The Philippines is deploying far too many OFWs for meager increases in remittances

OFWs and the law of diminishing returns
Edwin de Leon - February 28, 2020 https://opinion.inquirer.net/127668/ofws-and-the-law-of-diminishing-returns

I have a recurring weariness that a point has been reached whereby the collective gains from all the OFW deployments have been adverse to the overall national interest.

While remittances have steadily increased, the rate is slower in recent years. As a percentage of GDP, it has remained flat at 10 percent (though highest among Asean countries). OFW deployment has ballooned from about 1.5 million in 2010 to an estimated 2.3 million in 2019. The total number of OFWs around the world is now over 12 million. The huge increase in OFW deployment is disproportionately higher than the remittances.

In other words, we are deploying far too many people for meager increases in remittances. There are many reasons for this. The highest number of senders are the lowest earners—workers in elementary occupations (i.e., nonskilled) at 37.6 percent, with those in service/sales at 18 percent, professionals at 8.7 percent, and managerial at 1.1 percent. Higher inflation in recent years has also been a reason; the dollar figure may seem higher, but the purchasing power has remained the same.

We know what happens to all these remittances: more cars, more condos, more malls. Investments? more tricycles, more sari-sari stores, more food stalls. We can argue whether more of these is a good thing. Poverty rates were down in 2018, but have crept up again near 20 percent.

What, then, is the downside to all these? The social cost is well-documented: the splintering of families, the maltreatment and abuses experienced by workers, higher criminality and addiction resulting from child neglect—these are the ones that make the news. But there is an insidious long-term repercussion to losing so much talent to other countries. Many of these losses are permanent, especially when developed countries open their immigration doors to temporary workers. When Canada allowed domestic workers permanent residence status after only two years of service, the demand overwhelmed the system. The government had to replace the program with much longer service requirements and tougher qualifications ( i.e., post-secondary education and language proficiency).

Cynics are quick to say that elementary and service workers are better off leaving since there are few opportunities for them to make any headway here. However, many service workers abroad are professionals here. Many are college-trained, English-proficient and ambitious, only preferring to get their foot in the door quickly as domestics. Once they get their permanent residence status, many retrain to become full-fledged professionals.

The lack of opportunities and low salaries in the Philippines have continued to drain us of our workers. This exodus is reflected nowadays in the difficulty to find caregivers and household help on the home front. But the pay is not the only issue. Even the fairly comfortable are joining the bandwagon. Our cultural obsession with the future and security of our children vis-à-vis our distrust of our socio-political institutions are seen as push factors driving our citizens away. Unabated immigration and continuous OFW deployment are chipping away at our best and brightest. We educate them to better the economies of other countries, except ours.

Some of these people could very well have given us more choices in terms of our political leadership and entrepreneurial expertise. The current US Democratic nomination process is being contested by 30 highly qualified individuals. Our current president came from a choice of two nominees in the PDP; this lack of choices is seen in both local and national levels. A Filipino housewife, meanwhile, sold her online care services (Care.com) for $500 million. She migrated as a child with her parents to the United States in the ‘70s. How many stories like this have we heard through the years?

More than ever in our history, we need challengers to the status quo. But they may have already left, never to return again.

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Edwin de Leon, M.Ed. ([email protected]), is a retired science teacher and high school principal.