Economic Efeect on Working Abroad Essay Sample

Economic Efeect on Working Abroad Pages
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The contributions of overseas Filipino workers (OFWs) certainly provided a mechanism for sustaining the country’s growth and have been extremely significant to the Philippine economy, according to a report from the National Statistical Coordination Board (NSCB).

In the report “Counting and Monitoring the Contribution of OFWs [The Nation’s New Heroes],” NSCB Jose Ramon Albert revealed that in a span of three decades, the number of deployed OFWs in 1975 have increased tremendously from 36,035 in 1975 to over a million by 2006.

As of 2010, the number of OFWs has been estimated at 1.47 million. In 2011, the total number of OFWs continued its rising streak, expanding by 15.4 percent during the year, with the land-based and sea-based workers showing a climb of 19.5 percent and 2.5 percent, respectively.

“The phenomenal rise in these figures clearly points to the high premium put by the world to OFWs,” Albert said.

He said that based on Philippine Overseas Employment Association records, OFWs listed the Middle East and Balance Asia as their most preferred work destinations in 2010, accounting for 60.9 percent and 25.0 percent, respectively of the total deployed OFWs.

Compared to the 2000 deployment figures, preferences for work destinations in 2012 declined for Balance Asia and Europe, but increased for the Americas and the Middle East countries.

“It is worth noting that the Middle East countries hosted most of the OFWs in 2000 at 44 percent which even soared to 60.9 percent or more than half of the total number of OFWs in 2010,” Albert added.

Saudi Arabia and United Arab Emirates were the top country of destinations in the Middle East in 2010, while Hong Kong and Singapore were the favorite work places in Asia.

The NSCB chief noted that the estimated total count (1.470 million) of OFWs deployed in 2010 represent about 4 percent of the total number of employed persons in the country, which was reported at 36.488 million people persons by National Statistics Office’s October 2010 Labor Force Survey.

Contribution of GNI

Meanwhile, the compensation received by OFWs as estimated by the NSCB showed continuing increases resulting in higher estimates of the Gross National Income (GNI).

“The GNI represents the Gross Domestic Product [GDP] after accounting for the net primary income from abroad, composed mostly of the compensation of OFWs, aside from the property income and property expense recorded as part of the income of the economy from the Rest of the World [ROW],” Albert said.

He said that for 2011, its nominal value was 3.35 billion, contributing 26 percent to the GNI.

“Undoubtedly, the increasing number of OFWs improves the country’s GNI as estimates of compensation continue on an increasing trend, contributing on the average a share of 22 percent to GNI,” Albert added.

Remittances data as reported by the Bangko Sentral Ng Pilipinas has always been claimed to boost the GNI, as this contributes to higher estimates of household final consumption expenditures and gross capital formation.

In 2011 alone, OFW remittances amounted to $20.11 billion, or P871.25 billion, about 6.8 percent of the country’s GNI for the year.

The NSCB chief stated that with a population of 94.2 million in 2011, the Philippine economy expanded at a growth rate of 4.7 percent annually from 2000 to 2011.

The Net Primary Income (NPI) from abroad recorded a share of 17.2 percent in 2000, which escalated to 32.6 percent in 2010 and 31.7 percent in 2011.

“On the average, GNI grew by 5.8 percent during the period, 2000 to 2011. With the continued increase in GNI, NPI from the rest of the world likewise prospered, exhibiting an annual average growth rate of 10.7 percent in the same period,” he added.

On the other hand, Albert also asserted that while statistics clearly show the contribution of OFWs—in terms of compensation received from abroad and the resulting remittances—to the growth of the country’s economy, it is important to also examine if the rising number of OFWs has translated to better living conditions of their families.

He cited a policy note entitled “How do Filipino families use the OFW remittances,” written by Aubrey Tabuga, a research associate of the Philippine Institute for Development Studies, which suggests that OFW households are spending OFW remittances for better uses, such as education, medical care and housing besides other basic needs.

The NSCB chief commented that what remains unanswered is whether the economic benefits the country and OFW families gain far outweighs the social costs of having some of our countrymen and women leave their families, especially their children, behind.

Albert further said that during times of unrest, natural calamities and other disasters in the receiving country, a number of OFWs are forced to come home to the Philippines.

“Although in such cases, government provides some immediate temporary relief, often these Filipinos choose once again to become OFWs as they find that labor opportunities in the country cannot fulfill the economic needs of their families,” he added. An Overseas Filipino is a person of Filipino origin who lives outside of the Philippines. This term applies to Filipinos who are both abroad indefinitely as citizens or permanent residents of a different country, and to those Filipino citizens abroad for a limited, definite period, such as on a work contract or a student. It can also include seamen and others who work outside the Philippines but are not residents, either permanent or temporary, of another country.

