PLUSES AND MINUSES OF FILIPINO OVERSEAS WORKERS ON THE PHILIPPINES AND ITS ECONOMY

IMPACT OF FILIPINO OVERSEAS WORKERS AND REMITTANCES ON THE PHILIPPINES

Floyd Whaley wrote in New York Times, “The money sent home by overseas workers is an important driver of economic growth in the Philippines. According to a report released by the central bank on Dec. 17, remittances from overseas reached $17.5 billion between January and October of 2012, up 5.8 percent from the year-earlier period.” [Source: Floyd Whaley, New York Times, January 31, 2013]

Overseas Filipino workers abroad send back remittances amounting to 10 per cent of the country's annual gross domestic product, fueling domestic consumption and keeping the local economy afloat. Remittances are now the country’s second largest source of foreign reserves, behind exports but ahead of foreign direct investment in terms of percentage of GDP. In 2006, 81 per cent of remittances came from the US, Canada, Saudi Arabia, Britain, Japan, Singapore, Italy and the United Arab Emirates,

On the impact of remittances, Marjorie Pajaron of Stanford University said: “The benefits are both short and long term. Remittances can provide immediate assistance as needed, such as rebuilding after a natural disaster. From a longer-term perspective, many remittances in the Philippines go toward education, which is a form of human capital investment. Many families also invest in real estate, buying houses and land, and they also purchase durable goods, such as cars and appliances. Some scholars have conjectured that OFWs have helped close the gap between the poor and the wealthy in the Philippines by contributing to a growing middle class. This is why migrant workers are called the “new heroes.” They sacrifice a lot by working in what are often unfavorable conditions. Because of the system of helping their families, they are also helping the entire country. [Source: Marjorie Pajaron, the current Asia Health Policy Postdoctoral Fellow in Developing Asia, at Stanford; Sarah L. Bhatia, Shorenstein APARC, FSI Stanford, April 15, 2013]

Richard C. Paddock wrote in the Los Angeles Times, “As a third generation leaves to work abroad, it is clear the system has not led to prosperity. Policymakers have focused on easing the flow of workers rather than harnessing their earnings for economic development. Dependence on the export of people has become a formula for stagnation. Once one of the strongest in Asia, the Philippine economy now ranks near the bottom. The government invests little money in manufacturing, education or healthcare. The economy can't create even the 1.5 million jobs a year needed to keep up with population growth. "We have a middle class, but they don't live in the Philippines," said Doris Magsaysay Ho, head of a company that dispatches 18,000 workers a year to serve on ships around the world. [Source: Richard C. Paddock, Los Angeles Times, April 20, 2006 ~~]

“The money they earn trickles into towns and villages, helping build houses, open restaurants and send children to school. But the absence of so many industrious and skilled people — mothers and fathers, engineers and entrepreneurs — exacts a heavy toll. Across the Philippines, children are being raised by their grandparents. "Now children can buy a lot of computer games, but they don't have a mother or father, or both," Santo Tomas said. ~~

“The Philippines has grown so dependent on remittances that the thought of doing without them is frightening. "Money from abroad is the only thing that keeps the economy in motion," said Ding Lichauco, former head of the country's economic planning office. "If you don't encourage the employees to go overseas, you will have revolution."

Remittances and Money from Overseas Filipino Labor

According to the New York Times overseas Filipino workers (OFW) sent home about $20 billion in 2011. That is up from $7.5 billion in 2003. Money from OFWs is one of the Philippines's major sources of foreign revenue. The transfer of funds from abroad to the Philippines when lumped together is one of the largest single movements of money in the world.

Filipinos working abroad sent home about $10 billion, accounting for about 10 percent of its GNP in the mid 2000s. About 60 percent of this was sent through banks and wire services. About 40 percent are not sent through bank channels. The Philippines receives much more in remittances than in does in foreign aid. So much money come from the United States that when there is a recession there, the Philippines is not hurt so much by a decline in exports but by a lack of remittances.

