Philippine International Migration: Causes and Consequences By Secretary Dante A.

Ang, Chairman, Commission on Filipinos Overseas (A guest lecture at the Dalhousie University, Canada, 16 April 2008)

Dr. Pauline Gardiner Barber, officials and faculty of the Dalhousie University, ladies and gentlemen, good morning. It is my pleasure to speak before you today, not only because this is my last speaking engagement in my week-long mission to the United States and Canada, but also because the topic Dr. Barber proposedinternational migrationis at the forefront of academic debate and public discussion. Do the benefits of international migration outweigh its costs? Its a good question. Let me start the dialogue by giving you a Philippine perspective of the issue. I have an interesting story to tell. In the Philippine development dictionary, there are often references to our overseas employment program as exporting skills, muscles and

brains to the developed nations and labor-importing countries. Personally, I am not comfortable with the word export because it connotes that

labor migration is a phenomenon largely motivated by business or by government fiat, and that personal choices have nothing to do with traveling to foreign lands. Let me assure you that the Philippine Constitution guarantees freedom of movement and abode and, parenthetically, social mobility. Migration therefore is as much a personal choice, as is in other democratic countries. Unlike other governments, however, we have developed a bureaucracy to ensure that overseas workers are protected wherever they

are found. Does this mean that

overseas employment

is a permanent

government program? No, it is not. Does this mean that labor migration, while a matter of personal choice, enjoys the support of the government? Yes. The government has a responsibility to its people, at home and overseas. The overseas program is designed as a temporary, stop-gap measure that will remain a government concern as the state strives to

build the economy, strengthening agriculture and the manufacturing, until we have produced a regime of well-paying jobs for every Filipino man and woman who needs one.

Overview of Philippine Migration History Migration in the Philippines is as colorful and interesting as our countrys history. In 1417, a trade mission to China headed by Zulu royalty Padua Bazaar marked the first recorded migration of the Filipino.1 During the Hispanic period, in 1763, Filipino seafarers who jumped one of the

galleons plying the Manila-Acapulco Galleon route eventually settled in the bayous of Louisiana.2 Our first venture into organized migration, however, was in the 1906 travel of agricultural labor to Hawaii, both being colonies

of the United States, in the case of the Philippines after more than 300 years of Spanish colonization. During this first wave, Filipinos also arrived in the United States as scholars or pensionado, a privilege granted by the US colonial government to woo the Philippine elite as it sought to Commonwealth run by Filipinos. establish a

Ang See (2006). From King to Peasant. The Saga of the Sultan of Sulu. The Manila Times. 2 Bautista (2002). The Filipino Americans: Their History, Culture and Traditions. 2nd edition

The second wave of organized migration came in the aftermath of the Second World War, when Filipino veterans who served in the U.S. armed

forces were given a chance to migrate to the United States along with their dependents, including Filipino war brides of U.S. servicemen. The 1960s

also saw the unprecedented reforms in the immigration laws of Canada (1962), the United States (1965) and Australia (1966), reducing restrictions to Asian immigration. Europe also introduced a guest worker program which many Filipino professionals took advantage of.

The third wave came in the form of contract labor in the 1970s, a time when the country was gripped by severe unemployment, especially in the ranks of the professionals. The unemployment rate in the Philippines

by 1970 had risen to an average of 11.8%. Towards the end of the Marcos era in 1985, unemployment reached 12.7%, the highest Philippine labor force rate surveys. constituted From 1971 of to the in the history of 1975, labor average force.3

underemployment

11.72%

Coincidentally, the Middle East oil boom in the same period provided the impetus for skilled and semi-skilled labor to migrate to other countries. persists to this day with much of the flow in recent years

The third wave

directed toward East and Southeast Asia as Japan, South Korea, Taiwan and Singapore became economic powerhouses in the 80s and the 90s. As overseas employment grew, the type of occupations shifted from construction work and engineering services to domestic work, tourism and

2003 Yearbook of Labor Statistics. Philippine Department of Labor and Employment.

service jobs, healthcare, communications technology and a host of other expertise.

