Despite the surge of remittances in past 7 months

Migration contributes to inequality in RP--study

by JEREMAIAH M. OPINIANO
OFW Journalism Consortium

FIGURES from the Bangko Sentral ng Pilipinas show that remittances from January to July this year have increased by US$847.55 million over the same period last year.

For the said period, BSP figures revealed that US$4.263 billion in foreign remittances came to the formal banking system as compared to US$3.416 billion last year. On this basis, the BSP is forecasting that an all-time high of eight billion dollars in remittances will be achieved by the year's end, as reported last October 26 in the Philippine Daily Inquirer.

However, while remittances have largely helped keep the Philippine economy afloat, a recent paper by a migration research expert from De La Salle University raises some alarming findings related to migration, poverty and inequality.

Migration's benefits don't go down to the poor?

In a faculty experts' media forum organized by DLSU's Marketing Communication Office (MCO) last November 7 in Makati City, Behavioral Science professor Stella Go said the economic benefits of international labor migration "have not trickled down to the poor and less developed regions in the country."

Go's preliminary analysis was contained in a paper titled "Migration, Poverty, and Inequality: The Case of the Philippines," which she presented at a conference organized by the Asia-Pacific Migration Research Network (APMRN) last September 24 to 26 on the Pacific island of Fiji.

She based her findings from the Family Income and Expenditures Surveys (FIES), the Surveys on Overseas Filipinos (SOF), conducted annually by the National Statistics Office (NSO), the official government statistics on remittances and migrant outflows from the Bangko Sentral and the migration-related agencies, and poverty statistics from the National Statistical Coordinating Board (NSCB).

Go, who is also president of the Philippine Migration Research Network (PMRN), said that the poorer segment of Philippine society "have been largely excluded from the opportunities provided by migration."

She based this on her finding that OFWs come from regions with the lowest poverty incidence, and these regions have the most number of migrant outflows such as the National Capital Region, Central Luzon, and Southern Tagalog.

In sharp contrast, Go added, the regions in Mindanao, which have high levels of poverty incidence, have the lowest proportion of OFWs. These include the conflict-ridden Autonomous Region of Muslim Mindanao (the poorest region where the smallest proportion of migrant workers come from), Central Mindanao (region 12), Southern Mindanao (region 11), Northern Mindanao (region 10), and Western Mindanao (region 9).

Poverty incidence versus number of OFWs per region

The National Capital Region, according to the 1997 FIES, has 6.4 percent of its residents at or below the poverty threshold, and contributes 19.1 percent of the country's total OFWs.

The provinces of Luzon, whose six regions-excluding the NCR--have a 30.1 percent poverty incidence rate, contribute 53.2 percent of the country's total overseas workers. Migrant workers from Mindanao, the country's poorest geographical area with a 44.6 percent poverty incidence rate, however, only account for 12.3 percent of the country's total OFWs. Visayas, with a 38.2 percent poverty incidence rate, accounts for 15.4 percent of the total number of OFWs.

Southern Tagalog, with a 25.7 percent poverty incidence rate, ranks second nationwide in terms of OFWs' regional origins with 18.9 percent. OFWs from Ilocos, which has a 37.8 percent poverty incidence despite having a long history of labor migration to the US, comprise 12.6 percent of the national total.

OFWs from Central Luzon, with a 15.4 percent poverty incidence, account for 12 percent of the national total. ARMM, though it has the highest poverty incidence rate of 57.3 percent in the 1997 FIES, only accounts for 1.9 percent the country's total OFWs.

From the 1997 FIES, the Philippines has a 31.8 percent national poverty incidence, although 2001 figures from the NSCB show that the figure rose to 40 percent. Go did not include the 2001 poverty incidence figures in her paper.

Go notes in her paper that studies on migration and poverty and inequality are insufficient, with their common assumption "that poverty must have pushed the migrants out of their place or origin to search for better economic opportunities elsewhere."

Impacts on OFW, family, community vary accordingly

On how migration affects the OFW, his or her family, and community or region of origin, Go said the economic returns to labor migration vary across skills and country destinations "because foreign wages and placement costs also vary accordingly."

