OFWs: Saving an Economy through Slave Deployment

By JM Villero

 

DEspite the unabated strengthening of the peso against the dollar (which meant, in the uncomplicated language of ordinary Filipinos dependent on remittances, lesser cash from abroad), the search for greenbacks continued to lure hordes of Filipinos overseas.

Exporting labor, considered a temporary safety valve and source of foreign exchange when it was first pursued as a labor policy by the Marcos administration in the 1970s, has become a way of life for Filipinos. In fact, labor migration has become, in the words of New York Times writer Jason DeParle, ‘a civil religion.’ One in every 7 Filipino workers are employed overseas at any given time.

The latest migration statistics show that about 10 percent of the country’s 89 million live abroad. Some 3.2 million of them are permanent migrants, while about 3.6 million are OFWs. It is estimated that some 1.3 million Filipinos are overseas illegally or are undocumented aliens abroad. Almost half of Filipinos staying overseas illegally are in the Americas (US and Trust territories) (see Table 1).

 

Table 1: Stock Estimate of Overseas Filipinos, as of December 2004

REGION / COUNTRY	PERMANENT 1/	TEMPORARY 2/	IRREGULAR 3/	TOTAL
WORLD TOTAL	3,187,586	3,599,257	1,296,972	8,083,815
AFRICA	318	58,369	17,141	75,828
EGYPT	54	2,620	1,420	4,094
EQUATORIAL GUINEA	0	2,569	150	2,719
LIBYA	75	5,440	485	6,000
NIGERIA	18	11,750	586	12,354
OTHERS / UNSPECIFIED	171	35,990	14,500	50,661
ASIA , East & South	91,901	1,005,609	443,343	1,540,853
BRUNEI	26	21,762	1,700	23,488
HONGKONG	404	194,241	2,700	197,345
JAPAN	83,303	238,522	31,428	353,253
KOREA (South)	4,850	33,285	9,015	47,150
MACAU	56	17,391	1,000	18,447
MALAYSIA	313	52,337	300,000	352,650
SINGAPORE	152	64,337	72,000	136,489
TAIWAN	2,037	154,135	4,500	160,672
OTHERS / UNSPECIFIED	760	229,599	21,000	251,359
ASIA , West	2,312	1,449,031	112,750	1,564,093
BAHRAIN	64	33,154	3,500	36,718
ISRAEL	104	14,051	23,000	37,155
JORDAN	108	5,885	7,000	12,993
KUWAIT	93	80,196	11,500	91,789
LEBANON	19	28,318	6,100	34,437
OMAN	20	18,941	1,500	20,461
QATAR	13	57,345	1,000	58,358
SAUDI ARABIA	243	976,134	18,000	994,377
UAE	405	185,562	20,000	205,967
OTHERS / UNSPECIFIED	1,243	49,445	21,150	71,838
EUROPE	174,387	506,997	143,035	824,419
AUSTRIA	22,017	1,956	2,000	25,973
BELGIUM	3,583	3,484	5,533	12,600
FRANCE	1,098	4,866	26,121	32,085
GERMANY	42,882	8,346	4,400	55,628
GREECE	88	17,058	8,000	25,146
ITALY	4,934	85,527	48,000	138,461
NETHERLANDS	10,421	2,920	2,000	15,341
SPAIN	16,332	6,960	2,000	25,292
SWITZERLAND	922	7,025	6,700	14,647
UNITED KINGDOM	52,500	56,341	7,481	116,322
OTHERS / UNSPECIFIED	19,610	312,514	30,800	362,924
AMERICAS / TRUST TERRITORIES	2,689,722	292,892	549,725	3,532,339
CANADA	369,225	32,766	2,975	404,966
UNITED STATES	2,271,933	101,249	350,000	2,723,182
CNMI	1,288	16,753	1,250	19,291
GUAM	45,968	1,800	500	48,268
OTHERS / UNSPECIFIED	1,308	140,324	195,000	336,632
OCEANIA	228,946	57,357	30,978	317,281
AUSTRALIA	211,664	930	2,900	215,494
NEW ZEALAND	17,182	307	120	17,609
PALAU	5	3,702	400	4,107
PAPUA NEW GUINEA	64	5,030	7,339	12,433
OTHERS / UNSPECIFIED	31	47,388	20,219	67,638
SEABASED WORKERS		229,002		229,002
1/ Permanent - Immigrants or legal permanent residents abroad whose stay do not depend on work contracts.
2/ Temporary - Persons whose stay overseas is employment related, and who are expected to return at the end of their work contracts.
3/ Irregular - Those not properly documented or without valid residence or work permits, or who are overstaying in a foreign country.
Prepared by the Commission on Filipinos Overseas from CFO, DFA, POEA and other sources covering 194 countries / territories.

