The year-end report about the estimated 10 million Filipinos (10% of the total Philippine population) spread in more than 100 countries and the estimated 14 billion dollars which overseas Filipinos sent money in 2006 dominate the Philippine newspapers. We can view this fact two ways:
Pessimistic view:
- Brain drain: the most ambitious, entrepreneurial highly educated leave the country
- Dutch disease effect – remittances cause exchange rate appreciation and weakening of export competitiveness
- Remittances are used for consumption, non-productive activities
- Remittances widens poverty gap in rural areas, after all the poorest of the poor cannot afford to go abroad and find jobs. It is still the middle class and those who have financial means who have chances to create more wealth; However, statistics also show that many of the unskilled workers come from the ranks of the poor but not the hardcore poor. Through their remittances we increase the number of our middle class.
- Migration creates dysfunctional families
Optimistic view
- Remittances are used for capital investments
- Migrant resources pay for child’s education and health investments which stimulate long-run growth
- Remittances have direct impact on household level
- Migrant remittances serve as informal insurance (shocks) for households and life cycle (marriage, death, fiesta, etc) in poor countries
- Migrants bring skills and knowledge (circular migration)
Many Western countries, especially in Europe favor stopping migration for the reason that it creates brain drain. This argument is now being disproved by many academics. Not all migrant workers are skilled and highly educated, and if they are educated, these people have no opportunities to work with decent salaries. The main problem lies on the inability of the countries to provide meaningful jobs, thus, migration is the only way out to rise up from poverty. Some academics also further ask what is worse: to have unemployed and idle highly educated at home, or send them abroad so they can send remittances and thereby helping fuel local economies?
In the case of the Philippines, de-skilling is indeed a problem: teachers working as domestic workers; doctors and nurses working as care givers; commerce graduates working in service sectors (hotels, etc.)
Do we run short of highly educated people in the Philippines? I don’t think so. Year after year, we produce college graduates but how many of them could get jobs with reasonable salaries in our country?
Migration is unstoppable and we could not prevent people going abroad to look for greener pastures. However, migration should be an option and not the last way out to escape poverty. Unfortunately, this is the case in the Philippines. Even those who have regular income could not afford university education of their children. So the strategy is, finish university and look for jobs abroad as soon as possible to recover the money spent on education.
There are many structural changes that should be done in our country if we want to unleash the development potential of our international migration. Remittances are private money and this should be seen as substitute for development aid. Our government should not also see it yardstick for economic prosperity. Our government should not also view remittances as a substitute for its inability to provide basic needs of our people.
The most direct link between migration and development in countries of origin is through remittances. According to Dr. Manuel Orozco, international remittance expert, “migration and remittances reflect to some extent the failure of governments to promote internal development of the country as well as the structure of inequality in the global economy, causing citizens to leave for other countries (and in some cases actually expelling or forcing them out) in search of better opportunities or attracted to ‘global production centres.”
Approximately 125 million workers send money home to support another 500 million family members living in households back home. Rene Ofreneo (Empowering Filipino Migrant Workers: Policy Issues and Challenges, International Labor Organisation, 2005) made a computation in the case of Filipinos working abroad. Assuming an average family size of 4 to 5, and that 4 million of the 7.3 overseas Filipinos are able to remit regularly, it might be said that about 16 to 20 million Filipinos are able to benefit directly from overseas labour migration.
Experts claim that migrant remittances can fuel economic growth and fight poverty if properly harnessed. However, policy makers tend to focus their attention on addressing the high cost of remittance transfers and neglect to engage diasporas directly in development. Effective and productive management of remittances requires not only cutting the costs of remittances but also creating an enabling environment in both sending and receiving countries and generating popular support and broad co-operation between migrants and other stakeholders. Remittances can be a powerful lever to open up financial systems, mobilise savings, generate small business loans, and multiply economies which can positively support millions upon millions of individual families and the communities in which they live.
To maximise the benefits of remittances, Orozco recommends 1) reducing the high cost of remittance transfer, 2) promoting financial literacy/financial democracy, and 3) linking remittance with microfinance. Likewise, hometown associations must work in tandem with international organisations, the private sector and governments to increase the worth value of their development projects, and forge strategic trade alliances. Orozco asserts that so far, most of the success stories about remittances are individual, not collective. This proves that despite the huge amount of remittance inflows, governments and development agencies have not yet really found the appropriate strategy to unleash the full development potential of remittances.
I only touched on the economic benefits of migration through migrants’ remittances, investments. Transnational entrepreneurs mobilise their contacts across borders to search new markets. Transnational activities of overseas Filipinos also include political (they can introduce the democratic values, good governance, accountability and transparency which they learned in democratically matured countries, and socio-cultural activities (they promote Filipino cultures,
Capturing a share of remittances for development requires transparent and coherent policies, the relevant enabling environment, and full recognition and appreciation of the positive contributions of migrants to the development of their countries of origin. However, it cannot be achieved without consideration of other migrant-related issues such as the human rights of migrants including women and the social costs of migration.
It is unfortunate that our government is fixated on remittances and does nothing to harness the potentials of overseas Filipinos. If only they tap the talents of migrants, perhaps we can make a difference.
This is the reason why I am urging the Filipino community abroad that the May election is the right moment to advance our Collective Migrant Agenda. Having said this, the intrinsic disunity and mistrust among overseas Filipinos is the first obstacle that we should overcome.
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