http://www.businessmirror.com.ph/0316&172007/headlines02.html
OFW bank to raise P1.2 B from Tier 2 capitalization plan
| OFW bank to raise P1.2 B from Tier 2 capitalization plan |
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Land Bank and the DBP was supposed to put in P350 million each to "initiate" the bankʼs fund raising ventures. Bank president and CEO Rolando L. Macasaet said these were just "exploratory talks". In the meantime, he said his board of directors has yet to approve of the Tier 2 plan, but he is hoping to raise the capital in the next six months to a year to fully operate as a government bank for fund transfers and migrantʼs remittances. Postal Bank is overhauling its finances and operations to become a state-owned OFW (overseas Filipino workersʼ) Bank. The Bangko Sentral ng Pilipinas recently granted it an FCDU (foreign currency deposit unit) license to allow it to accept dollar deposits. To access a global network for its planned remittances business, Postal Bank signed an agreement with the World Savings Banks Institute (WSBI) to tap its 193,000 banking network worldwide. Combined, WSBI President Ma. Jose Antonio Olavarrieta Arcos said they have one-third of the global remittances, which the World Bank has estimated at least 0 billion a year. "We can reduce the cost of remittances and give (migrant workers) access to finance wherever they are," he told reporters during a short briefing after the signing in Macasaet said the bank, with 300 branches nationwide, will be able to link up with the WSBIʼs 1,100 financial intermediaries and 103 institutions from 89 countries including European Savings Banks Group. The central bank was supposed to review the proposed OFW bank using Philippine postal facilities to remit and transfer funds. The fist requirement the BSP will be looking at is the bankʼs capital base, which needs beefing up. "(The government) has to strengthen the capital base of Postal Bank first and reposition it as an OFW bank. They also need to study how they can utilize the network of post offices," sources said earlier, who also described the plan as "a logistics nightmare." The crucial part of ensuring a secure OFW bank is controlling the flow of money: entry point of cash and fund transfers. "In the remittance business it is important to watch out for the flow of money and the transfer of cash," sources explained. Otherwise, fund transactions will be open to all sorts of pilfering. As of February remittances from OFWs coursed through commercial banks reached $ 1.1 billion. The full year forecast is $ 14.1 billion, up from 2006ʼs $ 12.8 billion. |
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UCPB to cover OFW needs 'all the way'
| UCPB to cover OFW needs ‘all the way’ |
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| By Jun Vallecera |
| Reporter |
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| THE United Coconut Planters Bank is putting up an entire unit focused on servicing the requirements of overseas Filipino workers and their families that it believes could triple remittance through its facilities this year to around $400 million. UCPB executive vice president Higinio Macadaeg told reporters the bank generated a total $132 million from remittances last year, a small fraction of the total $12.7 billion remitted to workers’ families last year. “Our strategy is to capture their banking requirements at every stage of an OFW’s employment cycle, from the moment he gets the foreign contract to the time he gets settled in his job and begins sending back money to relatives all the way to the point where they are well off enough to begin building their savings and investments in preparation for retirement,” said Macadaeg. After it achieves its objective of tripling remittance-related revenues this year, the bank aims to sustain annual growth of the remittances through its facilities at 10 percent for at least two years thereafter. Macadaeg said they will launch the unit next month to initially focus in the Middle East, the largest market in terms of volume. |
Times of India opens Web remittance service to OFWs
March 30, 2007
Updated 22:20:54 (Mla time)
MANILA, Philippines -- Times of India in partnership with Citigroup has opened its online remittance service to overseas Filipino workers or OFWs.
The Mumbai-based media conglomerate's remittance service is offered through remit2home.com and is available in more than 30 countries in partnership with Citigroup.
INQUIRER.net has also been chosen to be a channel partner in expanding the service to reach Filipino communities in different countries.
"What we are offering Filipino workers abroad is a secure and more economical way for them to send money," noted Akesh Rathke, managing director and regional head of Citigroup's global payment and financial institutions services.
Instead of physically depositing money in remittance centers, the service allows OFWs to transfer money electronically from their local bank accounts to accounts enrolled in affiliate banks in the Philippines.
Users can also opt to have the amount delivered door-to-door in the Philippines.
