Page last updated at 01:39 Asia/Manila, Wednesday, 17 February 2010 PH
I can't help gloating over the accuracy of my forecast early last year that OFW remittances would increase by 4 to 5 percent rather than decrease by 6 to 10 percent as economists from international institutions were predicting. I did not have a sophisticated model like the ones of the World Bank and other agencies. In fact, their forecasting models were a liability because they were lumping all overseas workers in the world together to correlate the demand for them with world GDP. I knew from my instinct that Filipino workers should not be lumped together with other overseas workers. OFWs have characteristics that are superior to the average migrant worker from a developing country.
From my own personal experiences and the testimonies of hundreds of people I have talked to abroad, Filipinos are preferred to others because they have better personal hygiene (especially in the personal services sector); they smile more often than most others; they are quickly adaptable to different cultures; they learn new languages more easily because of their own multi-language background in the Philippines; they are multi-talented or multi-skilled; and in such professions as nursing, care giving and physical therapy, they are able to give tender and loving care. All these convinced me that even the worst global crisis will not significantly reduce demand for OFWs because the demand for them is income inelastic. They are usually the first to be hired and the last to be fired.
I am glad that my fellow economists at the University of Asia and the Pacific have actually analyzed the data on OFWs and their remittances during 2009, the worst year of the global crisis. According to a study of Dr. Peter Lee U, Dean of the School of Economics at UA&P, there was a significant drop in job availability in some markets (the U.S., not surprisingly, and Hong Kong) but this was offset by openings in others so that, on the whole the remittances grew by 4.2 per cent from January to September 2009. For the first three quarters, remittances from Asia grew a healthy 16.7 per cent. Early on in the recession, many Filipino workers were laid off and returned home from Taiwan, casualties of the electronics industry's slump. Consequently, remittances from Taiwan dropped by 46.1 percent for January to September 2009. Remittances from Hong Kong, another traditional employer of Filipino workers, also dropped 25.3 percent. Fortunately increases in remittances from Japan (56.6 per cent) and Singapore (33.3 per cent) more than compensated for these.
Remittances form Europe actually grew by 12.1 per cent despite a 27.3 per cent drop in remittances form Italy, the largest source in the region. Not surprisingly, remittances from the Americas dropped 1.1 per cent, dragged by the 9.7 per cent drop in remittances from the U.S. Fortunately, this was offset by the 56 per cent increase in remittances from Canada.
A blessing in disguise that resulted from the super-typhoons in September and October was the large increase in remittances from OFWs in October. According to economist Dorothy Jeanne Castaneda of UA&P, after Ondoy and Pepeng, remittances increased in September and rose further in October 2009. The typhoons seemed to have encouraged larger amounts of transfers from relatives overseas with a view of assisting affected families in their rebuilding efforts. In September, remittances from OFWs rose significantly to US $1.4 billion, posting a year-on-year increment of 8.6 per cent. As a result, cumulative remittances for the nine-month period increased by 4.2 per cent to reach $12.8 billion. Remittances from both sea-based and land-based workers expanded during the first three quarters of the year.
As of end-October 2009, total job orders processed reached 226,260, representing 43.9 per cent of the jobs needed (515,438). About 80 per cent of the total job orders processed was for service and production and transport-related workers. For the period January-September 2009, the major sources of remittances were the U.S., Canada, Saudi Arabia, UK, Japan, Singapore, United Arab Emirates, Italy and Germany. Although there was concern about the debt crisis in Dubai, my own judgement is that Filipinos will remained employed in most countries of the Middle East because they are in indispensable services and are not concentrated in construction.
From this analysis of what actually occurred in 2009, I can rest assured that overseas remittances will continue its upward trend in 2010, as the global economy gradually recovers from the Great Recession. To show our gratitude to the OFWs for the great benefit that they are conferring on our national economy, both the Government and the private sector should fine tune the social policies that will minimize problems arising from separated families, unscrupulous recruiters and employers, bureaucratic obstacles, and lack of political representation. For comments, my email address email@example.com.