For the last 30 years, the Philippine economy, and all administrations from the time of the dictator Marcos to the present, have been propped up by the remittances of overseas Filipinos. This means, the country’s economy is saved from eventual collapse by the remittances of Filipinos working and residing overseas.
By Lualhati Roque
International Migrant Resource Center
Posted by Bulatlat
For the last thirty years, the Philippine economy, and all administrations from the time of the dictator Marcos to the present, have been propped up by the remittances of overseas Filipinos.
Simply put the country’s economy is saved from eventual collapse by the remittances of Filipinos working and residing overseas. This is a stark reality that all Presidents and their different sets of economic managers know for a fact, and take pains to hide from the general public.
That general public includes the majority of the increasing number of families that are dependent on remittances for them to survive the chronic economic crisis.
Last year, close to 10 million Filipinos overseas remitted a total of US$8.5 billion to the Philippines. This is 9.2% higher than the US$7.6 billion total of 2003. This is aided by the government pursuit of its labor export program that targets 1 million Filipinos deployed annually. For the first half of this year, 502,772 OFWs were deployed abroad compared to the 483,496 OFWs deployed in the same period in 2004.
The Philippines is the third-biggest recipient of remittances behind Mexico and India. Government data show that as of June 2004, annual remittances were three times larger than ALL the foreign direct investment the Philippines receives.
According to an IMF study, aside from exports of goods and services, remittance is the largest source of foreign currency for the nation. It sustains local demand for restaurant meals, motorbikes, pre-paid mobile phone credits and cinema tickets as exports slump and debt payments force the government to continue severely limit social spending.
We must note that the annual remittances (US$8.5 billion or P467.5 billion) of migrant Filipinos is bigger that the combined value of the top five Philippine merchandise exports (semi-conductors, finished electricals, garments, crude coconut oil, and bars and rods of copper) in the same year.
The same amount is more than half of the 2005 national budget (P907 billion); close to 100 times the Foreign Direct Investments for the year 2003; almost 10 percent of the Gross National Product in 2004; and 26 times bigger than the combined total of US military aid to the Philippines in the 1990-2001 period.
Why is government resolute in the pursuit of its labor export program? Despite the increasing trend – so far – of annual remittance inflows to the country, why does our economy remain generally fragile?
These are some of the questions that can be answered when we clarify some realities that are already part of our daily national life.
A backward, fragile economy
We are a nation of 86 million people wherein a third of the population lives on less than 60 US cents (P33 pesos) a day and actual unemployment is higher than 11 percent.
Ours is an economy that is driven by a heavy dependence of the import of finished products and export of raw materials, semi-processed materials and labor.
It is an economy that is backward, mainly agricultural and without basic industries. It is increasingly dependent on migrant Filipinos’ remittances to keep government intact.
The current government is currently in a tough bind by pushing for new taxes and pursuing its labor export program in the drive to produce more revenues for its cash-strapped coffers.
Thus, the Philippine government, since the time labor export was institutionalized in the Marcos years to the present, cannot do without the remittances of migrant Filipinos and the revenues it derives from the fees that it gets from them before they leave the country.
It must also be noted that government raked in P14.4 billion pesos from the government fees charged to all the 933,588 workers who were deployed in 2004. An OFW applicant pays an average of P15,400 in government fees before he or she leaves the country. This does not include the astronomical charges of recruitment and manning agencies.
Simply said, labor export is also one big revenue generation scheme of the government.
Remittances help the economy stay afloat
Generally, there are two modes of sending remittances available to overseas Filipino workers. These are the following:
a. formal (banking) channels (Allied Bank, Metro Bank, Philippine National Bank (PNB), RCBC, Equitable-PCI). In this mode, the OFW would bring his/her hard-earned wages in whatever currency to the bank which shall transmit it its branch in the Philippines specified by the OFW.