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Archive for August, 2011

Advocating Financial Literacy to Overseas Filipino Workers (OFWs)


 by Juan “Jed” E. Dayang, Jr.*


During my diplomatic and consular posting at the Philippine Embassy in South Korea,  my interest in personal financial management skills development slowly intensified as my six-year tour of duty was about to end.

Books on wealth management, wealth creation, and making the most of one’s money and resources were some of the staple reading materials I studied.

In my college days, I did well, out of sheer interest, in business, finance, and accounting subjects.  The practical understanding of finances made it easier for me to make informed and effective decisions. My interest in business and finance was reignited when I was tasked to initiate the Financial Literacy Program for Overseas Filipino Workers (OFWs) in South Korea.

One of the most valuable lessons of savings and investments is having a mindset of “paying yourself first.”  It’s a simple trick.  Before spending for anything, set aside a portion for savings. Using principles of compound interest over periods of time, $1 today could be $100 tomorrow. But one has to start saving and investing today.

I also learned from the book “The Millionaire Next Door” by Stanley and Danko that America’s wealthiest were also among the most frugal people.  These wealthy Americans built their riches through simple living. They also  generated assets through active and passive incomes, the latter being generally referred to as “making your money work for you.”

As I educated myself on personal financial management, I also felt the urge to share this newly acquired knowledge to OFWs.  I thought that they would benefit immensely from financial literacy knowledge and money management skills.  They could earn active and passive incomes that could  sustain them and their families financial even when they have decided to return to the Philippines “for good.”

My initial and informal survey of Filipino workers in Seoul to find out about their saving patterns revealed that many of them will return home without savings nor sound investments. I spoke with  Natty (not her real name), who intimated that despite working for five years as a nanny, she has not managed to set-aside her own savings. The reason was that she sent all her earnings back home to help her family and relatives. She also lamented that her hard-earned income were spent on consumer goods and “unnecessary expenses” instead of investments.

The tale of Natty  is not surprising.   The Philippines has one of the lowest savings rates in Asia,  Iestimated at 19-23% of the GDP. Its neighbours Malaysia, Singapore, and Vietnam posted savings rates from to 34-40%  of GDP.  In terms of financial literacy, Filipino scored low according to the latest Citi Financial Quotient (Fin-Q) survey by Citi Bank.   In 2011, the average score was 48.9%, slightly lower than last year’s 49% but higher than 46.6% in 2008 and the 47.8% baseline score in 2007.[1]  In addition, based on a survey cited by Sun Life, “out of 100 Filipinos, 90 percent have little or no savings at all. Out of 100 Filipinos who get sick, 95 percent sacrifice their savings, out of 100 Filipino children, only 10 percent will graduate from college. Out of 100 Filipinos aged 65, 45 percent are dependent on relatives.”[2]  These results show the need for more aggressive financial literacy education programs to help Filipinos attain financial management skills.

In 2008, when Ambassador Luis T. Cruz, thought of initiating a savers’ club in South Korea, I jumped at the opportunity to take the lead in conceiving the FLP for OFWs in South Korea.   With the backing of the Ambassador, I worked with the Overseas Workers Welfare Administration (OWWA), which just launched a “return and reintegration program” for OFWs, and with the Philippine Trade and Investment Centre (PTIC).   OWWA provided funding support and assisted in preparing the training program, while PTIC promoted the “one town-one product” concept to promote OFW investments in their hometowns. With the FLP in motion, the Philippine Embassy in Seoul was the first to implement the financial literacy seminars among Embassies scattered around the globe.

The FLP, which started on March 30, 2008  was introduced to OFWs in Seoul and later to other parts of South Korea. With the help of Filipino community groups,  the Embassy was able to initiate more than a dozen seminars to more than 400 participants in less than a year.  Based on a study conducted by the author using a pre-test, post-test survey[3], the FLP improved the participants’ financial literacy and money management skills. The respondents also showed keen interest in applying their newly acquired knowledge and to share them with their families. The program has demonstrated its relevance, effectiveness and replicability.  For the past three years, the Embassy has been conducting FLPs as well as training in entrepreneurship to OFWs in South Korea.