Suresh Rajarangan, president of Times of Money, a subsidiary of Times of India behind remit2home.com, said the company is expanding the service initially in the Philippines and later on to neighboring countries such as Thailand.
"What we have is a technology platform and an understanding of the global online remittance market," Rajarangan said during a video conference from Mumbai.
Annual remittance from OFWs is valued between $13 billion and $14 billion. According to Rajarangan, there are about 12 players competing in this market.
Times of Money will also introduce a service that would allow users to transfer money from their bank accounts using their mobile phones, he added.
Times of India is the oldest and largest media conglomerate in India. It publishes the daily newspaper Times of India and Economic Times, the second most widely circulated business paper next to the Wall Street Journal.
http://services.inquirer.net/express/07/03/31/html_output/xmlhtml/20070330-57931-xml.html
Macau: New job mecca for OFWs
DEMAND AND SUPPLY By Boo Chanco
The Philippine Star 04/09/2007
MACAU — One thing strikes you as soon as you land in this former Portuguese enclave is the smell of money. It is the same sort of sensation you get in Las Vegas, as you stroll around the strip. There is the excitement of winning and the foreboding of losing. But I am limiting myself to just looking around here. The only deadly sin I am ready to indulge here, as in Las Vegas, has to do with gluttony.
There is a gold rush sort of feel to this old former Portuguese outpost. My wife and I dropped in on the Wynn’s hotel and casino at five in the afternoon of Holy Thursday and I was amazed to see this rush of people in the lobby, all the way to the casino itself as if it was rush hour in a New York subway station... complete with the deafening cacophony of a multitude of Chairman Mao’s descendants simultaneously talking.
Thanks to Macau’s Catholic upbringing, Holy Thursday and Good Friday were no work holidays here. But I didn’t expect to see so many people out for a good time in the gaming tables. China must be doing real well because most of the crowd are Chinese with only a sprinkling of Westerners. And they take their gambling seriously. Anyone who left the gaming table to pee, will certainly lose his place and will have to fall in line again. I’ve been to Las Vegas a number of times and it seems the Chinese are a lot more serious about their gambling than the Americans.
The old Jesuits, Dominican and Franciscan padres who put up all those beautiful historic churches (which my wife and I visited on Good Friday) would probably cringe at what has become of Macau today — the sin city of the Far East. I understand Macau now turns over more money in gambling than Las Vegas and each gambling table is roughly 10 times more profitable than its Las Vegas equivalent.
One other thing you will quickly notice here is the omnipresent OFW. With all the feverish construction of new hotels and casinos, it is easy to see why there would be thousands of new jobs available for our work force in this booming Special Administrative Region of China. A Deutsche Bank study of Cotai, one such new development, notes that Macau only has a population of 450,000. "When the Cotai Strip is fully developed, the area itself can potentially employ over 120,000 people, according to Las Vegas Sands."
There goes the staff of Pagcor! There is supposed to be a gentleman’s agreement that prevents casinos in Macau from pirating staff from Pagcor, but given the higher wages and benefits here, I am sure those who want to work here will find a way around it. I heard Pagcor had lately been deluged with resignations and applications for early retirement from among the most experienced of its staff.
Pagcor’s loss will be the nation’s gain... more OFWs sending precious dollars home. I am told that right now, there are at least 15,000 immediate openings for gaming professionals in Macau. Since we are the most proximate nation with trained gaming professionals, we are a natural source of manpower to fill in the need.
Maybe Efraim Genuino should have been allowed to put up his Pagcor Academy after all. The Pagcor chief once upon a time proposed that such a training center be established to fill in the manpower needs of Pagcor itself. But it was opposed by the usual suspects who have problems with gambling being here at all. Now, it may be too late to satisfy Pagcor’s needs as it hemorrhages its staff to Macau casinos.
Come to think of it, perhaps we can still put up that Academy but on a larger scale — to train not just Pagcor’s manpower requirements but Macau’s and maybe Singapore’s. Like it or not, gambling’s in our culture and if we can make gaming professionals out of jueteng collectors, we would have given them a better ticket to break out of poverty.