 

Exodus

And the migration figures are only increasing.

In 2006, some 1.06 million workers fled the country – a record in the history of labor deployment.

By all indications, this record will be topped this year. The Philippine Overseas Employment Administration (POEA) recorded a total of 546,212 temporary Filipino contract workers deployed in the first six months of 2007. This means that more than 3,000 Filipino workers leave the country everyday.

The dispersal of Filipino labor is such that, as the anecdote goes, there’s not a single independent state, no matter how obscure or tiny, that does not host an OFW (overseas Filipino worker). Filipino workers are scattered in 197 countries, although the favorite destinations remain to be the Middle East countries (in the Kingdom of Saudi Arabia alone, there are about a million Filipino contract workers 1 ), Japan, Hong Kong, Taiwan and Singapore (see Table 2).

Table 2: Percentage of Overseas Filipino Workers by Place of Work Abroad: 2006

Place of Work	Percent
Africa	1.7%
Asia	78.3%
East Asia	22.6%
Hong Kong	7.0%
Japan	6.0%
Taiwan	6.1%
Other countries in East Asia (ex., China, South Korea)	3.5%
Southeast and South Central Asia	9.9%
Malaysia	2.8%
Singapore	5.0%
Other countries in Southeast and South Central Asia (ex., Brunei)	2.1%
Western Asia	45.8%
Kuwait	4.8%
Qatar	3.7%
Saudi Arabia	21.8%
United Arab Emirates	9.2%
Other countries in Western Asia (ex., Bahrain, Israel, Lebanon, Jordan)	6.3%
Australia	1.2%
Europe	9.5%
North and South America	9.2%
Other countries	-
Country not reported	0.2%

Note : The estimates cover overseas Filipinos whose departure occurred within the last five years and who are working or had worked abroad during the past six months (April to September)   Source : 2006 Survey on Overseas Filipinos, National Statistics Office. Available at < http://www.census.gov.ph/data/sectordata/2006/of0602.htm>

As DeParle reports, OFWs “are literally everywhere, including the high seas.” About a fourth of the world’s seafarers are Filipinos.

And the returns are phenomenal – not only to the individual families, but even more for the country’s coffers.

 

Awash in cash

In 2006, a record US$12.8 billion entered the country courtesy of the OFWs. This makes the Philippines fourth among the developing countries that received remittances, next to India ($25 billion), China ($24 billion) and Mexico ($24 billion). 2

This year, the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is expecting remittances to top off at US$14.0 billion, or an increase of 10% from the 2006 figures. Preliminary records bear this out: in the first two months of 2007, remittances reached US$2.2 billion. According to the BSP, this is 22.6 percent higher than the US$1.8 billion inflow recorded in January-February of 2006.

As of August 2007, OFW cash inflows recorded by the BSP has already reached $9,337,678,000 (see Table 3).

The US$9.3 billion constitutes money that came in through banks. Cash inflow could even be higher, since nearly a fifth of all remittances are coursed through so-called informal channels, according to a BSP study.