The objectives of FLP vary from maximizing the potentials of remittances to poverty-alleviation and development in the  Philippines to forming values of thrift to OFWs.   The FLP also provides the government an opportunity to engage with Filipino communities overseas productively.

Financial literacy education to OFWs as well as to other disadvantaged sectors (for example youth and women) is timely as the world is experiencing the global financial crisis.  These days with the recession in the United States and the economic gloom in Europe, we are facing an “increasingly perilous financial world.”[4]  During these uncertain times, it becomes even more imperative to promote financial literacy and learn the value of savings, creating passive income, diversifying investments, planning for the long-term, setting-up an emergency fund or having insurance, and saving for the future by practicing frugality—concepts every individual must be aware of in good economic times or bad, with or without the current financial crunch.

Achieving financial freedom is one of the ways human beings could live a more dignified and fruitful life. By learning personal financial management skills and by sharing it to others even to just one disadvantaged person, we could help eradicate poverty.

 

 

 

 

*Jed, an advocate of financial literacy to OFWs,  initiated and coordinated the Financial Literacy Program of the Philippine Embassy in Seoul, South Korea in 2008. He made a study on the “Effects of Financial Education to OFWs in Seoul: Evidence from a Survey” supervised by the Political Science Department of the University of Oklahoma in 2009. He has continued his advocacy by conducting seminars on a pro-bono basis and recently started a blog titled “Tips on Saving Time, Money and the Planet” (http://savetimemoneyearth.wordpress.com/).


[1]Doris C. Dumlao, “Filipinos upbeat about financial future,” Philippine Daily Inquirer, June 3 2011.

[2] Patricia Esteves, “To raise Pinoys’ financial literacy is Sun Life’s advocacy ” The Philippine Star, August 15 2011.

[3] See “Effects of Financial Literacy Program to OFWs in Seoul: Evidence from a Survey,” thesis of Juan E. Dayang, Jr., Masters of Public Administration,University of Oklahoma, Norman.

[4] Elizabeth Johnson and Margareth Sherraden, “From Financial Literacy to Financial Capability Among Youth,” Journal of Sociology and Social Welfare 24, no. 3 (2007).

Financial Literacy Campaign and the Philippine Government


by Juan E. Dayang, Jr and Arnel G. Talisayon

President Benigno Aquino III, who promotes job creation rather than emigration, confers with Vice President Jejomar Binay during the 2010 Model OFW Family of the Year Awards rites in Manila (photo: Ryan Lim, GMA News).

Government Promotes  “Culture of Savings” to OFWs[*]

The number of Overseas Filipino Workers  (OFWs) has reached more than 10% of the Philippine population. The Philippines is among the top  receiver of remittances in 2010 with approximately $18.76-billion total. The remittances of Overseas Filipinos substantially help the Philippine economy and provide enough buffer for the country to weather financial  shortfalls.

This phenomenon of labour migration has become so widespread that one out  of every ten Filipinos is a migrant worker. Almost half of the total Filipino population depends in some way on the earnings of a migrant worker relative. The Philippine Government has therefore made it a point to safeguard the basic rights of the Filipino OFWs and to promote their welfare.

Nevertheless, the sustainability of this reliance on foreign remittances has been criticized time and again. Among other reasons, there appears to be a phenomenon where OFWs and their families left back home fail to improve their quality of life in the long-term, giving rise to a so-called temporary middle-class: while one member of the family works abroad, the rest of the family members enjoy substantial material comforts. This sense of sufficiency and security immediately stops as soon as the OFW finishes one’s contract and returns home.

The family then regresses to square one—at least until another family member packs and leaves to work abroad.  According to Overseas Workers Welfare Administration (OWWA) Officer Esperanza Cobarrubias, a glaring similarity in many cases is the wanton lack of savings as the remittances are used up for material acquisitions (expensive mobile phones, cars or entertainment systems) in keeping with the newfound middle class status.