Categories of migration flows from the Philippines As of 2006, an estimated 8.23 million overseas Filipinos4 were

working in more than 190 countries, categorized under three distinct flows: permanent or settler immigrants numbering about 3.5 million, found

mostly in the United States, Canada, Australia, Japan, United Kingdom and Germany; temporary migrants commonly known as overseas Filipino workers (OFWs), numbering approximately 3.8 million employed in Saudi Arabia, the United Arab Emirates, Kuwait, Hong Kong, Japan and, in recent years, Italy and Spain; and irregular the undocumented workers or unauthorized migrants, estimated at more than 800,000. The undocumented workers are the most vulnerable to exploitation, posing challenge to the Philippines and to most host countries. a continuing

Why Filipinos migrate I have often been asked the question: why do Filipinos migrate? As most migration literature explain it, the causes are attributed to push and

pull factors, the state of the economy at home and the attraction of wellpaying jobs overseas. On the home front, the economic growth has lagged behind many of our East and Southeast Asian neighbors. From 1961 to 2006, the Gross Domestic Product grew only 1.4% annually compared with

2006 Stock Estimate of Overseas Filipinos. Commission on Filipinos Overseas

Indonesia (3.6%), Malaysia (3.9%) and Thailand (4.5%).5 While growth picked up in recent years, much needs to be done in order to address

persistent unemployment, which hovered at 8 to 12% since the 1990s6, and underemployment, estimated at 22.7% in 2006. President Arroyo is committed to growing one million jobs a year in agricultureand she has delivered. Business process outsourcing has become a growth industry, creating new jobs for new labor market entrants, employing as many as 160,000 in 2005. Industry forecasts estimate that the sector will expand to employ at least one million by 2010.

The unemployment rate in the past few years is

exacerbated by a

relatively high fertility level estimated at 3.05 children per woman as opposed to fewer than 2.81 in Thailand, Vietnam, Indonesia and India7. Recent years have shown a decline in fertility rates by about .24% from five years ago, but not enough to allay concerns of labor supply continuously outstripping labor demand for years to come. It is clear that we have to moderate our population growth to provide jobs and basic services to every person.

On the other hand, the relatively higher income and benefits offered by employers overseas are hard to resist. Nurses, for example, who constitute the largest group of professionals to work outside the Philippines, find that salaries in countries such as the United States are a big

5 6 7

Philippines: Critical Development Constraints (2007). Asian Development Bank Ibid. CIA World Factbook and Index Mundi (2007)

improvement over what they receive back home. The median hourly rate for an entry level nurse in the US is $21.32/hour8 translating to a gross monthly income of $3,752.32/month while a nurse with the same qualifications in the Philippines would already be lucky to receive top private hospital. 10% of that amount in a

Additionally, the lure of higher incomes--especially in welfare states where education and healthcare are provided--means higher standard of living and greater economic independence for the OFWs families. Whenever host states provide for social services and make residence and family reunification easier, Filipino migrants are quick to sponsor their families to join them, as in the case of Australia, New Zealand and Canada. It may interest you to know that Canada is home to the second largest number of Filipino permanent residents abroad, numbering nearly 221,000 in 2007.

Estimates by the Canadian government could be much higher.

Clearly, higher pay, economic benefits and social security offered by host countries entice Filipino migrants to relocate. Nonetheless, we find that the same Filipinos continue to maintain strong linkages with the home country. Many in their twilight years also prefer to return and spend their retirement with their dollar savings.

www.payscale.com

Benefits of migration to the Philippines Remittances without a doubt are the most obvious benefit of international migration. For the past 10 years, remittances of Filipino migrants have contributed US$87 billion to the Philippine economy.9 In 2007, remittances pushed to an all-time high of US$14.4 billion, accounting for about 10% of the countrys Gross Domestic Product.10 Official development assistance to the Philippines in the same year pales in comparison, estimated at only US$1.25 billion.11 Over the past five years, remittances coursed through formal banking channels accounted for about 9.4% of the countrys Gross National Product. The 2004 Asian Development Bank study on remittances, say that this figure is underreported as informal and traditional remittance practices reduce the actual figure that workers send their families. In addition, current remittance figures do not account

for the value of in-kind remittances that migrant workers also bring home.

