Global financial crisis will hit army of overseas Filipino workers
Oct 13, 2008
MANILA (AFP) — There are few countries in the world where you will not find a Filipino worker. Even in tiny Iceland, one of the countries hardest hit by the financial crisis, there were 1,411 at last count.
At any given time, about 10 percent of the Philippines' 90 million population is hard at work -- outside the country.
For years this vast army of workers has managed to keep the Philippine economy afloat with their remittances but all that could change as the global financial crisis starts to bite.
Last year they sent home 14.4 billion dollars, equivalent to 10 percent of the Southeast Asian nation's gross domestic product. The government had hoped that figure would exceed 15 billion dollars this year.
But if the financial crisis continues to deepen, as many economists believe will happen, the impact on the Philippines could be severe.
"Overseas employment has been the Philippines' escape valve for years," Ben Diokno an economist and former budget secretary told AFP.
"I expect that valve will start to narrow sharply as a result of the global economic recession."
He warned: "Just imagine if a significant number of these workers were to come home," where a third of the labour force is out of a job or underemployed.
The Philippine Department of Labour has already estimated that some 50,000 Filipinos could lose their jobs in the United States alone, mostly in the financial sector.
More than two million Filipinos live and work in the United States and account for some 30 percent of remittances.
"We are entering uncharted territory," economist and former undersecretary for finance Romeo Bernardo told AFP.
"It is a question really of waiting to see which economies are hardest hit and where," he said.
Last year, according to government data, Filipinos could be found working in 202 countries around the world.
Filipinos man a third of the world's merchant shipping, drive trucks in war torn Iraq and work on construction sites in the Gulf and Middle East.
Hospitals in Australia, Canada and the United States employ thousands of Filipino nurses and doctors. More than one million Filipinos live and work in Saudi Arabia alone, from doctors and engineers to labourers.
According to the Philippine Overseas Employment Administration, about 40,000 Filipino nurses work in Britain's National Health Service, half of whom are already permanent residents or British citizens.
In Hong Kong and Singapore they look after the homes and children of local residents while in Macau they can be found dealing cards in the casinos.
The gaming boom there has attracted more than 23,000 Filipinos, forcing the Philippine government to open a consulate in the former Portuguese colony.
Hotels throughout Asia employ Filipinos at all levels from reception to management and even outgoing US President George W. Bush employs a Filipino cook in the White House.
Rene Ofreneo, former dean of the University of the Philippines School of Labor and Industrial Relations said the financial crisis would hit overseas Filipino workers (OFWs) the hardest and may cause remittances to fall.
He told a conference in Manila recently that the "crisis will spare no market where OFWs are usually deployed" and will, in time, impact on remittances.
"A decline in remittances will cause consumption spending to slow. Restaurants will be hit, and consumer goods," he said.
Political commentator Antonio Abaya said Filipino overseas workers cut across all sectors of the labour market from professional to unskilled workers.
According to government data, more than 30 percent of Filipino overseas workers are labourers and unskilled workers.
"If the massive infrastructure and construction projects in the Gulf and Middle East, for example, are cut back, we could start to see many of these workers return home, which would have a significant impact on the economy," he said.
The problem for the Philippines was that remittances go towards consumption, he added. "Very little is saved and even less invested."
According to the Economist Intelligence Unit, private consumption accounts for 70 percent of the economy.
"The government should be prepared to face the real risk that OFW remittances may shrink as the recession in the US, and the rest of the developed world, deepens," Diokno said.
The Philippine government is starting to draw up contingency plans with the possibility of large numbers of Filipino overseas workers losing their jobs, but has yet to announce any details.
Secretary for Labour and Employment, Marianito Roque, has said he believes the impact will be "minimal."
Oct 13, 2008
MANILA (AFP) — There are few countries in the world where you will not find a Filipino worker. Even in tiny Iceland, one of the countries hardest hit by the financial crisis, there were 1,411 at last count.
At any given time, about 10 percent of the Philippines' 90 million population is hard at work -- outside the country.