Due to this phenomenon, the Philippine government had launched a financial literacy campaign to help educate OFWs on the proper way to invest their dollars and become Overseas Filipino Investors or OFIs—a positive retake on OFWs. This campaign emphasizes sound financial management in order to become better decision makers, the first step towards which is increasing awareness about setting aside  portion of one’s income for future use or, in other words, saving.

In response, the Central Bank of the Philippines (BSP) has undertaken a nationwide “Financial Literacy Campaign.” Since February 2006, the BSP has been providing resource persons and other logistics requirements to teach entrepreneurship and investments in different financial instruments and has extended this campaign to 24 cities and provinces.

The BSP has in fact launched the first of its international road shows in Hong Kong on September 14, 2008. According to the BSP, the whole-day forum underscores the importance of savings and informs participants of alternative opportunities for their remittances, such as placements in financial instruments and investments in business ventures.

“Financial education is key to unlocking the potential of remittances as a tool for development in countries like the Philippines with a large segment of the population employed overseas,” said BSP Governor Amando M. Tetangco, Jr. The program also hopes to prepare Overseas Filipinos for their eventual reintegration into the country. The BSP continues to bring its campaign to countries with a large concentration of overseas Filipinos, such as Singapore, Japan, Italy and Saudi Arabia.

The Philippine government, under President Benigno C. Aquino III, continues to underscore the need for financial education among overseas Filipinos. Thankful for the invaluable contributions of OFWs to the Philippine economy yet aware of the challenges of migration, it has consistently emphasized financial literacy as a key component in shoring up the economy and mitigating the social impacts of migration.

Note:

The Financial Literacy Campaign  of the Philippine Embassy in South Korea was initiated in 2008 by then Consul and Second Secretary Juan “Jed” Dayang, Jr. with the Philippine Overseas Labour Office-OWWA’s then Welfare Officer Esperanza Cobarrubias and  Commercial Counsellor Edgardo Garcia.   Arnel,  consul and second secretary at Embassy in Seoul  coordinates  the Financial Literacy Campaign (FLC)  to OFWs in South Korea. The FLC remains the flagship project of the Embassy under leadership of Ambassador Luis Cruz.


[*] Updated by Jed from the co-authored original publication by  Jed Dayang and  Arnel G. Talisayon, “Financial Literacy Campaign and the Philippine Government,” Embassy News(2008), http://www.philembassy-seoul.com/forms/Vol_1_Special_Issue.pdf.

For more details on the program of BSP, see: Financial Education Master Plan (FEP) Vision – Financial Education: Building Block for a Stronger Economyat: http://www.financial-education.org/document/3/0,3746,en_39665975_39667065_40280579_1_1_1_1,00.html

Financial Literacy Campaign and Overseas Filipino Workers (OFWs)

August 17, 2011 1 comment

by Arnel G. Talisayon*

Human Dimensions of Financial Education[1]

A Filipino who desires to work abroad typically gives only one answer when asked why he or she is willing to leave the family for a potentially difficult and lonely job outside the country: “Paramaka-ipon.” (“To save.”)

Abroad, five years later, with a take-home  pay amounting to more than the equivalent  salary of a highly skilled professional working  in Manila, the response to the same question is ominous. Still bereft of savings, and without a fallback career in the Philippines, the worker is forced to remain abroad while waiting for an apparently elusive financial stability.

The social cost of migration is hard to ascertain, especially when migration is seen  as an economic need, not a career option. Migration has been around for as long as humanity existed; in modern times, and in the context of the Philippines, migration generally assumes the form of at least one member of the family working abroad to provide financial support to those back home. Sadly, the breaking up of families becomes an inevitable consequence of migration as any of the father, mother, son or daughter becomes part of a foreign nation’s workforce for an indefinite period of time, or until the worker has “saved enough.”