The same Asian Development Bank study claimed that could

remittances

be harnessed for to reduce poverty as remittances increase

household incomes and improve living conditions of families. A significant portion of the remittances is spent on basic necessities, housing, and education of the children.

The rising incomes of overseas Filipino workers also enabled them to save more money. An ADB study on the remittance of Filipinos in United

Central Bank of the Philippines Tetangco (2008). Governor of the Central Bank of the Philippines 11 Philippine Center for Investigative Journalism
10

States and Singapore revealed that 9 out of 10 said

that they were able to

save either in banks or through piggybanks. Seventy percent of the respondents claimed that they maintained bank accounts in the Philippines while 52% said that they used automated teller machines (ATMs) to remit money or make payments back home.

It must be emphasized, however, that remittances do not always yield positive results for the economy. The same ADB study posited that the compensatory nature of remittances presents a moral hazard or dependency syndrome that will likely impede economic growth as recipients would tend to reduce their participation in productive endeavors. It is in this light that the Philippine government encourages the productive use of remittances through business and investments to reduce the dependency of families on the income of principal breadwinners.

Based on our experience at the Commission on Filipinos Overseas, migration has brought about something more profound than just money remittances. The communitarian culture of Filipinos was something the workers also brought to their homeland, as Filipino organizations and communities, alumni associations, professional groups, and the like, have sprouted overseas. More than 4,000 Filipino associations thrive overseas, most of whom remain deeply connected with their Filipino roots, supporting development such as improvement of schools, churches, hometowns and provinces. For lack of a better term, the academe and non-government

organizations refer to this phenomenon as diaspora philanthropy, where migrant associations organize themselves to help their countrymen.

In 1989 the CFO created the Lingkod SA Kapwa Pilipino (LINKAPIL) or Link for Philippine Development Program to manage the flow of donations to communities ravaged by the eruption of Mt. Pinatubo and the disastrous earthquake that rocked Central Luzon. Through the years, the program has grown to become a testament to a strong partnership between Filipinos overseas and the homeland. For almost two decades, the CFO served as a conduit for more than P2 billion worth of donations12 to poor and underserved communities. Apart from providing immediate relief to communities affected by natural disasters, the program has provided a channel for migrant associations to create livelihood opportunities, rebuild schools, grant scholarships, augment public healthcare institutions, and run feeding centers for undernourished children.

Private organizations and foundations are beginning to recognize the importance of these types of resource transfers and assistance. A growing number of migrant partnerships are directly undertaken without government oversight or help. We encourage these transfers. The President of the Philippines, has instituted a reward system since 1991 to recognize outstanding achievements overseas that have benefited a sector, a community or a program that have national impact.

12

About US$48.7 million at prevailing exchange rate ($1=P41)

Albeit largely undocumented, technology and capital transfer through return migration has also benefited the Philippines. There are anecdotal reports of migrants who have established small to medium scale businesses through their savings or who have invested in franchises to create jobs and services. Our government is fast-tracking efforts to harness these transfers by putting up service desks to help migrants and their families set up businesses by increasing access to financial literacy training, business development counseling, and low-interest credit.

Costs of migration Some scholars assert that international migration has been

disadvantageous to the Philippines because remittances or skills transfer have not improved the economy. Personally, and many share this view, I do not believe that migration alone can provide the impetus for development

in the country. The experience of other countries shows a mix of successes and downsides. The most successful example is South Korea, which effectively integrated manpower export with contracts for overseas construction and engineering projects. South Koreas overseas employment program was also strongly linked with the governments comprehensive industrialization program, utilizing remittances to finance the importation of capital goods.13

