(MENAFN- Asia Times) Overseas Filipino workers, it's often said, are the secret weapon of Southeast Asia's third-biggest economy By William Pesek June 26, 2017 9:35 AM (UTC+8) Share Tweet Linkedin Print Email Share 0 Comment 0
When you arrive at most airports around the globe, the VIP line is for celebrities, politicians and tycoons. In the Philippines, the VIPs are OFWs.
That stands for Overseas Filipino Workers, often referred to as the secret weapon of Southeast Asia's third-biggest economy.
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In my interviews over the years with leaders from Fidel Ramos (1992 to 1998) up until Benigno Aquino (2010- to 2016), the more than 10 million Filipinos working abroad and sending cash home were framed as vital economic stabilizers.
The roughly $30 billion they remitted last year stabilized the peso, smoothed out Manila's balance of payments and supported consumption to keep many a provincial economy alive.
Far from being a secret weapon, Manila's addiction to remittances is a growing vulnerability.
Far from being a secret weapon, Manila's addiction to remittances is a growing vulnerability.
While useful in the short run, these hard-money inflows reduce pressure to create jobs at home. The windfall deadens the urgency to deregulate labor markets, tweak tax policies and improve education and training.
As a result, when Manila's diplomats go abroad, one of their top priorities is getting allies to increase the number of visas — and the speed of processing — so the Philippines can export more of its best and brightest.
People should never be a nation's main product. It creates a brain drain that depletes the local labor pool, reducing productivity and innovation in the long run.
To his credit, former President Aquino took some steps to slow the flow of labor leaking overseas, including population-control efforts despite pushback from the powerful Catholic Church.
Unfortunately, though, his rhetoric about a domestic employment renaissance proved more talk than action.
Enter populist rabble-rouser Rodrigo Duterte, champion of the little guy. Surely, he's rolling up his sleeves to bring more of his diaspora home.
Nope, in fact he may be making Manila's people-export addiction even worse.
It's troubling, for example, that Duterte is setting up a Department of Overseas Filipino Workers Affairs and creating a bank for the diaspora.
It's troubling, for example, that Duterte is setting up a Department of OFW Affairs and creating a bank for the diaspora.
On the surface, these seem pragmatic steps to offer direct outreach to overseas workers in an increasingly chaotic global scene -– Brexit, the Syrian conflict, terrorism and human-trafficking risks.
But they institutionalize a feature of the economy Manila should be phasing out. Regulatory capture risks abound here.
It doesn't take a vivid imagination to see this new department and bank, as they try to increase power and resources, growing their OFW ranks around the globe to the detriment of the economy.
It's not just low-wage earners leaving. A recent Asian Development Bank study found a 66% jump in people with university degrees fleeing to richer nations in the decade through 2011.
More than half of those workers moving to Organization for Economic Cooperation and Development economies came from the Philippines. Many more settle in non-OECD regions like the Middle East.
In travels during that time in the Middle East, Asia, Europe, Africa and the U.S., I've met countless OFWs.
Only a very tiny percentage say they'd be working away from their families — and often their children — in Dubai, Riyadh, Singapore or on a cruise ship ferrying Americans to the Caribbean if good work were available at home.
If Duterte wants to make good on his reputation as a populist, his administration should act fast to create millions of new jobs in manufacturing, tourism, mining and build on the success of the business-process outsourcing industry.
Making good on the infrastructure boom he promised would both generate employment opportunities and increase the nation's competitiveness and attractiveness as an investment destination.
The Philippines could have a much brighter future if its main export were electronics, cars and home-grown inventions –- not workers.
(William Pesek is a Tokyo-based journalist, former columnist for Barron's and Bloomberg and author of 'Japanization: What the World Can Learn from Japan's Lost Decades.' Twitter: @williampesek)
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