The Philippine Online Chronicles

A recent study by the Asian Development Bank bared that 12 percent of the Philippines' gross domestic product in 2008 came from foreign remittances from overseas Filipino workers (OFWs), making foreign remittances the “single most important source of foreign exchange to the economy and a significant source of income for recipient families.”

The study done by Asia's biggest financial institution also said that “ten percent of the Philippine population lives outside the country” as migrant workers.

This has led to an influx of remittances that have helped support domestic production and consumption, and have pushed foreign exchange reserves to an all-time high of US$38 billion at the end of 2008, the study noted.

However, the study showed that the current economic recession “has brought a new challenge to the role of remittances,” as most OFW-dependent households spend these remittances on basic necessities like food and household needs (93 percent), education (72 percent), and medical expenses (63 percent).

It added that most dependents of OFWs encounter four major problems - the absence of family members, inefficient savings of remittances, currency fluctuations sparked by the fiscal crisis, and job displacements due to lowering foreign economies and the trend of contractualization among migrant workers.

Not a miracle cure

Lualhati Roque, executive director of the International Migrant Resource Center said that though foreign remittances keep the “government and economy afloat,” it will “not cure the ills of our economy.”

She cited the “brain drain phenomenon” and the “obscene lack of decent jobs at home” as the main problems in lieu of the “propping” of foreign remittances.

“The Philippines is not creating enough jobs for its swelling population, driving one in 10 people to seek employment abroad... The best and brightest minds, and the sturdiest work hands of our country are forced by the current government and current societal set-up to leave and suffer abroad,” Roque explained in a 2005 study published in Bulatlat.com.

She also revealed that OFW-dependents spend the remittances “for survival,” which “generally fuels consumer spending and shores up the country dollar reserves.”

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