Other countries are not so successful. Jordan, for example, experienced labor shortage and had to import workers from a neighboring
13 Vasquez (1992). Economic and Social Impact of Labor Migration. Philippine Labor Migration: Impact and Policy. Scalabrini Migration Center

labor-surplus country. The idea of a massive return migration for Jordanian workers did not work. In Yemen and Sri Lanka, emigration resulted in higher rates of internal migration from the rural areas to the cities, raising unemployment rates in the urban areas and seriously straining social services.14

The Philippines, on the other hand, has not reached the level where emigration has produced labor shortages. Where certain occupations are deemed critical, such as that of airline pilots, the government provided

safeguards by prescribing a longer notice of contract termination to allow the airline industry enough time to retrain replacements. Of course in such instances, closer government and private sector cooperation is essential

to monitor the labor market to avert skills drain. But before I discuss brain drain at length, allow me to address the more common negative consequences of Filipino migration.

Workplace abuses such as contract substitution, unfair working conditions and exploitation remain to be a challenge to the Philippine labor authorities. While safeguards are available in Manila to ensure minimum standards in salaries and working conditions, labor protection in some government has created a

receiving countries is wanting. Since 1995, the

system to extend legal assistance to migrants and to recognize joint liability between the local recruitment agency and the foreign principal. This

14

Ibid.

enables workers abused by employers to have access to judicial and quasijudicial bodies for legal remedy.

The feminization of migration in the Philippines, brought about by the increasing participation of Filipino women in labor migration came about in the 1980s well into the 1990s as women in Hong Kong and Singapore started joining the workforce and needed foreign household workers to

help in housekeeping and child-rearing. In Japan, the demand for female entertainers during the mid-80s also changed the gender dynamics of overseas work. Both occupations have placed women under threats of abuse. Early this year, the government banned the deployment of domestic workers to Jordan owing to escalating cases of abuse.

The increased participation of women in labor migration has also affected family life and the children left behind. While the media have

drawn attention to marital problems and infidelity caused by separation, studies indicate that most marriages and family life have generally remained stable.15 Some claim that juvenile delinquency or incomplete self identity may arise in single parent households. Again, there is no evidence to support this.

In 2004, a joint government-civil society research project sought to examine the impact of parental absence on selected aspects of well-being

15 Go and Postrado (1986). Filipino Contract Workers: Their Families and Communities. Asian Labor Migration. Pipeline in the Middle East

of children of migrant workers.16 The study showed that more children considered their families as not poor compared with children whose parents do not work abroad. Majority of migrants children also described their

parents relationship as very good (70%) compared to children of nonmigrants (59%). Physical health and school performance of children also seemed to be better compared to children of non-migrants. This shows

the considerable difference on how migration is portrayed by media and how migrant families, including children, lead their lives.

Perhaps, the most contentious negative effect of migration and that should be of keen interest to everyone is the prospect of a brain drain. It would be untruthful if I say that the Philippine government is not concerned about brain drain. In fact, as a country whose human resources remain to be its chief competitive advantage over its Asian neighbors, we are quick to note concerns about the quality of our schools and its effect on the quality of our workforce.

In trying to establish whether brain drain, exists, a reliable indicator would be the pace of technology change. The question: is, is there evidence that the loss of many professionals or technical and skilled manpower has slowed down technology change in the Philippines? A paper by the International Labor Organization in 1992 evaluated the changes in the structure of production of the Philippines compared with its Asian neighbors
The study is entitled Hearts Apart. Migration in the Eyes of Filipino Children conducted by the Overseas Workers Welfare Administration, Scalabrini Migration Center, Apostleship of the Sea and Episcopal Commission for the Pastoral Care of Migrants and Itinerant People.
16

such as Indonesia, Thailand and the Republic of Korea. In 1965, the Philippines was the most industrialized country of the four. But during the past quarter of a century, changes in the share of industry and manufacturing in total output in all of the countries were remarkable except for the Philippines. In other countries, the share of agriculture shrank, reflecting transformation in their respective productive structures, which would not have been possible without a corresponding technology change.17