Some Filipino families have been forced by debts to send members oversees to work. Often the pay is not all that great but it is better than what they can get back home. Most send the money back home to help relatives, who use the money to buy refigerators, move to better homes and pay school fees for their children. It is not usnusal for a single worker to support an extended family of 15. A few workers manage to save money for themselves so they can start up businesses at home or buy a jeepney. Most say they don't want a similar life for their children.

The Philippines is the fourth-largest recipient of remittances in the world, after India, China and Mexico, receiving $21 billion in 2010 according to the World Bank estimates show, or more than half its national budget. Monthly remittances reached a record of $1.48 billion in May 2009. Money is sent by overseas workers through remittance services offered by banks and Western Union and informal services offered by Filipino communities in the places where workers work. Philippines Airlines flights are often filled with Filipinos going to and coming back from overseas jobs. Filipinos miss their families terribly and long distance telephone companies do good business. In 1994, overseas workers sent back almost $3 billion officially reported through the banking system, but the real figure could have been twice that.

Overseas Filipino Workers Economic Heroes

?

Sarah L. Bhatia of FSI Stanford wrote: “Homesickness, long hours, and demanding employers—many Filipinos who migrate to another country for temporary employment make personal sacrifices and face daunting working conditions. To their family members receiving much-needed supplemental income and to the Philippine government bolstering its foreign reserves, they are the “new heroes.” The government has even established an annual award to honor its most distinguished OFWs. [Source: Marjorie Pajaron, the current Asia Health Policy Postdoctoral Fellow in Developing Asia, Sarah L. Bhatia, Shorenstein APARC, FSI Stanford, April 15, 2013]

Iris C. Gonzales wrote in the New Internationalist, “Overseas Filipino Workers. Our government calls them unsung heroes and rightly so, because the dollar remittances they send home keep the economy afloat. According to the Bangko Sentral ng Pilipinas (BSP), recent data shows that remittances from overseas Filipino workers rose by six per cent to $1.68 billion in February from $1.59 billion in the same period last year. The BSP expects 2013’s total remittances to grow by five per cent from 2012’s figure of $21.4 billion. [Source: Iris C. Gonzales, New Internationalist, April 25, 2013]

Mary Lou Hardillo-Werning travels across Europe helping Filipino migrants. “We’re trying to keep the spirit of these strong women alive,” she told the International Herald Tribune. “The Filipina immigrants I meet are just as strong. They are the purse-holders, and their work is giving them self-confidence. They are feminists. They just don’t call themselves that.” When you are thousands of kilometers away from home, are you still a mother? “Many of these children don’t really know their mothers, they only know them as money angels,” Ms. Hardillo-Werning said. [Source: Katrin Bennhold, International Herald Tribune, March 8, 2011 /+/]

Problems Caused by So Many Filipinos Working Abroad

John M. Glionna wrote in the Los Angeles Times, “The exodus of trained teachers, health professionals and engineers, some say, has done the Philippines more harm than good as those much-needed services go elsewhere. There are also distinct social problems that arise when heads of households leave for greener economic pastures, officials say. [Source: John M. Glionna, Los Angeles Times, August 26, 2009 \=/]

“The remittance system has also altered the lives of the stay-at-home families of overseas workers. A recent International Monetary Fund study found that many extended families of overseas Philippine workers are refusing to pursue jobs at home that they consider too low-paying, preferring to rely on their monthly remittance cut. \=/

“There are social problems as well. As parents leave home, children get left with relatives or friends who may not provide adequate supervision, which can lead to substance abuse and gang membership, says Tony Sarmiento, a Santa Barbara city official in charge of monitoring his town's overseas workers. As a result, Sarmiento says, some workers abroad return home expecting to realize a dream of sending their children to college only to find that they dropped out of school in their absence. \=/

