Feb 9th 2010, 3:00 by Banyan
I HAVE been in Manila, where it's clear that the most successful export of the Philippines remains its people. The central bank reports that in the first 11 months of 2009 remittances from 9m overseas Filipinos, nearly a tenth of the country's population, rose by 5.1% compared with a year earlier, to $15.8 billion. Remittances are now equivalent to 11% of the economy, with double-digit growth in remittances predicted for this year. Remittances are the force behind powerful consumption growth of more than 5%, easily outstripping the country's annual economic growth of less than 2%. Manila malls are full to bursting, while blocks of flats are going up that are being marketed solely to OFWs, that is, Overseas Filipino Workers.
As the global economic crisis hit, many predicted that remittances would be an early victim as overseas Filipinos lost their jobs in hordes. A mix of factors seems to account for their resilience. One rather negative take, which I heard at the Asian Development Bank, is that plenty of overseas workers have indeed lost their jobs and, returning home, tend to repatriate all their money in one go. On that interpretation, a surge in remittances is bad news, not good. A quarter of the 600,000 Filipinos in the Middle East, for instance, work in the United Arab Emirates, afflicted by Dubai's woes. Factories in Taiwan and hotels and casinos in Macau have also laid off Filipinos.
Yet returning workers are only a small part of the story. Mitzi de Dios, who runs the CLSA stockbrokerage in Manila, argues that one reason why far fewer Filipinos have come home than thought is because a shift in employment patterns means that overseas Filipinos are moving from the construction industry to service sectors, including accounting and finance. Jobs in these sectors are relatively secure. Filipino seamen, who man the world's merchant fleets, have not been laid off even if their ships have been laid up, so valuable is their reputation for dependability. And as for the vast number of Filipino domestic helpers and chauffeurs in Asia and around the world, spoilt employers have simply come to depend on them.
So, remittances will continue to be the chief bright spot for the Philippines, whose domestic economic affairs are coloured by corruption, sloth and poor governance. Still, actively exporting your best and brightest is hardly the best long-term policy.
As the global economic crisis hit, many predicted that remittances would be an early victim as overseas Filipinos lost their jobs in hordes. A mix of factors seems to account for their resilience. One rather negative take, which I heard at the Asian Development Bank, is that plenty of overseas workers have indeed lost their jobs and, returning home, tend to repatriate all their money in one go. On that interpretation, a surge in remittances is bad news, not good. A quarter of the 600,000 Filipinos in the Middle East, for instance, work in the United Arab Emirates, afflicted by Dubai's woes. Factories in Taiwan and hotels and casinos in Macau have also laid off Filipinos.
Yet returning workers are only a small part of the story. Mitzi de Dios, who runs the CLSA stockbrokerage in Manila, argues that one reason why far fewer Filipinos have come home than thought is because a shift in employment patterns means that overseas Filipinos are moving from the construction industry to service sectors, including accounting and finance. Jobs in these sectors are relatively secure. Filipino seamen, who man the world's merchant fleets, have not been laid off even if their ships have been laid up, so valuable is their reputation for dependability. And as for the vast number of Filipino domestic helpers and chauffeurs in Asia and around the world, spoilt employers have simply come to depend on them.
So, remittances will continue to be the chief bright spot for the Philippines, whose domestic economic affairs are coloured by corruption, sloth and poor governance. Still, actively exporting your best and brightest is hardly the best long-term policy.
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