Anyway, the new OFWs in Macau will find a lot of kababayans around to keep them from being too homesick. There are already about 35,000 Pinoys doing various things here from the usual hotel services to running a golf course and even as security personnel. They congregate at the Largo Do Senado or the Senado Square in the heart of historic Macau. They are not as many as our OFWs congregating in Hong Kong’s Statue Square but you hear enough Tagalog being spoken to feel right at home. Because of the business boom in Macau and a fast growing middle and a lot of expats, there is also a demand for household help and it may soon follow the experience in Hong Kong.
All the historical sites I visited over the last two days, notably the Churches, have Filipino security guards. The hotels, big and small, also have Pinoy security staff. Many of them are recent hires. Most of the ones we talked to have been here less than a year. The big hotels and casinos employ long-term Pinoy residents for security.
I asked them why there are so many of them there and I was told that their ability to communicate in English was their biggest selling point. As it turns out, even for security guards, it is important to be able to speak English. Our Ate Glue should be commended for ordering the DepEd to strengthen the teaching of English in the public school system. It is a skill our people need to help them take advantage of job opportunities abroad.
The other thing that came to my mind as I observed the goings on here is the possibility of working with Macau tourism authorities to offer a unique tourism package that includes gaming in Macau and doing other tourist activities in the Philippines. There isn’t much space to do anything else here other than gaming and eating.
If they offered packages to American and European tourists to include nature sports in the Philippines, that should help our own tourism efforts tremendously and give the long flight to Macau from Europe or America a little more reason to justify the trip. A western tourist who has already traveled 12 to 16 hours to get to our side of the world, will surely appreciate doing something else other than gambling over a holiday of from four to seven days. Think in terms of a Macau-Boracay package. Or a Macau-Clark-Subic package. Or a Macau-Cebu and or
Even a Chinese tourist will want to see something else, provided he is allowed by the Chinese government to go beyond
| The paramedic |
One day, at a casino buffet, a man suddenly called out, "My son’s choking! He swallowed a quarter! Help! Please, anyone! Help!"
A man from a nearby table stood up and announced that he was quite experienced at this sort of thing. He stepped over with almost no look of concern at all, wrapped his hands around the boy’s gonads, and squeezed. Out popped the quarter. The man then went back to his table as though nothing had happened.
"Thank you! Thank you!" the father cried. "Are you a paramedic?"
"No," replied the man. "I work for the Internal Revenue Service."
Boo Chanco’s e-mail address is bchanco@gmail.com
Tuesday, January 30, 2007
DFA, Comelec to test e-voting
By Pia Lee-Brago
The Philippine Star 01/30/2007
The Department of Foreign Affairs (DFA) and the Commission on Elections for Overseas Absentee Voting (OAVS) signed an agreement yesterday to test Internet voting for 26,804 registered Filipino voters in Singapore.
Poll Commissioner Florentino Tuason, who is pushing for Internet voting in the May 14 elections, defended yesterday the online polls, saying it is the cheaper way to conduct overseas absentee voting.
Tuason pointed out that the Commission on Elections (Comelec)'s budget for online polls or e-voting in Singapore is only P23.5 million or P877 per voter, compared to the P91 million or P1,400 per voter the government spent for overseas absentee voting during the May 2004 elections. The P91 million included the purchase of machines.
"This is very cheap for a form of modern technology. And this includes the software, information dissemination and voters' education," Tuason said.
The United States, Australia, Canada and Italy were also considered for Internet voting but Singapore was chosen for pilot testing since the city-state has a high Internet link in the world with 60-70 percent Internet connection.
He expressed optimism that Internet voting will be implemented for the May elections as provided under Republic Act 8436 or the amendment to the election modernization law.
"Let's put it this way, 80 percent I'll implement it and 20 percent not, if I find serious legal obstacles then I'll resort to voting by mail," he said.
Tuason explained that Internet voting should not be connected to the modernization of the local polls, because it is different from absentee voting abroad.
"The setting in the local scenario is entirely different. The Filipino voters almost, always are residing far from the embassy and consulate. With Internet voting, you can vote in the Internet café, kiosk, the embassy and consulate," he added.
A total of 504,814 Filipinos abroad have registered as of Oct. 31, 2006 in 87 diplomatic posts in more than 50 countries. The 30-day voting will start on April 14.