"The worst part of this human export policy is that [the government doesn't] make the hard choices back home," said Benjamin Diokno, a professor at the University of the Philippines School of Economics. Some analysts say the Philippines must find ways to raise salaries to keep trained professionals from leaving the country. Statistics show U.S. salaries for some professions are more than 10 times higher than in the Philippines. "We don't work toward a dynamic economy that would create more jobs," Diokno said. "Instead we rely on that paycheck from abroad." \=/

Philippines Best and Brightest Go Abroad

Lack of opportunities in the Philippines has forced many of the country’s best and brightest to go abroad for work. In one particularly celebrated case a doctor who graduated magna cum laude from medical school went to work in the United States as a nurse. Many Filipinos are not surprised by such decisions. A doctor in the Philippines often make as little as $600 a month while nurses in the United States can earn $6,000 a month, plus a $7,000 signing bonus.

Many educated and professional Filipinos—fed up with the life in Philippines and its lack of opportunities, corruption and pollution—have left the Philippines for good and moved to the United States, Australia, Canada, and other countries to live and make their home. This is depriving the Philippines of talented and skilled The Times of London and a chance to develop a stable middle class that could break the hold of the dominate elite.

The policy of sending skilled workers and professionals abroad is hort sighted, economists say, because it deprives a nation of its best investments, skilled people. Government policy however encourages Filipinos to seek work abroad and those that do it are praised for the self sacrifice.

Impact of Overseas Workers on the People in One Small Philippine Town

Reporting from Santa Barbara, Philippines, John M. Glionna wrote in the Los Angeles Times, “Looking down the main drag of this farm town, Police Chief Eric Noble marvels at the modern conveniences -- byproducts of the fierce ties binding Philippine families. Sturdy houses with concrete foundations now replace the thatched huts of a generation ago. There are new cars, washing machines, children attending private schools and former sharecroppers who have purchased the farms where they once worked as lowly laborers. Such economic progress has come from remittances sent to families each month by Filipinos working overseas. [Source: John M. Glionna, Los Angeles Times, August 26, 2009 \=/]

“The people of Santa Rosa, a village two hours south of Manila, once made a living processing coconuts. But the men who worked in the drying sheds left the country long ago. Now the village is known as Little Italy. It depends almost entirely on remittances from abroad. Of its 8,000 people, 3,000 work overseas, mainly in Italy and Spain. Left behind are children, the elderly and the disabled. Overseas workers contributed money to build the two-story village office. A worker in Spain donated the village computer. Others helped buy an ambulance. But the village is distinguished by the more than 600 large Italian-style houses built with money sent home from overseas. Village head Benito Alvarez, who wears a USA T-shirt given to him by cousins in America, said the owners were unlikely ever to live in them. "They build the house to prove to the people they grew up with that they are a big success," he said.

“Though Noble, the police chief, praises the financial boost remittances give his town, he said the system is draining the Philippines of a prized resource: its people. "Every day you look and shake your head," he says, "to see that someone else is gone." Many Santa Barbara residents realize they must leave their isolated town to achieve a better life. But with millions of the poor living atop garbage dumps and under bridges in Manila, they know their nation's capital is not the solution. And so they go abroad: One in 10 of Santa Barbara's 80,000 residents work in places such as Italy, Taiwan, Singapore and the U.S. \=/

“Carlito Villanueva, 67, began sending his children to Spain and Italy in 1985. Now all nine of them live in Europe, along with their spouses and his 14 grandchildren. "If they had not gone, I could only see hardship for them, because life here is very difficult," he said. "I'm not sad at all. I'm very happy. As a parent, my major goal is to secure a good life for them." Each of the children is sending money to build a house in the family compound. Four have been built, and a fifth is planned. All are unoccupied, except on the rare occasion when one of the children comes home for a visit. "This is their home," he said. "Wherever they are in the world, even though they are scattered, they will come home to me." \=/