Some may infer that the emigration of technical and skilled people has had adverse effects on the Philippine economic development but, again; there is little evidence to support this. The potential of the Philippines for absorbing foreign technology is among the highest in the region because of the size of its educated workforce. Furthermore, figures show that the Philippines has succeeded in shifting away from primary commodity exports, a sign that technology change was present. Technology change also requires that there are adequate human resources to master the technology. Still, the countrys total exports were much lower than those of Thailand and Indonesia which leaves us with the impression that technology change, albeit present, has been poor by regional standards. The ILO study also presumes that it would be hasty to conclude that slow technology change is attributable to emigration, further asserting that it may just be another

17 Abella (1992). International Migration and Development. Philippe Labor Migration: Impact and Policy. Scalabrini Migration Center.

dimension of the structural challenges facing the Philippines that contributes to further emigration.18

In the past five years, unemployment rates in the Philippines have steadily declined, with 7.9% unemployed in 2007. But the decrease in unemployment could still be attributed to high overseas deployment

combined with new jobs created in the services sector. With the rapidly graying population in developed countries, the World Health Organization projects that a global nursing shortage is imminent and developed countries will continue to demand human resources for health (HRH). As the top source of foreign nurses in the world, the Philippines remains to be a wise source because of our ability to educate, train and maintain a large of highly qualified RNs. There are concerns, however, that overseas employers seek nurses with the most experience. If this continues in the long term, it may hamper the competitiveness of the Philippine

nursing workforce. Thankfully, the wages of our faculty and deans of nursing colleges have risen significantly to retain their staff. Some employers and healthcare institutions have signed reverse brain drain agreements with source countries by providing foreign nurses abroad advanced training and requiring them to transfer their skills in the home country for a fixed number of years before being rehired by the sponsors.

The Commission on Filipinos Overseas, which I chair, is

developing

a transfer of skills program with the Philippine Nurses Association of

18

Ibid.

America to address concerns about shortages in qualified nursing faculty by inviting retiring Filipino nurse expatriates, particularly academicians, to help in continuing faculty development. For primary and secondary school teachers, the CFO is also providing an avenue for U.S.-trained Filipino teachers under the US Exchange Visitor Program to contribute to a scholarship program for aspiring teachers so that those who choose to practice permanently abroad can help in replacing qualified new teachers in public and private schools.

In the 1990s, the Philippines was among the countries that participated in the United Nations Transfer of Knowledge Through Expatriate Nationals (TOKTEN) program, tapping the expertise of expatriate Filipinos to contribute to the development of government capacities to better address human development. In about the same period, our Department of Foreign Affairs initiated the formation of Science and

Technology Advisory Councils (STAC) to encourage overseas Filipino scientists to form associations and initiate knowledge transfers. Slacks continue to exist in some countries despite the change of government in 1998.

Nonetheless, the interest of Filipino expatriates to help the Philippines become more competitive is rising. The Brain Gain Network,

established by Filipinos completing their doctoral degrees in electrical engineering at Stanford University, aims to provide a venue for networking among highly skilled and experienced Filipino and non-Filipino engineers,

scientists, and the like, to help increase the global competitiveness of the Philippine through a high technology economy. Founded in 1992, the network also has a mentorship program where experts can share their knowledge and help technopreneurs incubate business start-ups. We

hope to see the day when the Philippines develops its own version of Silicon Valley and capitalize on its talented workforce to fuel the growth of the economy.

Conclusion Indeed, the challenges brought about by international migration to the Philippines are multi-faceted. However long our history of migration is, many of us still aspire to a future where our people need not travel abroad to fulfill their dreams and ensure a brighter future for the next generation.

Social scientists claim that migration is a phenomenon commonly experienced by developing countries transitioning to industrialization. In the Philippines, the transition is probably taking longer than expected. But we

remain hopeful that this evolution will eventually come to pass as our migrants embrace new ways of thinking, learning new solutions to old problems, and eventually returning to the Philippines, richer in every sense of the word, and ready to take on the challenges of nation-building.

Thank you very much for your time and hospitality. From the beautiful islands of the Philippines, Mabuhay!