The implications of this setup are manifold. Therefore, for any Financial Literacy Campaign to be effective in the Philippines,  it must take into account the real social impacts of migration and the cultural defaults of Filipino families as at least one of their members depart for work abroad. For instance:

•  Because of unsound financial management, many Filipinos have no savings even after their contracts abroad have expired. Many decide to stay in the foreign country illegally and work odd jobs. Since they do not have the legal protection guaranteed by proper visas, they are prone to abuse, their welfare is often compromised for a lower-than average pay, and they live in constant uncertainty for fear of being rounded up by immigration authorities. Some undocumented workers enter the foreign country as tourists.

•  Underemployment among Filipino workers is prevalent.  Majority of Filipino factory workers in South Korea, for instance, are college degree holders. Some are professionals—engineers, teachers, writers—who decide to engage in blue collar jobs because of the lure of a higher salary. Brain drain in the Philippines is a recurring issue.

•  Overseas Filipino Workers (OFWs) often complain that, in the end, it is the bond of the family that suffers. Stories about children growing up with an absentee father or mother abound. Because children grow up materially satisfied and accustomed to the idea of migrant jobs, they form a new generation of individuals whose end goal is to leave the country for greener pasture abroad, hence creating a cycle and mindset of foreign-work dependency.

•  Studies by the International Monetary Fund reveal that many of the families left behind in the Philippines refuse to find work of their own and rely merely on remittances. Perhaps because of guilt for being away from their families, workers also tend to acquiesce to the material requests of their relatives, from top-of-the-line mobile phones to entertainment systems. A so-called temporary middle class is thereby created. Once the migrant worker returns home, the main source of income vanishes, and the material acquisitions are sold below cost. The family languishes in uncertainty, until the same, or another, family member goes abroad again.

•  There is a tendency for migrant workers to support not only their respective families, but their extended families as well. A tightly knit clan—an indispensable feature of Filipino culture—becomes a breeding ground for dependency as several families rely on one or two main breadwinners to support their utility bills, schooling, house construction, hobbies, and other expenses.

•  Somehow, remittances, no matter how big, are never enough. Domestic spats can revolve around one sentence: “Where did the money go?”

A successful Financial Literacy Campaign, therefore, needs to address not only literacy levels but, more importantly, the mindsets of the workers and their families. This is easier said than done and will require constant coordination with the workers and their families. Mindsets are deeply ingrained and paradigm shifts challenging to come by. Yet the seeds of changing behaviors are already planted in the minds of foreign workers—they themselves know, every time they work long hours and miss their families, that change is necessary. They simply need guidance in enabling change.

Of course, no financial literacy campaign will succeed without national financial infrastructures and support mechanisms in place. The Philippine Government, through agencies such as the Central Bank of the Philippines, the Overseas Workers Welfare Administration, the Philippine Deposit Insurance Corporation and the Department of Foreign Affairs, has come up with programs specifically catered to OFWs. These include hedging facilities to help protect against the fluctuations of the exchange rate, attractive insurance packages, support systems for start-up SMEs, entrepreneurship courses, a greater selection of remittance options, unit investment trust funds and other investment schemes.

Ultimately, the Financial Literacy Campaign must be aware of the very human dimension of financial issues. It must understand the cultural defaults of the nation, and work through these parameters to effect change. The Financial Literacy Campaign is not so much about the money, as it is about the integrity and pursuit of a better life of the individual and his or her family.

Note: Arnel is a Foreign Service Officers II, assigned as Consul and Second Secretary at the Philippine Embassy in Seoul and coordinates the Financial Literacy Campaign (FLC)  to OFWs in South Korea. The FLC was initiated in 2008 by then Consul and Second Secretary Juan “Jed” Dayang, Jr. with the Philippine Overseas Labor Office-OWWA’s then Welfare Officer Esperanza Cobarrubias and  retired Commercial Counsellor Edgardo Garcia.  The FLC continues to be the flagship project of the Embassy under leadership of Ambassador Luis Cruz. 