“Far from home, Lenin Posario is busing tables in Alberta, Canada, and mowing lawns to make ends meet. He has made twice the salary he was making as a banker in Santa Barbara, enough to put his two oldest children in private school. But the loneliness sometimes threatens to drive him mad. His wife, Ruth, was six months pregnant with their third child when he left nearly two years ago. He was headed for Canada to provide the family with a better life. Still, she felt abandoned. "I was pregnant and emotionally unstable and suddenly a single mother," she recalled. "I couldn't stop crying." "It's the price we have to pay, or our families will suffer," he said, sitting in his living room on a visit to Santa Barbara. \=/

“Maryann Bollesar also knows the anguish of missing her family. Two years ago, she joined her husband in Dubai, United Arab Emirates, where the former teacher works as a helper in a real estate office. She left her two young sons with her younger brother in Santa Barbara. Each Friday, she talks to them over the Internet, able to see them via remote camera. "I see how much they've grown without me and I want to burst into tears, I miss them so much," Bollesar said. "But I try not to cry in front of them." \=/

Impact of the Global Financial Crisis on Filipinos Working Abroad

In July 2009, in the midst of the global economic crisis, President Gloria Macapagal Arroyo hailed remittances as a driving force behind the economy. Labor Secretary Marianito Roque separately described the remittance system as a source of pride. "The flow of overseas worker money in an unstable global economy demonstrates the resiliency of the Filipino people," Roque said. "Under the worst circumstances, our workers are getting jobs and sending home more money than ever. They are keeping the boat stable." [Source: John M. Glionna, Los Angeles Times, August 26, 2009 \=/]

John M. Glionna wrote in the Los Angeles Times, “After “the global financial crisis struck, many overseas workers have been forced to secure second and even third jobs to keep the remittance flow constant. About 200,000 overseas Filipinos have lost their jobs since then, economists say. Many have returned to the Philippines, where, accustomed to the better salaries and working conditions abroad, they often do not want to take any available jobs. [Source: John M. Glionna, Los Angeles Times, August 26, 2009 \=/]

“Others are hounded by job placement businesses to repay hefty travel and work setup fees the agencies laid out in advance for workers leaving the Philippines. "They're stalked by loan sharks who threaten their lives if they do not pay," said Garry Martinez, chairman of Migrante International, a watchdog group.” \=/

The economic problems in Europe, particularly Cyprus, had an impact on Filipino workers. In April 2013, AFP reported: “With recession-hit Cyprus facing an even deeper slump on the back of a draconian EU-IMF bailout, thousands of Asian housemaids, nannies, and caregivers on the small Mediterranean island fear for their jobs and futures. For years, Filipina, Sri Lankan, and Vietnamese women have been a status symbol in Cypriot homes, working six days a week, often for very long hours, in exchange for room, board and 330 euros ($430) a month. [Source: AFP, April 26, 2013 /*\]

“With the harsh austerity measures imposed by the deal to rescue Cyprus's failing banks and bankrupt government, businesses will close, many people will lose their jobs and those who keep them will see their incomes reduced. Fely, a Filipina who has been working as a cleaner in offices and homes for the past five years, is already feeling the pinch. "They cut my work hours by half," she said worriedly. "One of my part-time employers told me I should stop coming... They told me if they settle this problem about their money at the bank they will call me again." /*\

“She was referring to the fact that the bailout deal included a "haircut" on deposits above 100,000 euros, meaning some businesses and individual depositors will lose large amounts of capital. Cypriot immigration officials say there are around 35,400 domestic workers in Cyprus, but with increasing pressure on big bank accounts and soaring unemployment, some households are looking to share their "help." Domestic workers are considered to be a luxury for most of our citizens, so when you are in a financial crisis, the first thing that you need to cut is the luxury," said Riginos Polydefkis, a senior immigration official. /*\

“For those who lose their jobs, the outlook is stark. To begin with, they have no right to unemployment compensation, and if they fail to find a new employer within 30 days of being laid off, they become illegal. Polydefkis said the number of domestic workers, which peaked in 2010, dropped by a thousand in 2012, and by another thousand in the past two months. "The number of domestic workers was more than the estimated needs, and I think that there is going to be a correction right now," he said. /*\

