Still a remittance economy

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LATEST reports from the Bangko Sentral ng Pilipinas (BSP) said a total of $12.08 billion in remittances were sent by overseas Filipino workers from January to June this year, higher than remittances of only $11.45 billion in the first half of 2014.

“Remittances remained robust, partly due to stable demand for skilled Filipinos abroad,” the BSP said.

Whether this administration cares to admit it or not, the billions of pesos worth of liquidity injected into the economy from the foreign-currency earnings of our OFWs is still one of the main pillars of economic growth, not its good governance campaign and certainly not its poor fiscal policies as evidenced by its perennial underspending.

Indeed, the so-called trickledown effect this and other administrations before it like to brag about from past economic growth surges has never happened.


Despite the Philippine economy’s supposed rapid growth under the Aquino administration, many observers have noted the government’s failure to promote inclusive growth.

Economic growth in this administration has not translated into employment opportunities and poverty reduction.

OFW remittances still provide the growth that matters most in the lives of Filipinos. They go straight to households, to relatives, families and friends that use them to better their lives, to finance food, shelter, education and entrepreneurial pursuits.

The Philippines depends on remittances perhaps more than any country in the world. We are the third highest remittance-recipient country after India and Mexico, and the highest when remittances are measured as ratios to population, GDP and exports, according to Ernesto Pernia of the UP School of Economics.

Money transfers from Filipinos working all over the world account for at least 10-percent of our country’s GDP, the second largest source of foreign capital after value-added exports like electronic components, and a major source of private consumption which in turn accounts for 75-percent of GDP.

Every day about 3,000 Filipinos leave for jobs abroad even if the government officially does not have a labor migration policy.

Remittances virtually made our economy recession-proof as other countries were caught spinning in the global economic downturn that started a few years ago and continues to this day.

Should the Philippines should reduce its heavy reliance on remittances? Surely, but can it? Perhaps never or not totally. We have always been a remittance economy and remittances would continue to be a major growth driver for some time yet.

So far this government has failed to find other “dependables” to keep the current growth pace of the economy.

I have pointed out previously, for instance, how we need a strong manufacturing sector to provide better quality jobs that could alleviate poverty in the country, all the more important because of the upcoming Asean economic integration.

The devastating impact of a sudden return migration of our OFWs in the troubled Middle East has not materialized, at least not just yet.

The debt problems of most countries in the euro zone, along with the economic problems of the United States did not dampen the demand for Filipino workers and cause remittances to dip or even take a plunge.

There is still a strong demand for our workers and their deployment overseas has hardly been affected by the troubles going on around the world, including those in host countries.

But there is no room to be complacent, which is what this administration has been. While there hasn’t been a massive flood of displaced OFWs coming home, the same unemployment and underemployment situation, which is what drove our workers to seek jobs overseas in the first place, still exists.

Shameless
There is nothing ‘tuwid na daan’ about PhilHealth’s decision to sponsor a series of ads featuring former Party-list Rep. Theresia Hontiveros-Baraquel of Akbayan, a staunch ally of President Aquino, who ran for senator but lost in the 2013 elections.

Hontiveros-Baraquel, who took her oath of office as PhilHealth board member only on June 30 this year, has been assured of a slot in the Liberal Party’s Senate slate in the 2016 elections.

PhilHealth should not use its funds to pay for the television advertisements of this soon-to-be administration senatorial candidate.

The money spent by PhilHealth for the TV ads would have been better spent to help upgrade the health-insurance benefits of its members, especially minimum-wage workers and salaried employees.

The TV advertisements supposedly cost at least P442,000 plus value-added tax every time they are aired for 30 seconds.

We must stress that PhilHealth’s governing board has a fiduciary duty to conserve the hard-earned contributions of workers for current and future benefit payments.

The members of the board of directors [of PhilHealth], even if they are all political appointees, are supposed to insulate the state-run insurer and its funds from partisan political activity.

Oh how quickly can so-called activists become coopted against the public interest when they join the administration.

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5 Comments

  1. Sir Boholano. Kaw kasi eh ayaw mong maregular ang mga empleyado kaya ayun nag aabroad na lang. YUng contractual law mo ay pabor sa mga negosyanteng Intsik. Sayang sir.

  2. Let me take this opportunity to tell all OFWs that OUR BELOVED RP IS NOT 100% ECONOMICALLY BENEFITTED BY OUR REMITTANCES…time and time again when article about OFW come about like this, I try to squeeze this “outside the box brainstorming” debacle of magnitude proportion and try to tell our Gov’t to do something about it. We OFWs our sweat and blood that we exchange to earn foreign currencies, our efforts to help our motherland benefit from these foreign currencies (FC) we remit is not 100% transfused to the lifeblood of our economy. Why you may ask……because some if not most of us remit our hard earned FC through some unscrupulous firms masquerading as legit. When remitting through these firms our relatives recieved STALE CASH already in circulation (recycled money) while the FRESH CASH is deposited by these firms in their foreign banks. RP needs FRESH CASH to make robust its economy in order for us to shorten our stay abroad and live with our families, robust economy means jobs for us OFWs in RP.

    Taking the numbers in this column $12.08B/3.5MOFW/6mos = $575/OFW average monthly remittance. Isn’t this strapolation looks shievering, the mean average is low (seems like all OFWs are working as MAIDS with this)..and where is the rest? There is my point, some amount we sent home do not reach as FRESH CASH in our banking system.

    And our gov’t Finance Dept full with CPAs, CFMs, MBAs, PHDs ( pretty hard d–k) are not looking into this? BOI devise incentives for foreign investors, BSP pays interests on sovereign bonds floated because they need money to service RP debts. OFW remittances are the cheapest source of Funds for RP gov’t, why not device an incentive for OFW remittances? Only the OFWs need to remit through RP gov’t recognized remittance centers abroad, which RP can create by using diplomatic means. There I have given the idea…let the RP gov’t draw the INCENTIVES and OFWs will remit to these remittance centers. OFWs must be INCENTIVIZED not ROBBED and being called HERO for nothing.

    Mr. Herrera the trickle down effect of OWFs remittances can be more beneficial to RP if all remittances in form of FRESH CASH reach our country, I hope I can enthused from you Mr. Herrera to further this out-of-the-box thought provoking piece. I will leave my e-mail just in case….rll6358@hotmail.com

  3. Shame for all those aspiring Candidates of Pinoy Administration. This Ads for Ms Hontiveros Baraquel is a glaring act committed againts the taxpayers money or Philhealth contributors. It started from Mar Roxas Ads many month ago, saying he is not campaigning but look, he is making Filipinos stupid, my gosh. We can see more Ads this coming months from LP candidate and they will tell you, paid by thier supporters!Who are those supporters? You guess, the money they spent for the ads are taxpayers money.Anyway, LP will not win the Presidency! i can feel it! Filipinos are saying it now, so need for Ads, tapos na ang laban, OFW for BBM!

  4. some malakanyang high ranking lackeys made some ludicrous statement about the “remittances” doesn’t go to the government directly daw, because it goes to the economy! well thank God for that! it would be a different story if the govt. gets hold of it!