[1]  See original publication at:   Arnel G. Talisayon, “Financial Literacy Campaign and the Filipino People,” Embassy News(2008), http://www.philembassy-seoul.com/forms/Vol_1_Special_Issue.pdf.

Photo Credit: http://finlittv.com/2011/05/financial-literacy-program-for-ofw-families-crucial/

Philippine Pull-out in the Coalition Forces in Iraq to Save Angelo de la Cruz

by Juan “Jed” E. Dayang, Jr.

The Australian National University

 

The last of the Australian contingent to the war effort ended when seventeen soldiers returned home from Iraq on August 6, 2011. It was a year after President Barack Obama withdrew  U.S.combat troops from Iraq that ended the 7 ½ year war which President George W. Bush started on March 20, 2003 through the  U.S.-led multinational coalition. The casus belli was the belief that Saddam Hussein had a stockpile of weapons of mass destruction (WMD) that threatened the West.  Based on evidence, the world knows  that Iraq did not have an arsenal of WMD and that the war, which left 4,415 American soldiers and more than a hundred thousand Iraqis dead, was aimed at regime change in Iraq.

The  Philippines was also part of the U.S. led “coalition of the willing.” However, compared with other coalition members, the Philippines  pulled-out its 51- man  humanitarian contingent in Iraq in July 2004,  days ahead of schedule  in a last-ditch effort to save the life of Filipino truck driver Angelo dela Cruz who was threatened with beheading by the so-called Iraqi Islamic Army-Khaled bin Al-Weleed Corps if the government did pay ransom and did not pull-out its troops from Iraq.

Foreign Secretary Delia Albert announced the early pull-out of the Filipino troops from Iraq.  Undersecretary Rafael Seguis, a veteran career diplomat, who also negotiated the release of another OFW Robert Tarongoy from his Iraqi kidnappers in 2005, led the Iraq Crisis Team. The government decision angered the U.S. and its allies. Australian Prime Minister John Howard said  that  “I don’t want to be harsh on a friend, but it is a mistake and it won’t buy them immunity”.

Pulling out from the US-led “Coalition of the willing[1]

In the Philippines, foreign policy emanates from the President. The case of Dela Cruz is noteworthy because of the decision of President Gloria M. Arroyo to withdraw from the coalition was seen as the Philippine abnegation of its commitment with a long-time ally, the United States which it shares a common history being a former colonial master. The Philippine relations with the U.S. was at its peak because it was one the first countries who supported the U.S. in its decision to go to war in Iraq. It warmed the relations of the nations whose relationship cooled after the Philippine Senate decided not to renew the Philippine-U.S. Bases Agreement in 1991.

The Philippine government was torn between saving Dela Cruz or keeping with its commitments with the coalition. The hostage taking of Dela Cruz gripped the nation with distress by the impending beheading of Dela Cruz by his captors. The government was reminded of the public furor  when a Filipina maid, Flor Contemplacion, was hanged in 1995 raising the people’s awareness of the sufferings of Overseas Filipino Workers (OFWs) without government’s full  support. Again, as in the case of previous people power revolts in the Philippines that toppled the dictatorial rule of Ferdinand Marcos in 1996 and the presidency of Joseph Estrada in 2001, the government  was again brought down to its knees by a potential people power demonstrations.

President  Arroyo defended her position from criticisms from coalition forces Iraq by affirming that saving lives of OFWs was more important to her than international acclaim and affirmed that the country’s “foreign policy is to defend national interests, including the safety of OFWs.”[2]  She said that she made the force to agree with the kidnappers to prevent Filipinos abroad, particularly the large numbers of OFWs in the Middle East, from being the targets of terrorism or held hostage by insurgents. Arroyo’s first State of the Nation Address (SONA)  in July 2004 came on the heels Dela Cruz’s release and return to the Philippines. She used the SONA as an opportunity to announce a new policy direction she called“mamamayan muna” or “people first”.