Fely said: "We need to find a job somewhere, but we don't know where to go." She is married to a Romanian she met in Cyprus, where their daughter was born three years ago. He has lost his job and will return to Romania with their daughter, while Fely stays on in hope of a turnaround. Lynn is another Filipina. She has been laid off and is still looking for a new job. Her plight highlights another dilemma for these women - whether to stay on in Cyprus, taking ever more poorly paid and onerous jobs, if they can find them, or throwing in the towel and going home. "If I go home, my children, 12 and 14, will drop from school because I will not be able to pay for them," said Lynn, who suggested she might go to Turkish-occupied northern Cyprus, where some of her friends have found work. /*\

“Doros Polykarpou, who works with KISA, an NGO offering support to migrant workers, spells out many of the problems these women face. "Many of these people still have to provide for their family, so they are not able to leave the island despite the difficulties," and will be "willing to accept any condition at all in order to earn whatever money they can to support their families abroad." And "more and more of these people are not being able to get their salary, or they are asked to work longer hours, for several employers, without extra pay." Shemaine Kyriakides, the Philippine honorary consul in Cyprus, said: "I don't think the number will lessen too much, because it is hard work and I don't think a lot of other people would assume that for the amount they are paid." The result, Polykarpou said, will be "more exploitation, more vulnerability, more undocumented people." /*\

Filipino Nannies in Paris Hasn’t Seen Her Children in 12 Years

Maridel Sagum, a Filipina nanny living in Paris, hadn’t seen her children for 12 years when she finally saw them in 2011. Katrin Bennhold wrote in the International Herald Tribune, “When Maridel Sagum left her twin daughters in the Philippines to work as a nanny in France, they were 8 years old, two bubbly girls who climbed into bed in the mornings to snuggle up to her. Twelve years and some €100,000, or $140,000, in bite-sized monthly payments later, the twins are young women with college degrees and Ms. Sagum, 47, whose French residency permit is at last being issued this month, will soon see them again for the first time since 1998. “I’ve looked after other people’s children to give my own children a better future,” she said, pondering a portrait of her daughters that dominates her 14 square-meter, or 150 square-foot, rental room in Paris. “It was the hardest thing I ever did. But it was the right thing.” [Source: Katrin Bennhold, International Herald Tribune, March 8, 2011 /+/]

“Edna Pena left her son Mark Jaycee in the Philippines when he was just one. Unlike the two children she looks after in Paris — 6-year-old Oscar and 8-year-old Olivia — she never saw him take his first steps, say his first words or have his first day at school. When she went back for the first time in almost 14 years after getting her papers in 2008, he was about to graduate from high school. But by sending home about €700 every month, she put him through the best private schools near her hometown and recently bought a condominium for him near the campus where he now studies industrial communications engineering. She pays a maid to do for him what she does in Paris. And after 16-plus years in France, this staunch Catholic, who serves on the pastoral council of her church in Paris, has no qualms about telling her son and his girlfriend to use birth control. “I told him, ‘Do you think people in France have babies at 18? Get your diploma first,”’ she said. /+/

“Before Skype, Ms. Sagum could afford to call home once a month. She worried so much that her daughters would forget her voice that she sent voice recordings by mail. Ms. Peña sought to ease the pain by cutting out a picture of herself and gluing it onto a photograph of her husband and son. If the benefits of female migration are underdocumented, so are its hidden costs. In the Philippines, migration is known as the “Filipino divorce.” And some studies have linked youth crime and drug abuse to children growing up without their mothers. /+/

“Migrant mothers know this. “I was very lucky that my children were good,” said Ms. Sagum, who in addition to the twins has three older children. Her family still paid a steep price for the five degrees she funded for her children and the rice paddies and fish pond she bought her husband. In her 12 years gone, Ms. Sagum has missed her father’s funeral and the birth of three grandchildren. Recently, her arthritis started flaring up, the result of too many hours of hard work. /+/

