Migrants sent home through official channel a total amount of $160 billion in 2004, exceeding development aid from all sources by 50 percent. Another 50% of the total remittances are estimated to be sent through informal channels. These figures come from the recently-released Global Economic Prospect 2006 Report of the Washington-based World Bank.
Remittances are the money that foreign-born workers send to their relatives and/or communities abroad. The countries receiving the most in recorded remittances in 2004 are India ($21.7 billion), China ($21.3 billion), Mexico ($18.1 billion), France ($12.7 billion), and the Philippines ($11.6 billion).
“Migration is truly a global phenomenon,” says Dilip Ratha, one of the co-authors of the bank report. “Many countries, both developed and developing, both send and receive migrants, and both send and receive remittances.”
The huge and increasing amount of migrant remittances triggered development agencies, governments, and the private sector to raise the discussions of remittances at the national, regional, and international levels.
In 2003, the international conference on Migrant Remittances: Development Impact, Opportunities for the Financial Sector and Future Prospects – convened by the Department of Foreign International Development (DFID) of the United Kingdom and the World Bank in London – attracted over 100 participants from 42 countries. They included representatives from banks and non-bank financial institutions, government policy makers, multilateral and bilateral donors, United Nations and other international agencies, non-governmental organizations, academics and consultants.
During the G8 Summit in 2004, it acknowledged the conference’s “Action Plan on Poverty,” which recognized the importance of remittances in playing a key role in private-sector development efforts by enabling families to receive needed capital for education, housing and small business start-ups and expansion, among others.
Remittances are often described as the new form of development aid and they are the biggest source of foreign inflows surpassing foreign direct investments and official development aid.
Experts claim that migrant remittances can fuel economic growth and fight poverty if properly harnessed. However, policy makers focus most of their attention only on how to address the high cost of remittance transfers. Effective and productive management of remittances requires not only cutting costs of remittances; it also needs an enabling environment both in sending and receiving countries where popular support from migrants and cooperation with other stakeholders are harnessed.
From the Philippines, an estimated 8 million citizens – comprising 10% of the country’s total population – are scattered in 126 countries. They toil under the scorching desert sun or bitterly cold winter. Some of them work in different levels of position and in various sectors: from domestic helpers in Hong Kong to high tech jobs in Silicon Valley, California. According to the World Bank estimates, remittances of Filipino migrants will reach US$ 12 billion in 2005.
Beyond direct help to their families to meet basic needs such as housing, food, health, and education, Filipino migrants also provide assistance and share their expertise and knowledge with their communities back home.
“There are about 12,000 Filipino organizations worldwide, of which around 4,000 are recorded to be engaged in giving back to their homeland or hometown,” wrote Ding Bagasao, chair of the Economic Resource Center for Overseas Filipinos, in one of his e-mail messages.
The Commission on Filipinos Overseas, which mobilizes and monitors donations from Filipinos abroad, has recorded about 1.3 billion pesos worth of donations from overseas Filipinos residing in North America, Oceania and Europe, with about 82% coming from the United States alone. “Donations preponderate to calamities, medical missions, equipment and investments,” Bagasao reports.
In 2003, the Bangko Sentral ng Pilipinas estimates about US$218 million were remitted by Filipinos overseas in the form of gifts and donations that were distinct from the money home sent by migrants to their families. “This is greater than the amount of taxes paid to the government by the top four Philippine corporations in the last four years,” Bagasao claims.
Unfortunately, there is a dearth of information about this gift-giving of hometown associations. Unlike in Mexico, which presently referred the phenomenon to as “Diaspora Philanthropy,” no such things are reported in the Philippines.
“Tales about Diaspora philanthropy also reveals the other face of the international migration phenomenon that sweeps labor-exporting Philippines,” observes Jeremiah Opiniano, executive director of Institute of Migration and Development Issues. “For a country where the tragic angles of migration are prominent, like the hanging of Flor Contemplacion in 1995, ‘good news for the poor’ tales… are hardly told.”
Gift-giving is not exclusive among professional migrants in the United States. As an example, Opiniano cites Pozorrubio, a town in Pangasinan which has over 6,000 people working abroad. “Pozorrubian domestic workers in Hong Kong stage beauty pageants so that they can raise money to ship medical equipment, construct small chapels, and even buy monobloc chairs for fiesta celebrations,” Opiniano told the participants of Diaspora Philanthropy conference in Manila recently.
Another example is the hometown association of the southern California-based Butuan City Charities Foundation (BCCF). With a slogan of "Butuanons Helping Butuanons,” the BCCF conducts fund-raising campaign to finance its various projects in Butuan. The projects are being implemented by its local partner organization, the Butuan City-based Ivory Charities Foundation (ICF). The BCCF’s website reports that it has already “remitted Ph 994,000 to about 245 beneficiaries, 95 percent of whom are women. ICF's reported a 99 percent repayment of loans. ICF's goal is to extend microlending opportunities to the rest of Butuan City's 86 barangays.”
Then, there’s the Kapatiran Philippines, Inc (KPI) in Bansalan, Davao del Sur. The formation of KPI, a non-governmental organization, is supported by some Filipino migrants based in the Netherlands. KPI initiates capacity building and microfinance programs for poor enterprising women not only in Bansalan but also in neighboring towns as well (Matalam, Matan-ao, Makilala, and Kidapawan City). Since its inception in September 2003, KPI has disbursed a cumulative amount of Ph 10 million to 821 members, 90% of whom are women engaged in micro-enterprises.
KPI partners with Economic Resource Center for Migrants and Overseas Employees (ERCMOVE), a migrant-initiated foundation chaired by Corazon Dee, a former resident of Davao City. In 2006, ERCMOVE plans to conduct fund raising campaign to support the microfinance program and to construct the multi-purpose center of KPI. ETWA, a small Dutch funding agency, has already committed to co-finance the construction of the multi-purpose center. ERCMOVE facilitated the acquisition of the funding. Aside from KPI, ERCMOVE also assists Milamdec Foundation, a foundation based in Xavier University in Cagayan de Oro City, has long been engaged in social and financial services to farmers and agricultural growers for the past 20 years.
“Migrant Filipinos have begun to make a difference in small towns and cities around the country,” claims Opiniano, a staunch advocate of Filipino Diaspora philanthropy.
“In an era of accelerated globalization, the relationship between Diaspora philanthropy and the economic and social development of many countries is increasingly relevant,” points out Peter F. Geithner, co-editor of Diaspora Philanthropy and Equitable Development in China and India.
However, Manuel Orozco, senior associate of Inter-American Dialogue cautiously warns that “philanthropy provided by the hometown association (HTA) to their community of origin doesn’t always translate into development. And even when it is more consistent and long-term, the provided funds do not necessarily result in the eradication of poverty.”
Orozco conducted pioneering studies on Mexican hometown associations and continues to support the inclusion of migrants in policy-making processes at levels as he sees “migration and remittances have come to symbolize the human face of globalization.”
To maximize the benefits of remittances, Orozco recommends reducing the high cost of remittance transfer, promoting financial literacy, and linking remittance with microfinance. Likewise, hometown associations must work in tandem with international organizations, private sector and governments to increase the worth value of their development projects, and forge strategic trade alliances.
Indeed, capturing a share of remittances for development needs transparent and coherent policies; relevant enabling environment; and a full recognition and appreciation of the positive contributions of migrants to the development of their countries of origin.
Published in MindaNews, 02 January 2006
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