Excerpts from a Paper delivered to the Council of Liberals and Democrats (CALD) –Alliance of Liberals and Democrats for Europe (ALDE) - Liberal International (LI) Meeting - June 22, 2006, Philippine International Convention Center, Pasay City

By Felicito C. Payumo
Former Congressman, Ist District of Bataan
Former Chairman/Administrator, Subic Bay Metropolitan Authority

“Migration and Globalization of Labor”

The combination of a rapidly expanding population, an economy unable to provide jobs for its people, and the substandard living conditions in the country has caused increasing numbers of Filipinos to look elsewhere for employment.

Though there were emigrants before the 70s, mass labor migration began during the early Marcos years, when a high demand for manpower developed around the oil boom.  But immigration in this period was largely male, and mostly construction workers and seafarers.  They honed their skills working with the engineers of Bechtel, Brown and Root, and other multinational construction companies and brought them back home. That’s what  happened in India and Taiwan. Their returning IT engineers from Silicon Valley were responsible in developing Bangalore to be the software capital of India, and Hsin Chu Park as the hardware manufacturing and technology center for Taipeh. Instead of a brain drain, there was “brain circulation”  which benefited both receiving and sending countries.                                                             

Shift in Global Demand

But in recent years, different global demands have developed.  Japan, while being strict on male emigrants, had opened up to female entertainers, euphemistically dubbed GROs or Guest Relations officers. As the economies of the Asian NIEs grew, new wealthy families began looking for housemaids.  Filipina women migrated in droves to Hong Kong, Singapore, and Taiwan to clean dishes, scrub floors, and prepare food. They included teachers who, unlike the engineers and construction workers, came home deskilled for non-use of their professional training.  The most recent demand has come from the ageing population of Europe and the United States with their need for health services. There are now nearly 300,000 of our young people who work as nurses outside of the country. Think about that, a third of a million of our nurses have left our shores! And our doctors have followed suit.. They are putting away their stethoscopes to put on the nurse’s caps and gowns, placing our health system in peril.  So we trained more nurses. In 2003, we added 32 new nursing schools, as another 56 applied for accreditation. Computer schools have turned, overnight, into nursing schools. But this proliferation of schools cannot but affect negatively the quality of education. In 2002, of the 223 nursing schools, 136 posted a passing rate below 50%, and at 39 schools, not a single graduate passed the board exam! I am sure the reported nursing exam leak was symptomatic of the pressures to respond to market demand. On the other hand, our medical schools go begging for students. I was told of at least one medical school that had zero enrollment.

Let me give an overview of where the 8 million Filipinos abroad are residing.  Some 2.9 million have taken up permanent residence abroad, with the majority moving to the United States and Canada.  A bigger group of 3.4 million workers are on temporary contracts.  These are more evenly distributed – laborers in the oil fields of Saudi Arabia, Kuwait and the UAE, housemaids in Hong Kong and Singapore, nurses in Italy and in the United Kingdom, entertainers in Japan, and  seamen around the world.  There are also an estimated 1.5 million who are living abroad illegally, largely in the United States and Malaysia. The number of Pinoys going abroad grows every year – we recently passed, for the first time, 1,000,000 per year emigrating for jobs in other countries! Today, the number of OFWs is estimated at 8 million.

No.2 Country in Dollar Remittance

And they are sending money home in droves. In the period 1995-1999, we were the world’s second largest recipent of remittances, receiving nearly US$30 billion. We beat Mexico and are second only to India. Every year, the amount remitted through official channels total $12 billion. This amount vastly outweighs our aid receipts – for every $1 of aid sent through official government and multilateral channels, individual Filipinos sent home $8 of money they made through their labor in foreign lands. And this does not consider the amount sent though informal channels.

Education and medical expenses make up the top priority expenditures, after paying off debts due to recruiters and other creditors. According to a survey report by the BSP, 40% of OFW families save but only 10% of those who save, invest. That means 60% of families spend their receipts on consumption, such as fast food and household appliances. As a result, Jollibees and McDonalds are a thriving business, and the place for people of all ages to hang out is the malls.  The grand opening of the world’s third largest mall just took place last month, the so-called Mall of Asia next to the Senate complex.  The mall is so large that they had to build a motorized tram to cart people back and forth between shops. Money is also spent on house improvements. We also know that the real estate boom is buoyed up mainly by OFW remittances. But of those who go into business, many are guided by the gaya-gaya syndrome . That is why tricycles clog up the streets of many towns. We often wonder if they make enough money.

After three decades of Filipino diaspora, there are difficult questions we must ask ourselves. When remittances are equivalent to 15% of our gross national product, should we consider a “remittance economy” a steady pillar that we should depend upon, providing a disincentive to work for recipients, exposing our women to vulnerabilities away from home, and breaking apart the fundamental family unit? Previously, children grew up without a father figure. Now, they miss also their mothers. Tens of billions of dollars have flowed into our country in remittances, but has our government initiated a program to harness this flow productively? Our compatriots abroad would like to help in rebuilding economy but they have to be shown how, and in ways that will not put a hole in their pockets. They have been victims of far too many investment schemes that got their fingers burned. The least we can do is to ensure that their hard earned money is not squandered but utilized to build an economy that provides more lasting and widespread benefits.

Micro-enterprises- An investment alternative for our OFWs

I do not have ready made answers for any of these questions, but micro-enterprises, especially, micro-finance institutions, and agricultural cooperatives can be energized by the flow of remittance dollars.   

OFWs have a range of incentives to invest in MFIs. First, the returns they receive on their investments can parallel returns that they would receive in more traditional banks overseas.  Second, their money goes directly to supporting families in their home provinces, providing them with access to financial products and services.  Particularly for recent emigrants who have established themselves as full-time citizens overseas, but who retain connections at home, this serves well both their bottom line and their sense of commitment to home.

In the area of agricultural cooperatives, do you know that we are importing $500 million of milk and dairy products, annually but are producing only 1% of our consumption? That is a fact. But there is also a myth. The myth is that we cannot have a successful dairy industry because we are in the tropics. But Thailand has shown us the way. With a Holstein and Indian Sahiwal crosssbreed, Thailand is now producing 45 % of their consumption. We produce 12,000 M.T. of milk while they produce 825,000 M.T. And where is Thailand? Right there, closer to the equator! Need I say more?

And the economics of dairy farming are far more attractive than growing rice. For a given hectare of land, a farmer can have 15 times more income raising milk animals than planting rice. But we don’t even have to convert rice lands to pasture. We have so much un-irrigated areas in the uplands where only cogon grass grows. All we have to do is plant the right kind of grass!

Indeed, Government should look into this industry far more seriously than it has in the past. Not only will we reduce our imports. We can have a milk based feeding program instead of noodles for school children who need protein for their brains. A report from multinational institution says that 32 % of our children are malnourished.  Our OFWs will now send money home to buy a few heads of cows or carabaos. Their tatay or kuya will be milking cows instead of pedalling tricycles. The livelihood of thousands of our farmers will be enhanced. The commercial market has so expanded that processing plants for milk and dairy products are now viable investment opportunities for businessmen.

Before I finish, however, I would like to  pose these questions: When the label Filipino has come to be associated in foreign nations with the exploited dancer in Japan, with the overworked maid in Hongkong, when the word Filipina has become a synonym for maid or nanny in London, when a young man chooses to turn over his Philippine passport for a Canadian, when a young girl sees nursing school as her means of escaping her place of birth, when young girls are trained at an early age to become ago-go dancers, when you have all these on the global stage, what is the value in being a Filipino?

This has never been an easy question, but globalized labor has made it all that much more challenging. It is up to us to answer it.