"We're seriously considering Internet voting. With the passage of RA 8436 amending the modernization law, I'm studying the legal implication of the law in implementing the Internet voting," he said. "If there are no legal obstacles, I'll go on with the implementation."
Meanwhile, Makati City Rep. Teodoro Locsin Jr. said that Comelec Chairman Benjamin Abalos and the other commissioners cannot be impeached or dismissed from office if they refuse to implement the New Automation Law in the May 14 polls.
"They (Comelec officials) can't be impeached because they cannot be held liable for an impossible crime. It (automation law) has never been implemented and nobody impeached them," Locsin told reporters in a briefing.
Locsin, a lawyer-journalist before entering politics, is the chairman of the House committee on suffrage and electoral reforms. He was instrumental in the passage of the bill before it was signed into law by President Arroyo last Jan. 23.
Locsin agrees with the position taken by the Comelec that it can no longer implement the law due to time constraints because the election is just four months away.
"If it can't be done, it can't be done. I cannot even imagine how to do it. We can't force the Comelec to do something that the advisory council said it could not. I really feel that we should step back and make the Comelec decide," he said.
Locsin took a swipe at the Senate, where the poll automation was delayed before it was finally approved into law.
"The Senate delayed the bill so long that there is no more time to demonstrate. The fact that the Senate delayed the passage of the bill shows there's bad faith," he explained.
Locsin also wants the New Automation Law amended that would include neophyte but qualified bidders to participate in the process, where they will be given the chance to prove their worth and help automate the May 2010 presidential elections.
He lamented that senators, before the measure was signed by Mrs. Arroyo, inserted a provision in the law that only allows firms that have "track records" to join the Comelec bidding.
This developed as the Comelec said the P155 million is a very minimal amount to spend for the procurement of security papers to ensure tamper-proof elections.
Jose Tolentino, Comelec director for operations and also the poll body's Bids and Awards Committee (BAC) chairman, admitted that the agency awarded the bid for the purchase of security papers to the bidder with the higher price but the company offered more safety measures.
"It is correct that Lamco Paper Products Corp. offered a higher price but the other bidder Advance Computer Forms failed to comply with our specifications," Tolentino explained.
He said the Lamco security paper has additional security features like the afterglow spots that appear in the dark when the paper is exposed to fluorescent light and chemical-sensitive features, which the paper from Advance Computer does not have.
Lamco's bid is P23,899 per ream of paper or a total of P310,543,600 compared to the Advance Computer bid of P14,999 per ream or a difference of P8,999 per ream.
The Comelec en banc approved the recommendation of the BAC in its resolution dated Jan. 23, 2007. The award was allegedly given to Lamco under questionable circumstances since no representative from the concerned bidders or any technical expert was present during the evaluation for the security features of the paper samples provided by Lamco and Advance Computer.
In another development, Senate Minority Leader Aquilino Pimentel Jr. welcomed the Comelec's accreditation of the Parish Pastoral Council for responsible Voting (PPCRV) as the citizen's arm.
Pimentel said the accreditation of PPCRV is a significant step to realize the objective of the Catholic Bishops Conference of the Philippines to prevent widespread cheating in the polls.
Pimentel said the credibility of the National Movement for Free Elections (Namfrel), which had been the citizen's arm in the past, was severely eroded because of allegations that it demonstrated partiality for President Arroyo during the Operation Quick Count in the 2004 presidential elections. – With Delon Porcalla, Mayen Jaymalin, Marvin Sy
http://www.philstar.com/philstar/NEWS200701300405.htm
OFW investments
By Fr. Emeterio Barcelon, SJ
FOR the country, OFW remittances are equivalent to positive export trade balance. The multiplier effect of this is as great as if we had exported goods. Some of our neighbors boosted their economies by focusing on exports. The remittances are just as good although we still have to endeavor to have a trade surplus. The remittances are normally intended for subsistence of the families the OFWs left behind. But there are also savings over and above daily needs of the family. The pasalubongs, from chocolate bars to karaokes, are just a small portion of savings, including the festivities of welcoming them home. Even for the non-executives, like seamen and household helpers, some savings, especially for the more thrifty ones, are still available. How to invest these savings to protect them and to make the most out of them is the question. This involves risk and how much risk these savings are capable of taking or should take. Of course, the immediate investment should be a house for the family, ideally bought on installment to allow for adequacy. Next is provision for the education of the children and some protection from unexpected health and accident problems. Savings above this, needs some consideration for investments.