The President’s decision calmed down the Filipino public. There were sectors, particularly members of the coalition, who were angered by her decision. In the Philippines, many welcomed it. For example, in a forum organised by the University of the Philippines on 12 August 2004 titled “Hostaged? Philippine Foreign Policy after Angelo de la Cruz”, retired Ambassador Nelson Lavina who wrote a paper entitled “Angelo and Philippine Foreign Policy–A Post-Mortem”, said:

  “the recent announcement by the Department of Foreign Affairs that protection of contract workers is now the third pillar of Philippine foreign policy is very much welcome. It is only now, during the term of Foreign Affairs Secretary Delia Albert that the foreign policy postulating protection of Filipino contract workers is in effect.”[3]

In the same forum, Foreign Affairs Spokesperson Gilbert Asuque defended the President’s decision saying that:

“The President was guided on deciding this issue by existing policies of the Philippine government, which is the Constitution. The Constitution says that the president, the government, is bound to protect the Filipino people. The Department of Foreign Affairs and, of course, the government will have to assist Filipinos in distress. So, the President of the Philippines was in fact implementing such policy.”[4]

Travel Ban and OFWs in Iraq

As a result of the kidnapping of OFW Angelo dela Cruz, the Philippine travel and deployment ban to Iraq became compulsory in July 2004.  Owing to the long-term unstable security in Iraq, the Philippine government has maintained the deployment ban in Iraq.[5]   Until 2010, there were still about 6,000 OFWs working for US Contractors despite the ongoing ban.[6]   Today, there are calls from OFWs, including Dela Cruz, who have returned to his native province Pampanga, for the government to lift the ban after President Obama’s promise of U.S. pull-out after the March presidential election and infrastructure development taking place in Iraq that would open up jobs for OFWs.[7]

Conclusion

The Philippine decision to pull-out its troops  to save a Filipino life is highly contentious and does not lend itself to easy answers. Many of what critics have said are also worthy of examination. What was clear in the Dela Cruz hostage case was that   Presidential decisions in the Philippines were constrained by the high political demands of the Filipino public to protect OFWs, which number to more than 5 million all over the world.  The choice between pulling-out its troops from the U.S. coalition and saving a human life was a turning point in the Philippine government’s direction to enforce its mandate to protect OFWs.


[1] For a discussion on  Philippine foreign policy after the release of Angelo dela Cruz and the  withdrawal of the Philippines from its membership in the “coalition of the willing” read “Proceedings”, (paper presented at the A Public Forum: Hostaged? Philippine Foreign Policy After Angelo dela Cruz

University of the Philippines, 2004 ).

[2] “Summary: President Arroyo’s State of the Nation Address from 2001-2008,” GMA News, http://www.gmanews.tv/100days/story/168440/summary-president-arroyos-state-of-the-nation-address-from-2001-2008.

[3] “Proceedings.” p.136.

[4] Ibid. p.138.

[5] The Migrant Workers Act (R.A. 8042 of 1995 as amended by R.A. 10022 of 2010) mandates that the government hold fast to stringent guidelines in allowing the employment of OFWs to other countries, and impose heavy penalties on government officials who agree to deploy migrant workers without guarantees required by law.[5]

[6] The travel ban imposed by the Philippine government was supported by the US when US Air Force Colonel Richard Nolan of Central Command’s Contracting Command stated in a memorandum dated July 20, 2010 that contractors who employed people from countries which prohibits work and travel to Iraq, including about 6,000 from the Philippines, must return them home. See  Veronica Uy, “US orders pullout of OFWs in Iraq by August 9,” Philippine Daily Inquirer, July 27,2010 2010.

[7] Roli Talampas, “Angelo dela Cruz: ‘It’s time to lift the Iraq ban’,” Philippine Daily Inquirer, June 7, 2011.