"On the whole, wages increase with skill level, with professionals receiving higher wages than domestic helpers; however, wages vary significantly within each skill category according to the country of destination."

"For instance, domestic helpers in Europe receive higher wages than those in the Middle East, while Hong Kong pays higher than Singapore and Malaysia. Computer programmers are paid five times more in the US than in Saudi Arabia while accountants in Singapore are paid three times more than those in American Samoa," Go wrote.

In her paper, Go, citing 1998 figures from the Philippine Overseas Employment Administration (POEA), showed that accountants in Singapore earn $1,650 as compared to $551 for OFW accountants in American Samoa. Nurses in the United Kingdom, now a prominent work destination, earn $1,984 as compared to the $406 for nurses working in Saudi Arabia.

For domestic workers, those in France earn $900, $600 in the UK, $476 in Hong Kong, $202 in Malaysia, and $200 in Saudi Arabia, a country where a recent labor arrangement between the country's Department of Labor and Employment (DOLE) and the Kingdom's Ministry of Labor and Social Affairs was made--affecting unskilled workers, with domestic workers included.

BSP deputy governor Amando Tetangco, quoting an Inquirer report, said the prospects of the rise of remittances are bright "with the expanded hiring of the United Kingdom in the medical field." Recent reports showed that local doctors or dentists undergo nursing training to qualify them for work in the UK as nurses.

On an annual basis, accountants who work abroad can earn P281,843 a year, compared to local accountants who earn P145,584. For domestic workers, OFWs earn P98,719 annually as compared to the P24,000 of the local domestic workers for an annual wage differential of P74,719.

Urban families benefit more from migration than rural families

A significant proportion of Filipino families has relied on remittances or "income from abroad" as the main source of income, Go noted. Citing the 1997 FIES, Go said that a total of 881,263 Filipino families, or 6.2 percent of the total number of families, derived their main source of income from remittances.

But the bigger part of that number who benefits from remittances comes from urban families. In the 1988, 1991, 1994 and 1997 FIES, urban families who cite income from abroad as their main source of income outnumber the rural families.

These include NCR and Central Luzon, Go said, with the exception of Ilocos, which has a long history of international labor migration to the US. Despite the region's high poverty incidence, which is pegged at 37.8 per cent, Go said FIES figures show that Ilocos "has reported the highest proportion of families relying on remittances as its main source of income." The region accounts for 12.6 percent of the country's total number of OFWs.

"The percentages of families at the lower end of the income groups receiving income from abroad tend to be higher in the urban areas than in the rural areas," Go said.

She added that families from the higher income groups "also receive larger proportions of income from abroad than the lower income groups." In marked contrast, Go added, the lower income groups derive the largest part of their income from domestic resources."

'The most disquieting aspect of international labor migration'

For this set of data, Go concluded that the "poorer segment of Philippine society has been largely excluded from the opportunities provided by migration."

"International migration," Go added, "appears to have contributed instead to the long existing problem of inequality in Philippine society. If this is so, it is perhaps the most disquieting aspect of international labor migration from the Philippines today."

Although Go said much research should to be done on migration and poverty and inequality to understand their links to each other. Migration "may fuel a simmering social volcano instead of douse it" in a country that is "fraught with social problems and economic difficulties."

For this purpose, the PMRN president said that serious attention must to be given to "channeling remittances into more productive investments to fuel economic development."

"The challenge is to manage the economic gains from international migration so that these can be more equitably shared by a much large number and cross-section of Philippine society."

Since 1999, the Philippines has received over US$6 billion in remittances--with all those passing through formal channels such as banks. Last year, the figure was US$6.235 billion--with US$5.124 billion from land-based OFWs and US$1.093 from the sea-based (the latter figure being the highest for the sector thus far).

BSP's remittance records showed that OFW remittances reached a high of US$7.367 billion in 1998. This figure is despite the perils brought by the 1997 Asian financial crisis.

Showing the macro-benefits of migration, from the period 1990 to 1999, Go said that remittances contributed an average of 20.3 percent to the country's export earnings and 5.2 percent of gross national product (GNP).

It should be noted that remittances are made directly to OFW families and beneficiaries, and as such, the national government does not receive any portion of OFW remittances.