The retail bonds of the national government are ideal because the risk is minimal or none at all. It also protects from getting eaten up by inflation. The next best thing, or sometimes better, are time deposits with rural banks that pay higher rates and the interest can automatically be reinvested at the regular rates. The advantage of this over the national bonds is that it gets to earn at compound interest. These time deposits are guaranteed by the PDIC up to R250,000 so that a family of six can have up to a million and a half fully protected by this government insurance. For those interested in helping their hometown, deposits in the hometown rural bank will help towards this purpose. There are also local municipal bonds that are being issued to leverage the local government income from their share of the tax revenue. But there are not too many of these but hopefully will be coming with institutions like Ercof trying to help the OFWs to earn at the same time help their kababayans.
Beyond time deposits and bonds, the risks become greater but the returns can also be greater. Half of these overseas workers would have an investment they know how to run. This is ideal of they have returned and can supervise it themselves. Entrusting the investment to somebody else increases the risk. Investing in the stock market is not advisable except in the highly stable stocks that they call "for widows and orphans." And there are only three or four of these in the local stock market. Ideally some mutual fund stocks were available backed up by some stable organization. But there are none of these in sight at the present. The advantage of such mutual funds, if well run, is that it will take advantage of the bull run that the present economy should have for the next five or so years. Direct investing is also possible but this is the riskiest. I know of an executive who came back from abroad with his retirement money but promptly lost most of it in three years. Looking back at his investments he came to the conclusion that his investment instincts were no longer Filipino. He was out of sync with dealing with people here. Of course, he might just have been unlucky and the general economy was on a down turn at the time of his investments. This also points to Filipinos and Filipino groups who are now coming back with investment capital. They also have to be helped to make the most of their opportunities. <emeterio_barcelon@yahoo.com>
http://www.mb.com.ph/archive_pages.php?url=http://www.mb.com.ph/issues/2007/01/26/OPED2007012685548.html
Monday, January 29, 2007
We can't depend on OFWs forever
DEMAND AND SUPPLY By Boo Chanco
The Philippine Star 01/29/2007
The way our government spins the positive news about OFW remittances, they make it look like Ate Glue should get credit for all that. The worse part of it is the impression being made that sending our workers abroad is an important permanent pillar of Ate Glue’s economic program. If this is so, we have reason to worry simply because it is not sustainable. Sending workers abroad was supposed to have been a stop gap measure, something temporary while government works to get our domestic economy humming.
I have mostly considered the opinions of the Ibon Foundation a lot of leftist propaganda that cannot be relied on for real policy making. But this time, I completely agree with the view they expressed that "the growing dependence of the country’s economy on the money sent home by overseas Filipino workers (OFWs) has become alarming."
It is definitely alarming that the remittances of around $12.3 billion last year were roughly equivalent to 10 percent of the country’s gross domestic product. There are those who estimate the real figure at the $14-billion to $21- billion range, if other remittance channels are considered.
"The double digit mark makes the Philippines the most overseas remittance-dependent economy of any significant size in the world. This means that the economy continues to be kept afloat by the external and volatile OFW remittances, and not by a strong local economic capacity," an Ibon economist was reported to have said.
Government statements estimate that about two to three thousand Filipinos leave the country everyday to find jobs abroad. That is definitely a sign that government’s economic programs have failed to create jobs domestically. The scarcity of jobs indicates, as Ibon observes, "the economy lacks an internal dynamism that is able to productively harness and employ the Filipino workforce."
Quick cut to Vietnam, one of the fastest growing economies in the region today... According to the Financial Times, Vietnam is now experiencing a spectacular stock market boom. Interest from both Vietnamese and foreign investors fuelled a stunning market rally at the Ho Chi Minh City Stock Exchange.
