Pandering to the Overseas Filipinos

Doc Bernie wrote:

OFWs Deliver Again

By Dr. Bernardo Villegas
INQUIRER.net First Posted 08:38:00 12/15/2009 Filed Under: Economy and Business and Finance, Overseas Employment

MANILA, Philippines — The Philippines is one of the three East Asian countries (excepting China) that avoided a recession in 2009. The other two are Indonesia and Vietnam.
Registering a positive growth in GDP of at least 1.5 percent (it could been higher had it not been for the devastation caused by super typhoons), the Philippine economy has grown mostly due to private consumption expenditures and government pump priming. Exports dropped precipitously and investments were anemic.
The consumption-led growth, in turn, can be attributed to the more than P800 billion received by the relatives of the overseas Filipino workers whose remittances increased by more than 4 percent for the whole year against all odds. The Philippines would have surely gone into a recession if the OFW remittances had dropped by 6 percent or more, as forecasted by the World Bank and IMF at the beginning of this year.
Thanks to the superior quality of OFWs (the first to be hired and the last to be fired), remittances kept on increasing throughout the year. The only fly in the ointment is the strengthening of the peso at the end of the year, due mostly to the depreciation of the dollar. Many OFWs were expecting an exchange rate closer to P50 to $1 at the end of the year. They would be lucky to get P47.
Be that as it may, the purchasing power of the relatives of the OFWs is a formidable P800 billion or more. Since the government is already reaching its limit of deficit spending of 4 percent of GDP, the Philippine economy will have to be propelled by consumption spending for at least the first half of 2010 for the GDP growth target of 3 to 4 percent for the whole of next year to be attained.
That is why I reiterate my suggestion that OFWs and their relatives take an upbeat mood beyond the traditional Christmas period. I got a lot of feedback about my suggestion that at least for this year, Christmas be extended to at least to the middle of January to coincide with the Sto. Nino celebrations in cities like Cebu.
Let me respond to some of the criticisms to my suggestion. I was not in the least suggesting the adoption of a consumerist outlook. Consumerism is evil. It is a lifestyle that equates human happiness with an unlimited accumulation of goods, of making “having” as the end all and be all of human existence.
In fact, what I suggested was for the OFWs to help their relatives who suffered from the ravages of Ondoy and Pepeng to rebuild their houses, replace their damaged clothes, furniture, and appliances, and in general restore their standards of living to where they were before the tragedies struck. These expenditures are the farthest from a consumerist lifestyle. They are for basic necessities and do not imply an insatiable desire for material goods.
It is not true that all OFWs are limited to only two or three weeks of vacation. For one, there are the 380,000 seafarers who normally get anywhere for one month to three months of home leave. I am very familiar with this category of OFWs because I do a lot of research on Filipino seamen who will be our perpetual OFWs.
Even if we are able to eradicate poverty completely in the Philippines, there will always be hundreds of thousands of Filipinos in international shipping lines because they are highly appreciated by their respective employers and many Filipino males have a natural inclination to working in this industry. Even during the current crisis, when numerous ships were mothballed in places like Singapore and Hong Kong, the demand for Filipino seafarers continued unabated. These OFWs can be among those helping to boost consumption spending on basic necessities, including some amount of domestic tourism.
In addition to seafarers, those who can afford to stay more than two weeks for home leave are numerous OFWs who are service-oriented workers, such as caregivers and nurses in developed countries in Europe and North America. From my experiences in Spain, where I spent two years teaching in a business school in Barcelona, Filipino immigrant workers are so especially appreciated that they can normally ask for a month or more of vacation. Their talents, skills, and personal traits stand out in comparison with other foreign workers from Asia, Africa, and Eastern Europe.
It is true, as some of the bloggers commented, that those who are home for the Christmas vacation should spend as much time staying with the family. Bonding with the children is especially necessary. But I would like to remind the married OFWs that one of the important suggestions of marriage counselors is for husband and wife to regularly spend time alone with one another, i.e. taking frequent second honeymoons. I would like to suggest to vacationing OFWs to consider spending time alone with their respective husband or wife to get to know places like Panglao, Dumaguete, Camiguin, Coron, Sorsogon, and numerous places to which they have not yet traveled. There are very cheap fares that the local airlines are offering.
The Philippine Nautical Highway is a much improved infrastructure connecting the major islands. A couple can drive from Manila to Batangas, then to Calapan, then to Panay and finally to Zamboanga using the ROROs and enjoying the good weather of January and February. Again, this has nothing to do with a consumerist lifestyle. I consider it as a basic need of married couples who need to spend time with one another, away from their daily worries and concerns.
Some of the bloggers misunderstood my reference to pasalubongs. I was not suggesting that you bring a lot of goodies from abroad to give to your relatives. In fact, you can buy practically anything you want to give to your relatives in local stores. And I do agree with some of the comments that your love for your family is not measured by the amount of goods you bring back home.
When I was talking about pasalubongs, I was referring to what you would bring back as gifts to your employers and other friends you have in the foreign places in which you work. There are already very well processed and packaged Filipino delicacies (such as those produced in Cebu, Bulacan, Pampanga, Ilocos Norte, Iloilo, the Bicol region) that can compete with Godiva, Nestle, or Cadbury chocolates. They can pass even the most stringent customs regulations of countries like Australia.
I would like our millions of OFWs to be the first promoters of our local food processing industry which is already reaching world-class level, thanks among others to the efforts of the Department of Science and Technology to modernize the processing and packaging of our traditional delicacies like the chicharon, pastillas de leche, pili nuts, dried mangoes, etc. The Philippine food manufacturing industry will go from strength to strength and will not go the way of other manufacturing sectors that have collapsed because of the Chinese competition. An example of a world-class Filipino brand is Oishi that has a very strong presence in China and some Southeast Asian countries.
The first quarter of 2010 will see faster growth in GDP also because of the expected election-related spending. Together with the continuing strong remittances from abroad, these expenditures will boost private consumption spending which will remain to be the main engine of growth for at least the first half of 2010. If we are able to elect a very credible set of leaders in May 2010, the second semester of 2010 can also be boosted by strong inflows of foreign direct investments, especially in such sectors as mining, infrastructure and energy, tourism and business process outsourcing.