They are known by a variety of terms with slightly different and sometimes overlapping meanings. Overseas Filipino Workers or OFWs are Filipinos working abroad that are expected to return permanently either upon the expiration of a work contract or upon retirement. Balikbayans are Filipinos who have become citizens of another country and have returned to the Philippines for a temporary though extended visit. Global Filipino is a term of more recent vintage that less widely used. Former Philippine President Gloria Macapagal-Arroyo applied the term Overseas Filipino Investor or OFI for Filipino expatriates who contribute to the economy through remittances, buying properties and creating businesses.[5] Manila Times October 15, 2012 p. 18

As a result of this migration, many countries have substantial Filipino communities.

Population

It is estimated that between 9.5 million to 12.5 million Filipinos work or reside abroad, about 11% of the total 2010 population of the Philippines.[6][7] More than a million Filipinos every year leave to work abroad through overseas employment agencies and other programs, including government-sponsored initiatives. A majority[dubious – discuss] of them are women applying as domestic helpers and personal service workers.[citation needed] Others emigrate and become permanent residents of other countries.

Overseas Filipinos often work as doctors, physical therapists, nurses, accountants, IT professionals, engineers, architects,[8] entertainers, technicians, teachers, military servicemen, seafarers, students, caregivers, domestic helpers, fast wood workers especially in the middle east and maids. The exodus includes a number of skilled workers taking on unskilled work overseas, resulting in what has been referred to as a brain drain, particularly in the health and education sectors.[citation needed] For example, doctors have retrained to become nurses.[citation needed] Economic impact

In 2012, the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, expects official remittances coursed through banks and agents to grow 5% over 2011 to US$21 billion, but official remittances are only a fraction of all remittances.[9] Remittances by unofficial, including illegal, channels are estimated by the Asian Bankers Association to be 30 to 40% higher than the official BSP figure.[9] In 2011, remittances were US$20.117 billion.[10] This Philippines is the fourth largest recipient of official remittances after China, India, and Mexico.[9] OFW remittances represent 13.5% of the country’s GDP, the largest in proportion to the domestic economy among the four countries.[11] In 2012, approximately 80% of the remittances came from only 7 countries–United States and Canada, the United Kingdom, UAE and Saudi Arabia, Singapore, and Japan.[10] These countries are widely dispersed around the globe–in North America, Europe, the Middle East, Southeast Asia, and East Asia, respectively.

http://en.wikipedia.org/wiki/Overseas_Filipino

“Counting and Monitoring the Contribution of OFWs Filipino version (The Nation’s New Heroes)”
by Jose Ramon G. Albert, Ph.D 1

This October, our celebration of the National Statistics Month, focuses on “Monitoring Progress on Decent Work Through Statistics: Pathway to Inclusive Growth.” Undoubtedly, decent work has eluded a considerable number of our countrymen. Some of them have even become today’s wandering Jews, pursuing better economic prospects for their families by working overseas. Of late, these countrymen have been referred to as our nation’s new heroes (Bagong Bayani) as their aggregate contributions to the Philippine economy have been extremely significant, and certainly provided a mechanism for sustaining the country’s growth. The 1974 Labor Code of the Philippines (under then Presidential Decree 442) paved the way for the formal deployment of Filipino workers abroad. Since 1974, it has been important to pay specific attention to Filipino laborers abroad, describe “who are they and where do they go?” in order to provide them proper attention.

The Migrant Workers and Overseas Filipinos Act of 1995 named the Filipino laborers abroad as “Overseas Filipino Workers (OFWs)” or “Migrant Workers”. These refer to “persons who are to be engaged, are engaged, or have been engaged in a remunerated activity in a state of which he or she is not a citizen”. For purposes of counting them, the National Statistics Office (NSO) through its Survey of Overseas Filipinos (SOF) identified them as “persons who are presently and temporarily out of the country during the reference period to fulfill an overseas contract for a specific length of time or were presently at home on vacation during the reference period but still had an existing contract abroad.” Phenomenal Rise in the Number of OFWs

In a span of three decades, Figure 1 illustrates the number of deployed OFWs in 1975 have increased tremendously from 36,035 in 1975 to over a million by 2006. As of 2010, the number of OFWs has been estimated at 1.47 million (38.4 percent higher than its 2006 figure). In 2011, the total number of OFWs continued its rising streak, expanding by 15.4 percent during the year, with the land-based and sea-based workers showing a spread of 19.5 percent and 2.5 percent, respectively. The phenomenal rise in these figures clearly points to the high premium put by the world to OFWs. Based on POEA records, OFWs listed the Middle East and Balance Asia2 as their most preferred work destinations in 2010, accounting for 60.9 percent and 25.0 percent, respectively of the total deployed OFWs.