Their one big problem however, is lack of qualified manpower. It is hard enough to teach communists the basics and the nuances of a strictly capitalist money making institution, they also have the general inability to communicate in English. I have a strange feeling that headhunters will soon be prowling the floor of the Philippine Stock Exchange to engage talent to help keep the bulls running in Vietnam’s stock market. We have some of the best analysts and traders in the region, after all.
The Financial Times article went on to say that unlike in many other Asian countries including ours, Vietnamese students abroad are starting to come home to provide the trained manpower to manage their country’s economic boom. But they don’t have the numbers their country needs. Our problem is, we have more than we need and many talented and trained manpower are merely fetching coffee or twiddling their fingers here while waiting for action.
Many of our bright young talents have grown tired of waiting and have joined the exodus abroad. This is also why OFW remittances have ballooned. The composition of our manpower export has started to shift from brawns to brains. They earn more and are sending back more. The danger however, is that this college educated types tend to assimilate well in their host countries and end up as permanent migrants... a total loss for our country.
Former banker Ramon "Ray" Orosa warned that in the long run, the " unfortunate consequence of their departure is to deprive our economy of the qualified labor needed in order to build a sustainable economy. The lack of qualified, competent labor has so grown that even foreign investors are now concerned whether to invest in the country due to the lack of qualified manpower."
Ray worries that "the declines in domestic investment implied a diminishing capacity to expand production and warned of a slowdown in the near future." In other words, go and enjoy their remittances now. But don’t get addicted to it. That’s just a short term benefit. Unless we are able to attract them to eventually come home and help rebuilt our country’s economy, we are going to be worse off in the future.
How do we get them to come home, or for that matter, keep them from leaving? According to a recent World Bank study, good governance will do the trick.
"What really helps putative migrants stay at home is not just higher wages but the prospect of fast, effective reform, bringing better public services and a dependable legal system." The final misconception is about what motivates migration, the World Bank study notes. " Everyone thinks it is all about income differentials, but actually it is all about expectations. Even in poor countries we can expect low levels of migration if people think that conditions there will improve," argues Brice Quillin, one of the report’s authors.
There are no ready-made solutions for effective migration policy, yet one possible route might be to combine short-term migration with incentives for return or circular migration. Circular migration could allow migrants to spend short periods of time abroad without creating new amounts of permanent migration.
Circular migration, the World Bank study asserts, will yield a ‘Triple Win’ for migrants and sending and receiving countries. Potential benefits of circular migration include: Receiving countries could fill labor shortages, increase revenue, and reduce social tensions related to undocumented and unmanaged migration; Sending countries would accumulate human capital that might otherwise be lost; and Migrants could increase their income, build human capital and financial savings, maintain links with their families, pay lower remittance costs, and create trade/investment linkages between countries.
Theoretically, returning OFWs constitute the great hope of our country for the future. Many of them have some savings that could spur countryside development. Their overseas experience has exposed them to more effective governance that would make them a force for improvement in our own governance as well.
Our big problem is how to get this circular migration going... how can we get our trained migrants back. As such, an effective OFW program should not be singularly focused on remittances but also on how we can use this phenomenon as an investment for our future, by getting our trained manpower back home.
The fast and easy answer is to get our government to drastically improve governance so that every Filipino will be so proud of his country and there would be no place in the world for him like home. But given the quality of our political leaders and the quality of our bureaucracy today, good governance is a dream. I want to think it shouldn’t be hopeless, unless we give up.
| Economic forecasts |
Albert Einstein dies and goes to heaven only to be informed that his room is not yet ready. "I hope you will not mind waiting in a dormitory. We are very sorry, but it’s the best we can do and you will have to share the room with others," he is told by St. Peter.
Einstein says that this is no problem at all and that there is no need to make such a fuss. So St. Peter leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants.
"See, here is your first room mate. He has an IQ of 180!", says St. Peter.
"That’s wonderful!" says Einstein. "We can discuss mathematics!"
"And here is your second room mate. His IQ is 150!".
"That’s wonderful!" says Einstein. "We can discuss physics!"
Suddenly, another man moves out to capture Einstein’s hand and shake it. "I’m your last room mate and I’m sorry, but my IQ is only 80."
Einstein smiles back at him and says, "So, where do you think interest rates are headed?"
Boo Chanco’s e-mail address is bchanco@gmail.com