Proposed Single-Destination Passport in Indonesia: A Misguided Protection Policy?

by Firtriana Nur*

Despite its good intentions, the government may be considering a misguided policy after Jumhur Hidayat, head of the National Board for the Placement and Protection of Indonesian Overseas Workers, recently announced a proposal to issue single-destination passports to migrant workers, restricting them from traveling anywhere except their intended destination.
The board, also known as the BNP2TKI, says this will be an effective way to prevent trafficking in persons. It says trafficking syndicates and rogue placement agencies move victims — using official channels — from one country to another and, once there, they are trafficked. The single-destination passport is supposed to prevent migrant workers being “sold” to other countries.

In trying to get a grip on the logic here, let us first look at the United Nations’ definition of human trafficking. A trafficking case should have three elements: The movement (recruitment, transportation, harboring and reception of a person); the means (deception, fraud, coercion, abduction, abuse of power or abuse of vulnerability); and the purpose (labor exploitation, sex exploitation, forced labor, removal of organs, etc.).

It is important to understand the purpose of trafficking: The exploitation of human beings. The movement of victims only serves as a means. Thus, a single-destination passport does not guarantee any real prevention.

When I was in Jordan in February, I visited the Indonesian Embassy in Amman. I met about 200 Indonesian women, mostly domestic workers, who were housed inside the compound for protection. Most of them did not have passports with them because they were either taken away by recruitment agents or employers. A few that I spoke with said they had gone to Jordan for work but ended up being trafficked. According to the embassy, about five domestic workers a day show up seeking protection from abusive employers or agents. Imagine if there was no embassy nearby and the only way of seeking protection would be to flee to a neighboring country. What protection would the single-destination passport provide in that case?

While the goal of protecting migrant workers is laudable, and creating a unique migrant worker passport similar to what was once used for the hajj may offer benefits, this current quick-fix proposal reveals a fundamental misunderstanding about trafficking and the realities facing migrant workers abroad.

The policy would criminalize the movement side of trafficking, but fail to address the main problem. The real peril facing migrant workers is exploitation. Even if the government decides that migrant workers can only work, say, in Malaysia, they can still be exploited there. Fundamentally, the exploitation occurs because migrant workers are treated as a commodity by recruitment agencies, they are not well prepared before departure, employers feel they can abuse them and the government rarely punishes recruitment agencies who commit trafficking offenses.

The worry is that while limiting the movement of workers with a single-destination passport may prevent some trafficking, it may also limit legitimate travel — what if employers need to take their domestic workers overseas, which is common practice?

Combating trafficking in persons is not easy, especially when trafficking crosses borders. Policies to address these problems require comprehensive action to combat the push and pull factors behind exploitation. Policies also require sincere cooperation with destination countries, since trafficking cannot be addressed by one country alone.

Measures to combat labor exploitation should explore prevention of trafficking, protection of victims and prosecution of traffickers. We need policies that ensure only truly qualified and well trained migrant workers are recruited, workers who are empowered and educated about safe migration and what to expect from destination countries. In addition, we should work only with countries that have protection mechanisms in place for migrants and should increase our consular presence to handle trafficking cases. Finally, only countries that consider human trafficking a crime should be allowed to employ our workers.

The single-destination passport runs the risk of appearing to offer protection but falling short. It is not unlike the memorandum of understanding signed between Indonesia and Malaysia in May 2006 that authorized employers to keep the passports of migrant domestic workers. That policy failed to protect migrant workers from abuse because it actually increased their vulnerability.

Government should take a holistic approach to protecting migrant workers. A passport’s function is for identification while abroad. It is not a suit of armor.

Note:
Fitriana Nur is a recipient of the 2010 Australian Leadership Award from Indonesia. Ana is currently completing  a Master of Public Policy and Management at the University of Melbourne in December 2011.  Previously, she worked for the International Organization for Migration (IOM) in Indonesia. This op-ed piece was originally published in Jakarta Globe and has Ana’s permission to be re-posted on Reflective Diplomat. See: (http://www.thejakartaglobe.com/opinion/single-destination-passport-a-misguided-protection-policy/456651)

Overseas Filipino Workers (OFWs): New Heroes

OFW: New Heroes

by Juan “Jed” E.  Dayang, Jr.