Compared to the 2000 deployment figures, Figure 2 shows that preferences for work destinations declined for Balance Asia and Europe but increased for the Americas and the Middle East countries. It is worth noting that the Middle East countries hosted most of the OFWs in 2000 at 44.0 percent which even soared to 60.9 percent or more than half of the total number of OFWs in 2010. In particular, Saudi Arabia and United Arab Emirates were the top country of destinations in the Middle East in 2010, while Hong Kong and Singapore were the favorite work places in Asia.

The estimated total count (1,470,806) of OFWs deployed in 2010 represent about 4.0 percent of the total number of employed persons in the country, which was reported at 36,488,781 persons by NSO’s October 2010 Labor Force Survey (LFS). Growing Compensation of OFWs as GNI improves

The compensation received by OFWs as estimated by the National Statistical Coordination Board (NSCB) showed continuing increases resulting in higher estimates of the Gross National Income (GNI). The GNI represents the Gross Domestic Product (GDP) after accounting for the net primary income from abroad, composed mostly of the compensation of OFWs, aside from the property income and property expense recorded as part of the income of the economy from the Rest of the World (ROW). The money received by OFWs in the form of salaries and wages including other compensation paid to OFWs (like overtime pay, bonuses, clothing allowances, etc.) are accounted for as the OFWs “compensation”.

For 2011, its nominal value was 3.35 billion, contributing 26.0 percent to the GNI. Undoubtedly, the increasing number of OFWs improves the country’s GNI as estimates of compensation continue on an increasing trend, contributing on the average a share of 22.0 percent to GNI. Remittances data as reported by the Bangko Sentral Ng Pilipinas (BSP), has always been claimed to boost the GNI as this contributes to higher estimates of household final consumption expenditures and gross capital formation. In 2011 alone, OFW remittances amounted to 20.11 billion USD (or Php 871.25 billion), about 6.8 percent of our GNI for that year. With a population of 94.2 million in 2011, the Philippine economy expanded at a growth rate of 4.7 percent annually from 2000 to 2011.

The Net Primary Income (NPI) from Abroad recorded a share of 17.2 percent in 2000, which escalated to 32.6 percent in 2010 and 31.7 percent in 2011.  On the average, GNI grew by 5.8 percent during the period, 2000 to 2011. (See Figure 3) With the continued increase in GNI, NPI from he rest of the world likewise prospered, exhibiting an annual average growth rate of 10.7 percent in the same period.

Better living standards for families of OFWs?

While statistics clearly show the contribution of OFWs (in terms of compensation received from abroad and the resulting remittances) to the growth of the country’s economy, it is important to also examine if the rising number of OFWs has translated to better living conditions of families of OFWs. A policy note entitled “How do Filipino families use the OFW remittances”, written by Aubrey Tabuga, a research associate of the Philippine Institute for Development Studies (PIDS), suggests that OFW households are spending OFW remittances for better uses, such as education , medical care and housing aside from other basic needs. These findings are similar to those of other researches conducted on OFW remittances. Undoubtedly, Henry Sy and a number of our Filipino Chinese taipans have been big beneficiaries of such increased household final consumption expenditure. What remains unanswered is whether the economic benefits the country and OFW families gain far outweighs the social costs of having some of our countrymen/women leave their families, especially their children, behind.

During times of unrest, natural calamities and other disasters in the receiving country, a number of our OFWs are forced to come home to the Philippines. Although in such cases, government provides some immediate temporary relief, often these Filipinos choose once again to become OFWs as they find that labor opportunities in the country cannot fulfil the economic needs of their families. When I was stationed in Qatar for several months (as an OFW), I heard harrowing stories of OFWs not getting their salaries on time, being promised wages much higher than what they were getting, and suffering verbal (and even physical) abuse from their employers.

Immediately, after hearing these stories in Doha, I got the chance to chance upon Organisasyon ng mga Pilipinong Mang-aawit (OPM) President Ogie Alcasid, my schoolmate from La Salle Green Hills, and I encouraged him to write a song about the plight of OFWs. I am glad that Ogie not only wrote a song regarding OFWs, but also organized, together with other OPM artists, the “Balik Ka Bayani” benefit concert for OFWs in 2011. So, ultimately, like every decision in life, there are benefits and costs. For OFWs, they have chosen to pursue economic gains even if leaving their children behind may yield irreparable harm to the ties that bind their families… how much are we, especially taipans like Henry Sy (who are reaping a lot of benefits from the toil of OFWs), doing to help these new heroes?

http://www.nscb.gov.ph/beyondthenumbers/2012/10082012_jrga_ofw.asp

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