Focus on the Global South - Philippines Programme

By Julie de los Reyes

2008 clocked in a number of highs and lows in labor migration.

Amid the raging economic maelstrom globally, the year registered a record of $16.9 billion in total remittances, the highest since the government started monitoring remittances in 1989.  Deployment figures broke past the one million mark by as early as September, sending more than 1.22 million OFWs to over 190 host countries this year.

With the remittances and deployment figures churning, the government’s optimism remained equally high throughout the year.   The country’s strong macroeconomic fundamentals, it was said, have made the country more resilient to external volatility.   The economy will continue register growth, no matter how modest, even while other economies are on the verge of collapse.


Turbulent times

But 2008 may well be the last spurt in the country’s growth streak in overseas employment
Before the year closed, the first tangible signs of trouble came in droves at the country’s airport immigration: over two thousand factory workers from Taiwan have been sent home, and about five thousand more are expected to be laid off.  

A top OFW destination, Taiwan employs an estimate of 100,000 OFWs, primarily in its garment and electronic industries.  With the economic downturn forcing a scale down in these industries, Taiwanese companies are hard pressed to cut back on hiring, especially of foreign workers, and to terminate the contracts of existing employees in some cases.
Aside from Taiwan, other major labor-receiving countries have started feeling the brunt of the economic crisis.   The Middle East, a leading OFW destination which accounts for about 1.8 million of the estimated total of 8 million OFWs world wide, have already stalled or postponed a number of construction projects and other ventures as the declining price of oil takes its toll on their economic activities.  In Asia, countries like Macau forewarned of a possible 50 percent reduction in foreign workers in 2009 as it anticipates a dramatic decline in its tourism revenues.

Add to this, the Philippines’ major source of remittances, the United States, has spiraled into economic recession taking with it 2.7 million jobs last year, the highest since the Great Depression.  

Come 2009, all signs point to more trouble ahead.

Push turns to shove

Despite Malacanang’s claim to the contrary, there are certainly good reasons to be worried.  Remittances, after all, constitute more than ten percent of the country’s GDP, even overtaking the share of foreign direct investments.   With the economic downturn projected to worsen this year, fewer jobs will be available, leading to fewer deployments, more retrenchments, and lower remittances. 

The already grim prospects for 2009 were further compounded by the government’s aggressive marketing and deployment of Filipino workers overseas, culminating to the signing of Administrative Order No. 247 and 248 which took effect early this year.  

AO 247 signals a shift in the POEA’s function which will now be refocused “from regulation to full-blast market-development efforts, the exploration of frontier, fertile job markets for Filipino expatriate workers.”  It directs the POEA to break through the 200-country barrier and scout for new labor markets that can offset the decrease in demand in traditional host-countries like the United States.   Already, negotiations in countries like Bulgaria and Romania are under way, and a pilot project that would generate 1,500 new jobs in UAE for Filipino workers has recently been launched.  

In support of AO 247, AO 248 directs DOLE and Overseas Workers Welfare Administration (OWWA) to set up help desks in every province to facilitate the matching of skills of workers to available jobs in the country or abroad.  AO 248 also allocates P250 million for the Filipino Expatriate Livelihood Support Fund as cushion to the impacts of the global recession on OFWs.  The said fund, it was later revealed, will draw from the OWWA membership funds which came from OFWs themselves.

President Arroyo struck the right note by recognizing that “In these trying times for the Filipino expatriate worker, the government should not sit idly and do nothing. It is now payback time for the government and the heroic efforts of the expatriate Filipino workers should not go unappreciated.”  But it was a good idea executed poorly.  The two administrative orders will form the backbone of the government’s efforts this year to mitigate the impacts of the global crisis to overseas employment.  But they represent no less than a blatant promotion of labor migration in a desperate attempt to assuage the economic ills in the domestic economy that are becoming more evident and harder to ignore as the global recession deepens. 

The Upside of failure

Like in the past, Filipino migrant workers will continue to pay for the inability of the government to harness its local economy.  Only this time, with the increased job insecurity abroad, they are even more vulnerable to abuse.  Ellene Sana, executive director of Center for Migrant Workers, cautions that “Migrant workers will be desperate for work and will accept anything just to keep their jobs.  When you’re desperate…you’ll settle for anything you can get.” 

This is true for the government as well.  The impact of the crisis is proving to be more severe than expected.  The DOLE initially anticipated as much as 50,000 OFWs could be displaced this year.  Just this first quarter however, actual unemployment figures abroad have already exceeded initial projections triggering desperate policy actions on the part of government—to the point of seriously contemplating lifting the deployment ban in Iraq, if it will bring millions of job opportunities for Filipino workers.

Amid the flurry of measures put in place by the government to sustain labor migration, even more glaring is the lack of a long-term strategy for an effective and lasting solution to unemployment within the country.  The employment generation programs proposed by the government are merely interim measures, substantially limited in reach and vision.  What is needed at this point is the same kind of energy that the government puts into exploiting the new job markets abroad, channeled into exploring possible ways of reinvigorating the country’s agricultural and industrial sectors to generate employment back home.  The National Statistics Office reports that the number of unemployed last year stood at 34.53 million, higher by 861,000 than the preceding year.   The electronics and garment industry, which represents the country’s two biggest exports, are expected to add to the unemployment figures in 2009. Modest estimates predict that 60,000 workers from the electronics industry alone may be affected by factory closures and retrenchments. 

Even at times of increased uncertainty globally, turning to outside markets for solutions remains the classic government response.  But for how long overseas employment will be a viable option remains to be seen.  With the crunch in labor markets and with more and more countries reserving employment for its local residents, the government may find itself with no other recourse but to finally turn inward and create opportunities for employment in the local market.  It is a task long overdue, but it is only in recognizing that the economy cannot be built solely on the back of overseas employment can sustained economic growth be possible in the long term.  And this may well be the best-case scenario for 2009.