 

Table 3: Overseas Filipinos’ Remittances 1/

Period	Amount	Increase	Growth Rate
2002	$6,886,156,000
Sea-Based	$1,199,183,000
Land-Based	$5,686,973,000
2003	$7,578,458,000	$692,302 ,000	10.05%
Sea-Based	$1,298,223,000
Land-Based	$6,280,235,000
2004	$8,550,371,000	$971,913 ,000	12.82%
Sea-Based	$1,464,930,000
Land-Based	$7,085,441,000
2005	$10,689,005,000	$2,138,634 ,000	25.01%
Sea-Based	$1,669,358,000
Land-Based	$9,019,647,000
2006	$12,761,308,000	$2,072,303 ,000	19.39%
Sea-Based	$1,949,290,000
Land-Based	$10,812,018,000
2007 (January-May)	$5,918,425 ,000
Sea-Based	$920,972,000
Land-Based	$4,997,453,000
January	$1,099,354,000
Sea-Based	$169,630,000
Land-Based	$929,724,000
February	$1,085,544,000
Sea-Based	$165,286,000
Land-Based	$920,258,000
March	$1,304,847,000
Sea-Based	$198,762,000
Land-Based	$1,106,085,000
April	$1,191,540,000
Sea-Based	$178,871,000
Land-Based	$1,012,669,000
May	$1,237,140,000
Sea-Based	$208,423,000
Land-Based	$1,028,717,000
June (Sea- & Land-Based)	$1,115,753,000
July (Sea- & Land-Based)	$1,096,558,000
August (Sea- & Land-Based)	$1,206,942,000
2007 (January-August, Sea- & Land-Based)	$9,337,678,000

1/  These figures reflect only remittances coursed through banks. Source: http://www.bsp.gov.ph/publications/tables/2007_10/news-10152007b1.htm

No wonder then that the government would rather send its workers abroad instead of generating jobs locally. The country’s economy is practically propped up by dollar remittances from what the Philippine government hails as ‘bagong bayani’ (modern-day heroes).

One curious aspect of the OFW remittance is its strong link to the peso’s robust performance. In the past months, the peso has continued to strengthen. The BSP reports that in the second quarter of this year, the peso further appreciated by 3.6 percent, to average P46.93/US$1. This is a remarkable spike of about P10 compared to the average in October 2004, which was P56.3414/US$1.

The peso’s climb against the dollar may be good news to some people. But to the millions of families dependent on dollar remittances, every single-digit hike of the peso is a disaster. With the dollar pegged much lower than in previous years, this means OFWs have to send home more dollars. But the painful irony in this set-up is that it is precisely this generous inflow of dollar remittances that keeps the peso strengthening. As more remittances flow in, so does the peso strengthen.

 

Remittance economy

With about 15 percent of the gross domestic product (GDP) coming from remittances, the Philippines has become “the most overseas remittance-dependent economy of any significant size in the world,” according to the independent think-tank IBON Foundation. In no other sizable economy are remittances as significant as in the Philippines. Mexico’s $24 billion remittances, for example, account for only 3 percent of its GDP.

This ought to be a cause for alarm, IBON says, because the country should be kept afloat not by the volatile remittances of temporary contract workers abroad, but by a strong domestic economy.

With a domestic economy all but debilitated, the country’s capacity to generate local jobs is feeble. With no hopes for employment locally, Filipinos naturally have to brave overseas employment market.

 

Unemployed

Official employment data for the first quarter of 2007 shows that the number of those without jobs increased by 13,000, reaching 2.9 million as of January. Underemployment figures also reflect a similar increase: an addition of 442,000, pegging the underemployment figure at 7.2 million.

President Arroyo recently boasted that her administration has created some 6 million jobs in the last six years. This is misleading, counters IBON. The majority of the jobs reportedly created “were among the lowest earning or outrightly non-paying ones.” An IBON study shows that “around 673,000 or more than half of the net increase in jobs of one million in April 2007 from last year are in unpaid family work (524,000) and in domestic household help (147,000).” The study also notes that “105,000 jobs [were] lost in the manufacturing sector in April 2007 from the same period last year.”

The jobs created were not “secure, stable and long-lasting,” even as unemployment and underemployment levels continued to rise.

 

From the frying pan…

But what kinds of jobs await the intrepid Filipino migrant worker? And more importantly, what are the employment conditions and working environment in which the country’s ‘bagong bayani’ labor?

