The impact of remittances by Filipinos living or working abroad, even if such inflows have been threatened or challenged in recent months, still cannot be discounted in helping chart the country’s sustained growth in the next five to 10 years.
Money monitored coming into the country through official channels last year was still significantly substantial, and its impact on boosting the Philippines’ economic resiliency in past decades — and still in the near future — will be crucial in keeping the country’s growing population afloat come hell or high water.
Last year, projections on remittances of overseas Filipino workers (OFWs) reached just about $30 billion, another new high. Even annual growth levels, which many feared would be affected by a dip that happened in the middle of last year, continued to be stronger than the previous year.
A needed buffer
Thus, despite all the uncertainties that are seen to dominate 2016, the country can look forward to the monies OFWs, plus Filipinos living abroad, would send to their families here. This would certainly act as a buffer to most local disruption, economic or political.
While India and China are the first and second ranked in the world, respectively, in terms of remittances, the Philippines with a far lower number of migrant workers is no pushover.
And certainly, with a smaller economy and the amount accumulated year in, year out for more than half a century, it’s not surprising the standard of living of most Filipinos has improved by small increments, much like watching an OFW’s dwelling metamorphosing from thatch-and-wood to galvanized steel-and-mortar.
Preparing ahead
Of course, we’re not saying the OFWs’ contribution to the economy is going to be forever. This is why there is a need for our government to look forward and prepare for that possible rainy day, plus to push harder towards maximizing the contribution to the economy of our countrymen working abroad.
There may be hints that remittances are peaking; or maybe this is a fluke that don’t deserve much attention. Still, it would be prudent to look at other pillars upon which to build the future growth of the country, even if it is just to supplement the income sources from remittances.
The Philippines is still one of the fastest growing populations in the world, and one of the major challenges of government is finding work for those who will enter the job market every year.
While the US economy is getting back on its feet, which means there may be more jobs available for Filipinos there in the coming years, this not the same situation for other sectors/countries where there are still a sizeable number of Filipino overseas workers and which have been a good source of jobs for aspiring OFWs.
Fewer seafarers
The number of Filipinos in the seafaring business, for example, has had a noticeable drop in recent years. This is largely a function of our government’s inability to provide training and acceptable accreditation ladders for entry-level and career personnel in this sector.
We’re seeing seafaring positions being given to other nationalities because our graduates have not been well prepared technically. For higher positions, our people are likewise being bypassed because they didn’t get the proper certification.
This is such a waste of opportunity because Filipinos were once a dominant source of manpower in the shipping industry. Many families today that have found improved standards of living look back to the years when their fathers were away at sea and religiously sending home money for their education.
Middle East paralysis
The era of low oil prices, on the other hand, is sure to affect also the job opportunities in the Middle East, another continent that has been a traditionally healthy source of jobs for Filipinos.
We’ve seen Dubai cutting back on its ambitious projects, not only because oil revenues to fund these have been more than halved, but also because of the restraints that come with the continuing uncertainty of the world economy.
Then there’s the unrest that comes with the territory. The severity of wars in the affected countries has persuaded many of our OFWs to entirely give up on their jobs there.
Outsourcing
Thankfully, the business process outsourcing sector (BPO) in the country continues with its bullish run. It has not only siphoned the job market of a significant number of new graduates and unemployed, but has contributed a hefty amount of revenues to the economy.
In fact, there are studies that say the BPO industry may overtake dollar remittances from overseas Filipinos in terms of revenues in a few years time. In 2014, BPO companies in the Philippines contributed $18.9 billion; last year, the revenues were estimated to be at about $22 billion.
With a global value of $300-to $350-billion, there is really scope to expand our stake in this market. Filipinos with the educational background and temperament are still considered to be top-notch service providers in this industry.
While telecommunications infrastructure cost is still higher than in other countries, BPO firms are still coming out ahead in terms of profitability. Coupled with the continuing government support for the industry, BPO centers are sprouting up not only in Metro Manila, but also in a growing number of cities in the country from up north Baguio to down south Davao.
Adding value
As a closing point, I would like to reiterate the need for our government to come up with better programs to maximize the contribution of OFW remittances in the economy.
The need to ensure that precious OFW dollars are not just used to purchase consumables, but to be utilized as capital that can further generate more income — and consequently earn additional value — cannot be ignored. Now please, before it’s too late.
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