It’s more fun abroad

By TONY LOPEZ

The following are excerpts from my lecture yesterday before Philippine ambassadors assigned in Europe:

The officially stated goals of American foreign policy as mentioned in the Foreign Policy Agenda of the http://en.wikipedia.org/wiki/United_States_Department_of_State”US Department of State, are: “to create a more secure, democratic, and prosperous world for the benefit of the American people and the international community.”

The Philippines’ the foreign policy goals are three: enhance economic diplomacy, promote national security, and protect Filipino expats.

Whereas the US foreign policy is a more secure, democratic and prosperous world, our foreign policy is for a more prosperous, more secure, and more democratic Philippines.

More prosperous—that is economic diplomacy; more secure that is national security, and more democratic that is not just in political terms which is elections and free choice, but in terms of having inclusive growth, one that reaches out to the vast majority of our people.

Economic diplomacy is basically three things—trade, tourism, and investments, including grants, aid and ODA.

Our trade with the world has been sluggish. Exports were down 6.9 percent in 2011. Imports were up a paltry 1.8 percent

In the region, our tourist arrivals lag behind countries much smaller than us. In Southeast Asia which had 77 million arrivals and $82 billion of tourism receipts in 2011, the Philippine share was 1.6 percent in arrivals (No. 7), and 1.1 percent, in receipts (No. 6), among the ten major ASEAN members. Our tourism growth rate, 11 percent, is the slowest in ASEAN, except Malaysia (0.6 percent). The highest growth was Myanmar, 26 percent, followed by Singapore and Thailand, both 19 percent.

National security is asserting our territorial claims, bilaterally and multilaterally, such as the United Nations and its agencies, and groupings of countries like the Asean and APEC. It also includes modernizing our armed forces so that our bark has some appearance of bite.

Protection of OFWs should probably fall under a more democratic Philippines. 

Our OFWs should be the No. 1 focus and priority of our diplomacy. 

Protecting them and looking after their welfare is the best form of economic diplomacy. You can forget about trade, about investments, about loans, about tourism. Just remember our OFWs.

Our OFWs are basically economic orphans. They cannot find economic opportunities in the Philippines in terms of jobs, career advancement, and long-term livelihood. Therefore, they cannot participate in our democratic processes and cannot benefit from the country’s internal growth.

In the last eleven years, per capita Filipino income, at current prices, has almost tripled, growing by 2.76 times, from $1,146 in 2001 to $3,157 by 2011. In percentage terms, that’s an average yearly growth of 16 percent. If you extrapolate this growth rate over the next five years, by 2017, per capita income will reach $5,682.

In other words, we are today, already a middle class country. We are not poor. The present per capita income of $3,157 is equivalent to an income of $8.65 a day. The World Bank considers you poor if you make $2 or less a day.

OFWs number about ten million. They remit about $20 billion a year, up by 7.2 percent from $18 billion in 2010. 

At P42 to one dollar, the $20 billion is equivalent to P840 billion. In 2010, that was equivalent to half of the national government budget. The P840 billion can finance 19 annual conditional cash transfer (CCT) programs for the poor. It is also eight times the administration’s DPWH budget.

Remember the time in 2011 when the PNoy administration refused to spend P140 billion in budgetary allocation? Our GDP growth rate went down by half, to 3.9 percent, from 7.6 percent in 2010.

Can you imagine the impact of removing P840 billion from the economy?

The remittances grow by five to ten percent per year. According to Bansan Choa, the $20 million annual OFW remittance is an understated figure. He says the $20 billion represents only a third of actual earnings of our Filipino expats. In other words, our expats make $60 billion a year.

The $20 billion remittance figure is four times the $5 billion net foreign investments that came in in 2011. The $60 billion is twelve times the $5 billion estimated foreign investments.

In 2011, according to I-Remit President Haris Jacildo, in spite of the crisis, the deployment of Filipino workers continued with 1.3 million sent abroad, still surpassing the government’s annual target of one million workers.

According to Jacildo, “Remittances to the Philippines still posted considerable growth as OFW jobs remained relatively unaffected by global events because of the deployment of higher- skilled workers in less cyclical industries and due to the fact that, with the appreciation of the peso, workers abroad had to send more to meet the fixed cost obligations of their families back home.”

The Philippines is the world’s 12th largest country in terms of population, behind Mexico which has 112 million people and ahead of Vietnam which has 88 million.

Being No. 12 in population, the Philippines is also the 12th largest consumer market in the world. Multiply 100 million by $3,157 and you get a $315 billion market.

That market grows by two percent a year in number and by 16 percent a year in value.

Compare that with Singapore which has 5.18 million and not growing in number. In 50 years or less, Singapore will disappear from the face of the earth.

In 50 years or less, the Philippines will be one of the ten richest countries on earth—if we get our act together.