Latest data from the National Statistics Office show that for every three OFWs, one works as a laborer or unskilled worker (i.e., domestic helper, cleaner, and manufacturing laborer). Unskilled workers comprise 35.1 percent of the total number of OFWs (refer to Table 4D). Receiving scandalously low wages, they are little more than indentured servants. Their combined remittance in 2006, estimated by NSO at P15.995 million, comprised only 15.69 percent of the total OFW remittance of P101.964 billion (refer to Table 5D).

The sorry plight of these laborers is well documented. Stories of physical and sexual abuse endured by Filipinas working as domestic helpers have long been told and retold. Last year, for example, domestic helpers repatriated from Lebanon arrived home with harrowing stories not only of the bombings, but also of being abused, being held prisoners in their employers’ houses.

Indeed, even as the government triumphantly blares its remittance windfall, it continues to ignore painful issues of overseas workers’ safety and welfare. Even as it benefits from the cash inflow made possible through the uspeakable sacrifices of millions of deployed laborers, the government refuses to pay real tribute to its ‘bagong bayani.’ Because if it truly salutes its modern-day heroes, it will seriously institute a meaningful employment program that will ensure that the mass exodus of Filipino workers will soon be stemmed.

 

Table 4A: Total and Average Remittance of Overseas Filipino Workers: 2005 and 2006

	Total Remittance (in million pesos)		% Increase	Average Remittance (in pesos) 1/		% Increase (Decrease)
	2006	2005		2006	2005
Total Remittance	101,964	85,148	19.75%	78,300	77,100	1.56%
Cash Sent	75,861	60,034	26.36%	61,200	57,300	6.80%
Cash brought home	21,373	21,224	0.70%	79,700	91,600	(14.93%)
In kind	4,731	3,890	21.62%	17,100	16,000	6.88%

 

Table 4B: Total and Average Remittance of Overseas Filipino Workers by Mode of Remittance: 2005 and 2006

Mode of Remittance	Total Remittance (in million pesos)		Average Remittance (in pesos) 1/
	2006	2005	2006	2005
Total Cash Remittance	75,861	60,034	61,200	57,300
Banks	60,149	45,444	66,300	61,100
Agency/Local Office	1,786	1,777	67,300	67,700
Friends/Co-workers	614	544	20,800	21,600
Door-to-Door	10,051	11,562	47,400	49,500
Others	3,261	707	50,400	37,900

Table 4C: Total and Average Remittance of Overseas Filipino Workers by Place of Work: 2005 and 2006

Place of Work	Total Remittance (in million pesos)		Average Remittance (in pesos) 1/
	2006	2005	2006	2005
Africa	2,708	1,389	130,100	87,100
Asia	52,531	39,902	54,300	49,400
East Asia	16,850	13,496	57,400	49,000
Southeast and South Central Asia	4,464	3,266	38,800	36,100
Western Asia	31,217	23,140	55,800	52,400
Australia	840	1,803	59,700	70,700
Europe	9,588	8,705	82,900	86,300
North and South America	10,075	7,726	85,100	83,400
Other countries	-	97	-	86,600
Country not reported	118	411	50,400	102,100

 

Table 4D: Total and Average Remittance of Overseas Filipino Workers by Major Occupation: 2005 and 2006

Major Occupation	Total Remittance (in million pesos)		Average Remittance (in pesos) 1/
	2006	2005	2006	2005
Officials of government and special-interest organizations, corporate executives, managers, managing proprietors and supervisors	4,117	2,366	119,700	92,400
Professionals	9,119	8,025	91,000	86,800
Technicians & associate professionals	7,668	5,877	91,000	72,700
Clerks	3,393	2,713	65,200	60,100
Service Workers & shop & market sales workers	8,666	7,166	50,100	54,100
Farmers, forestry workers & fishermen	221	168	57,000	83,100
Trades & related workers	13,666	10,443	69,900	62,700
Plant & machine operators & assemblers	12,951	10,974	73,200	70,900
Laborers & unskilled workers	15,995	12,210	38,200	35,300
Special occupations	64	90	66,000	62,100

 Notes: 1/ Average remittance is expressed to the nearest thousands. The estimates cover overseas Filipinos whose departure occurred within the last five years and who are working or had worked abroad during the past six months (April to September) of the survey period   Source: 2005 and 2006 Survey on Overseas Filipinos, National Statistics Office. Available at http://www.census.gov.ph/data/sectordata/2006/of0603.htm

