Would the global crisis be putting the brakes on remittance boom?

NOT too long ago, those who left the country to work as nurses, doctors, engineers, teachers, managers and entertainers abroad were deemed unpatriotic.

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But when the Philippines discovered how much the economy could benefit from the billions of dollars these overseas Filipino workers (OFW) remitted to their families back home, the love flowed and the OFWs are now called “Bagong Bayani” or “Modern Heroes.”

Last year alone, OFW remittances hit $16.4 billion (almost P800 billion), representing 10 percent of the country’s Gross Domestic Product.

“Roughly, this means remittances funded one out of every P10 spent on the goods and services produced in our economy,” wrote former socio-economic planning secretary Cielito Habito in a newspaper column.

Dependent

A quarter of the country’s families are highly dependent on OFW remittances, the Philippines admitted in a report to the United Nations.

Put differently, without remittances, there would be 4.3 million more poor Filipinos today, said Asian Development Bank economist Kelly Bird in another report.

This is why it is in the country’s interest to keep the OFWs employed.

Few displaced

Seeking to allay fears of a massive OFW displacement as the recession in the United States enters its 17th month, Philippine Overseas Employment Administration (POEA) Regional Center for Visayas Director Evelia Durato said that from late last year to Feb. 13, only 5,332 OFWs had been laid off from 141 companies worldwide.

And in the first quarter of this year, only 186 displaced OFWs had gone to the POEA’s Cebu office for help, mostly to get a refund on their placement fee, since they had been unable to finish their employment contract through no fault of their own.

But she said some OFWs had already returned to Taiwan, where more than 90 percent of the displacements had occurred.

“It seems that the displacements have stopped,” Durato said.

If anything, workers are needed for the approved job orders still waiting to be filled.

Of the 754,788 job orders approved by the POEA nationwide from Oct. 1, 2008 to Feb. 15, 2009, unfilled as of Feb. 16 were 477,481 posts.

Durato said that in the past five years, despite the crisis, the number of contracts the POEA processed in its Visayas offices had grown yearly.

Last year, it processed 49,330 contracts in the Visayas, up 15 percent from a year ago.

But the number of workers deployed, meaning those who actually left the Philippines to start their work at the jobsites, grew by only eight percent to 28,987 during the same period.

Lucrative

Going overseas is a lucrative deal for OFWs.

Durato said a ship stewardess could earn as much as $3,100 (P145,000) a month. A ship electrician could get $6,000 (P280,000) a month.

Other workers get less, though.

Domestic helpers should get a minimum monthly salary of $400 (P18,800). But some laborers earn just a little over $200 (P9,400).

“But sometimes, they also have overtime pay or get free food,” she said.

At times, the employer also pays for their plane fare.

“It depends on the (employment) contract,” Durato said. “But if the salary is already very low, POEA will ask for an offsetting mechanism.”

Brain drain

In 2008, the World Bank ranked the Philippines as the fourth-largest remittance-receiving country, after India, China and Mexico, making the financial benefits to the Philippines clear.

But what about the costs of the export of labor, as seen from the loss of economic potential with the exodus of highly skilled workers?

It has been hard for analysts to measure the exact economic toll, but a study released last year by the Organization for Economic Cooperation and Development (OECD) showed what proportion of Filipinos aged 15 and above living in the OECD area are college graduates: 46.7 percent.

These tertiary-educated migrants made up 7.4 percent of the Philippines’ tertiary-educated population, representing the country’s brain drain rate, according to “A Profile of Immigrant Populations in the 21st Century.”

The OECD comprises 30 of the richest countries in the world, including the United States, United Kingdom, France, Germany, Japan, Italy, Spain, Canada, Australia, Denmark and Finland.

Hit by crisis

And this exodus could continue. That’s if external market conditions don’t mess up the Philippine government’s rosy projections for overseas job prospects.

As the global crisis hit, Hazel Mae Gitgano, branch manager of the Magsaysay Maritime Corp.-Cebu office, said, seamen are now being made to take longer vacations from work.

“Normally, the vacation is about two months. That’s their rotation period,” said the manning agency official. “But starting this year, it is four months already.”

Fewer requests

She also said there had been a reduction in employers’ requests for new seafarers.

“Some vessels have stopped sailing, like container vessels and car ships,” but not to the point that they have asked the seamen to go home, she said.

She emphasized that the demand for ship officers continued to be robust, though, because there are few of them.

There are many lower-ranked seamen, she said, but they do not take the Professional Regulation Commission board exams required to move up the ranks, citing the lack of money for the test and the three- to seven-day training required afterward.

Going home

On the land-based front, Department of Trade and Industry-National Economic Research and Business Assistance Center 7 manager Minerva Yap told Sun.Star Cebu of nurses working in Canada who had to return home because their hospitals were cutting down on personnel.

She said they are now looking for jobs in Cebu hospitals.

In New York, where many Filipino nurses work on an on-call basis, Yap said nurses talk of some hospitals they call for short-term jobs no longer calling them back.

And that’s not yet even considering the effects of the declaration last week of the Influenza A (H1N1) virus as a pandemic on the global economy.

Last March, OFW remittances grew by an anemic 3.04 percent.

The era of double-digit growths ended last December, despite government’s efforts to nurse them back to health.