For years this vast army of workers has managed to keep the Philippine economy afloat with their remittances but all that could change as the global financial crisis starts to bite.
Last year they sent home 14.4 billion dollars, equivalent to 10 percent of the Southeast Asian nation's gross domestic product. The government had hoped that figure would exceed 15 billion dollars this year.
But if the financial crisis continues to deepen, as many economists believe will happen, the impact on the Philippines could be severe.
"Overseas employment has been the Philippines' escape valve for years," Ben Diokno an economist and former budget secretary told AFP.
"I expect that valve will start to narrow sharply as a result of the global economic recession."
He warned: "Just imagine if a significant number of these workers were to come home," where a third of the labour force is out of a job or underemployed.
The Philippine Department of Labour has already estimated that some 50,000 Filipinos could lose their jobs in the United States alone, mostly in the financial sector.
More than two million Filipinos live and work in the United States and account for some 30 percent of remittances.
"We are entering uncharted territory," economist and former undersecretary for finance Romeo Bernardo told AFP.
"It is a question really of waiting to see which economies are hardest hit and where," he said.
Last year, according to government data, Filipinos could be found working in 202 countries around the world.
Filipinos man a third of the world's merchant shipping, drive trucks in war torn Iraq and work on construction sites in the Gulf and Middle East.
Hospitals in Australia, Canada and the United States employ thousands of Filipino nurses and doctors. More than one million Filipinos live and work in Saudi Arabia alone, from doctors and engineers to labourers.
According to the Philippine Overseas Employment Administration, about 40,000 Filipino nurses work in Britain's National Health Service, half of whom are already permanent residents or British citizens.
In Hong Kong and Singapore they look after the homes and children of local residents while in Macau they can be found dealing cards in the casinos.
The gaming boom there has attracted more than 23,000 Filipinos, forcing the Philippine government to open a consulate in the former Portuguese colony.
Hotels throughout Asia employ Filipinos at all levels from reception to management and even outgoing US President George W. Bush employs a Filipino cook in the White House.
Rene Ofreneo, former dean of the University of the Philippines School of Labor and Industrial Relations said the financial crisis would hit overseas Filipino workers (OFWs) the hardest and may cause remittances to fall.
He told a conference in Manila recently that the "crisis will spare no market where OFWs are usually deployed" and will, in time, impact on remittances.
"A decline in remittances will cause consumption spending to slow. Restaurants will be hit, and consumer goods," he said.
Political commentator Antonio Abaya said Filipino overseas workers cut across all sectors of the labour market from professional to unskilled workers.
According to government data, more than 30 percent of Filipino overseas workers are labourers and unskilled workers.
"If the massive infrastructure and construction projects in the Gulf and Middle East, for example, are cut back, we could start to see many of these workers return home, which would have a significant impact on the economy," he said.
The problem for the Philippines was that remittances go towards consumption, he added. "Very little is saved and even less invested."
According to the Economist Intelligence Unit, private consumption accounts for 70 percent of the economy.
"The government should be prepared to face the real risk that OFW remittances may shrink as the recession in the US, and the rest of the developed world, deepens," Diokno said.
The Philippine government is starting to draw up contingency plans with the possibility of large numbers of Filipino overseas workers losing their jobs, but has yet to announce any details.
Secretary for Labour and Employment, Marianito Roque, has said he believes the impact will be "minimal."
1 comment:
It's funny but OFWs are Filipinos who go abroad to find employment.
Question: But why isn't there employment available at home ?
Answer: Change the constitution.
The Philippine Constitution is discriminatory against foreign investments. As an example the ROP still has "protected" industries - but this law only protects the oligarch's hold on the country.
If the oligarchs can not provide employment - the ROP Constitution should change the 60/40 Law.
Without investments - there can be no employment. And if the oligarchy can not provide employment - they should allow foreign investors to do so.
It is absurd to allow 12 million Filipinos to seek jobs abroad while allowing a handful of oligarchs (less than 100) and their cronies in Congress (another 250)to keep the economy crippled.
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