Table 5A: Number and Percentage Distribution of Overseas Filipino Workers by Selected Characteristics: 2005 and 2006

	2006	2005
Total Number of OFWs	1,515,000	1,326,000
Overseas contract workers	91.4%	91.6%
Other overseas Filipino workers	8.6%	8.4%

 
 
Table 5B: Number and Percentage Distribution of Overseas Filipino Workers by Sex: 2005 and 2006

	2006	2005
Total Number of OFWs	1,515,000	1,326,000
Male	49.6%	50.4%
Female	50.4%	49.6%

 
 
Table 5C: Percentage Distribution of Overseas Filipino Workers by Age Group: 2005 and 2006

	2006	2005
Both Sexes
15 – 24	10.7%	11.8%
25 – 29	24.6%	23.2%
30 – 34	19.8%	19.1%
35 – 39	15.0%	15.8%
40 – 44	12.8%	13.1%
45 and over	17.1%	17.0%
Male
15 – 24	6.6%	7.6%
25 – 29	20.3%	18.3%
30 – 34	19.7%	19.0%
35 – 39	16.5%	16.6%
40 – 44	14.7%	16.5%
45 and over	22.3%	22.1%
Female
15 – 24	14.7%	16.1%
25 – 29	28.8%	28.1%
30 – 34	20.0%	19.2%
35 – 39	13.5%	15.0%
40 – 44	11.0%	9.7%
45 and over	12.0%	11.8%

 
 
Table 5D: Percentage Distribution of Overseas Filipino Workers by Major Occupation: 2005 and 2006

Major Occupation	2006	2005
Officials of government and special-interest organizations, corporate executives, managers, managing proprietors and supervisors	2.7%	2.4%
Professionals	8.6%	8.8%
Technicians & associate professionals	6.8%	8.0%
Clerks	4.3%	4.5%
Service Workers & shop & market sales workers	13.8%	13.6%
Farmers, forestry workers & fishermen	0.4%	0.2%
Trades & related workers	14.7%	14.7%
Plant & machine operators & assemblers	13.5%	14.5%
Laborers & unskilled workers	35.1%	33.1%
Special occupations	0.1%	0.2%

 
Note: The estimates cover overseas Filipinos whose departure occurred within the last five years and who are working or had worked abroad during the past six months (April to September) Source: 2005 and 2006 Survey on Overseas Filipinos , National Statistics Office. Available at < http://www.census.gov.ph/data/sectordata/2006/of0601.htm>

 

Table 6: Number of Overseas Filipino Workers by Region of Origin: 2006

Region of Origin			Number (In Thousands)
National Capital Region			16.4
Cordillera Administrative Region			2.2
I	–	Ilocos I	7.6
II	–	Cagayan Valley	5.3
III	–	Central Luzon	14.5
IV-A	–	CALABARZON	16.8
IV-B	–	MIMAROPA	1.3
V	–	Bicol	2.5
VI	–	Western Visayas	9.5
VII	–	Central Visayas	5.5
VIII	–	Eastern Visayas	2.2
IX	–	Zamboanga Peninsula	2.2
X	–	Northern Mindanao	2.8
XI	–	Davao	3.1
XII	–	SOCCSKSARGEN	4.0
XIII	–	Caraga	1.1
Autonomous Region in Muslim Mindanao			3.1
Philippines, Total			1,515

Note : The estimates cover overseas Filipinos whose departure occurred within the last five years and who are working or had worked abroad during the past six months (April to September)   Source : 2006 Survey on Overseas Filipinos, National Statistics Office. Available at < http://www.census.gov.ph/data/sectordata/2006/of0602.htm>

 

Endnotes

1 For every five OFWs, one is employed in Saudi Arabia

2 It is further estimated that OFWs directly contribute about P13 billion or so every year to the country ’s coffers in the form of various transaction fees and service charges collected by the government (such as passporting fees, certification fees, and compulsory membership fees to the Overseas Workers Welfare Administration [OWWA]).

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