For comments, my email address is bvillegas@uap.edu.ph.

The economic suggestions provided can indeed generate revenues.

However Doc Bernie misses the point, he could have better mentioned political stability instead of “electing a very credible set of leaders”. Political stability is the immediate dividend of a credible electoral process – not because “people elected credible leaders”. The leaders are credible, because the electoral process is credible – NOT the other way around.

The “experts” know one component of the answer means opening up the economy. But, the “experts” often raise the Tydings Rehabilitation act as the bogeyman and raise xenophobic hysteria.

In 1945, the transition government of the Philippines ended . That same year, the World War II had its closure, leaving immeasurable destructions and damages in the country. To rehabilitate the Filipinos who suffered from the war, then U. S. Senator, Millard E. Tydings sponsored the Philippine Rehabilitation Act (later named after him) which appropriated $620 million to be paid to the Filipinos. However, in exchange of the U.S. economic aid, the United States laid down one condition, that is, the Philippines had to grant the Americans with parity rights, or equal right to utilize and exploit the country’s resources, and put into function important public utilities in the Philippines. The Filipinos, to enjoy such aids, amended the constitution, granting parity rights to the American citizens. It was ratified on 11 March 1947.

The parity rights clause was removed in the 1987 Cory Constitution outright.

Instead of leveling the playing field by providing equal treatment to all aliens of different nationalities and not just Americans, the Philippines missed out on FDI and has to be content with the crumbs thrown by the local economic elite.

No wonder, after 1987 that the oligarchs expanded their operations, with at least 3 Filipinos making it to the Global Fortune 500 – while the Gini coefficient was getting wider, and more Filipinos opt to live and work overseas.

A fairer regime would have passed measures that:

a) identified types of property that can be owned in full (residential, educational, health, religious)

b) identified limitations on size of landholdings (can’t buy all units in an apartment complex, etc) – balances the finiteness of available land with the demand for residential housing,

c) provided an institution that serves as a one-stop clearinghouse for all applications involving foreign ownership of real estate (though this rings corruption alarm bells, I can hear the pavlovian bell ringing loudly as political appointees jostle as to who gets this plum appointment – at least there is still a return instead of none)

d) allowed for reciprocity (aliens whose home countries allow filipinos to own land, can also own land in the Philippines, subject to a,b, and c)

These could have kept the jobs home. But, people are still buying Noynoy’s anti-corruption crap. It ain’t corruption – it’s the economy, DUH!

SNAP! Only the oligarchs are making money!

The oligarch media machinery makes people oblivious of defective oligopolistic economic policies and divert the attention to petty corruption and some whiffs of a big fish – but without bagging one.

In effect Doc Bernie states,

  • Keep the economy closed – let the oligarchs be the sole benefactors of a skewed economy.
  • it’s not enough to suck the OFWs blood, let’s drain their bones, too! WTF!
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