“Most worrying is that while all five children excelled and got professional degrees, only three have jobs. One of her twins, who has a management diploma but no work, recently asked if she could join her mother in Paris. “I told her, ‘Why do you want to come to Paris? To work like a maid?”’ Ms. Sagum said. “I said no.” All too often that happens, said Arlie Hochschild, a sociology professor at the University of California, Berkeley, and co-editor of “Global Women,” a book that looks at the costs of female migration. “Remittances alone are not a solution to third-world development. If they were, the Philippines would look like South Korea today,” she said. “These women do educate their children, but there are no jobs for them and often, they end up becoming domestic workers who themselves leave their children to work abroad. It’s become a system.” /+/

Children Left Behind by Overseas Filipina Workers

Many OFWs leave their children behind so they can earn enough to pay for their schooling. Others forgo the chance to marry in order to provide for parents and siblings. Some make these sacrifices for as little as $400 a month, about half of which is sent home. Richard C. Paddock wrote in the Los Angeles Times, “Editha Ycon, 37, has worked 13 of the last 17 years in the United Arab Emirates, Saudi Arabia, Taiwan and now Hong Kong. She has a degree in computer programming but could not find work in the Philippines. She has left her son twice to go overseas, first when he was 6 months old and again when he was 4 years old. He is now 10. "I want to stay with my son," she said. "I want to prepare his breakfast before he goes to school. I want to pack his things. I am a mother, but not really. I haven't been a mother yet." [Source: Richard C. Paddock, Los Angeles Times, April 20, 2006 \=/]

Another Filipina’s “son Francis Ivan, now 6, a boy who likes basketball and hamburgers, stood in the living room of his uncle's home and talked about a mother he hasn't seen in two years. "I want to hug her," he said, staring at the floor. "Every week, I ask her, 'Mommy, when are you coming home?' " But the boy's life is about to take another lonely turn. The uncle he lives with, Edgar Doria, wants to move to Canada. He and his wife, Janet, plan to leave their infant daughter, along with their two nephews, behind with other family members. Doria said he tries not to feel guilty."It's a toxic choice, but we have to go," he said. "We're leaving the Philippines for the sake of the people we love." \=/

“Another neighbor, Digna Escueta, 28, hadn't been home since she left to work as a maid in Padua, Italy, six years earlier. She came back for two weeks to try to straighten out a domestic nightmare: Her husband was in prison for drug use, and her daughter was out of control. Her parents worked overseas when she was growing up, starting with her mother when Escueta was 11. A brother and sister followed. Altogether, more than 50 relatives found work in Italy. Escueta married as a teenager and soon had a baby. Her husband became addicted to methamphetamine. "We grew up making our own decisions, and because of that we married young," she said. "Some children of overseas workers in this barrio fall into vice and lose direction in life." \=/

“When Escueta turned 22, she also went overseas, leaving her 1-year-old daughter, Yvonne, with a cousin. Seeing her daughter for the first time in six years was not the reunion she was hoping for. Yvonne had become the terror of the neighborhood. She slugged the boys when her mother's back was turned, making them cry. She killed kittens by hugging them to death, stepping on them or locking them in a closet, Escueta said. She killed a puppy by tying a string around its neck and letting it fall off a high bed. "She loves them to death," her mother said. \=/

“Escueta acknowledged that the absence of so many parents meant troubles for the next generation of Filipinos. "Going abroad has two sides," she said. "The bad side is the separation of the family. The children grow up without a mother's supervision. Sometimes they go astray. The good side is not just the income but the possibility the whole family could go overseas, which is my dream." \=/

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Philippines Department of Tourism, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

Page Top

© 2008 Jeffrey Hays

Last updated June 2015

This site contains copyrighted material the use of which has not always been authorized by the copyright owner. Such material is made available in an effort to advance understanding of country or topic discussed in the article. This constitutes 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. If you are the copyright owner and would like this content removed from factsanddetails.com, please contact me.