The Australian National University

 

 

As of 2010, there is an estimated 8,579,378 Filipinos overseas.[1]   The number of temporary migrant workers or Overseas Filipino Workers (OFW) is estimated at 4,522,438.[2]  With its decades long of experience in labour migration, the Philippines has become the leading labor sending country in East Asia.  The country has also become the principal source of seafarers in the international maritime business.

The economic contribution of overseas Filipinos is substantial. Their remittances sustain their families and contribute to poverty reduction. Although, the remittances may not have a wider contribution to national economic growth, it has definitely improved the lives of many families who benefit from the money flows from their family members who are working overseas. In 2010 their remittance flow was US$18.8M which grew by 8% compared to the previous year. It represented close to 10% of the country’s Gross Domestic Product.[3] For their contribution to the economy, they have been lauded as “modern-day heroes” by the government and by the Philippine media.

Waves of Migration

Migration of Filipino workers has been recorded as early as the Spanish colonization.[4] Early accounts of emigration from the Philippines points to a native who worked in the ship of Portuguese explorer Ferdinand Magellan when he first circumnavigated the world and discovered the Philippines for Spain in the 16th century.  However, the first group of Filipino workers who were recorded to work overseas were those who were forced by Spanish colonizers to man ships during the Manila-Acapulco galleon trade between 1565 to 1815 that brought goods from the Orient to the “new world” and vice versa.[5]  During the Spanish colonial period that ended in 1898, there were Filipinos who went to Spain as students, including national hero Jose Rizal.

First Wave

The 20th century saw more Filipinos leaving for the US as a result of the colonial linkage between the Philippines and the United States which started in after the Philippine-American war (1899-1902) until the Philippine declaration of independence in 1946.   The first wave[6] of emigration of Filipinos was between 1900 to early 1940s to the United States. The first two decades after the US annexation of the Philippines in 1898, many of the Filipinos who went to the US were college and university students who were trained in US universities to spread democracy and take leadership roles in the Philippines.[7]

Second Wave

The second wave to the US began after World War II till the end of the war in Vietnam. It was also during the same period when   the Philippines gained its independence from the US on July 4, 1946.  The number of Filipinos in the US grew because of the naturalization quota of 100 per year which was approved by the US Congress and announced by President Harry Truman on July 4. The quota, which lasted for two decades was not based on ethnic considerations but based on the occupational needs of the US and if the Filipino had relatives in the United States.[8]  At that time, there were many Filipino WWII veterans who were given special US citizenship privileges. The US also accepted skilled workers– doctors, nurses, accountants, engineers and other professions. When the US Congress passed the new Immigration Reform Act in 1965, it allowed family members to reunite with their American based relatives. This again led to the surge of American immigration of Filipinos.

In the 1950s and the 1960s, there were Filipinos in non-professional labour contracts that went to East Asia as barbers, artists, and musicians. There were also Filipinos who went as loggers to Indochina. The Korean and Vietnam War also created overseas jobs for Filipinos particularly in civilian and military operations in Japan, Guam, Thailand, Wake Island and Vietnam. There were also nurses who went to Canada and Australia. The third wave, which is more widely known and most persistent, was during the mid-1970s to 1990s.

Third Wave

It was in the 1970s when the government started sending migrant workers to curb unemployment and to shore up the country’s foreign currency reserves of the government. It was during this period that the labour migration program by the Philippine government was institutionalized.[9] The economic decline due to the higher world prices of crude oil created massive unemployment in the country. In the Middle East, however, the members of the Organization of the Petroleum Exporting Countries (OPEC) were making so much profit. As a result of the oil-export boom, there was a  high demand for labour to support its fresh enterprise.  Former President Ferdinand Marcos  was quick to tap this opportunity to  promote Filipino contract workers to alleviate unemployment that created a huge labour surplus.   The foreign policy that Marcos adopted was called  “Development Diplomacy,” which  was aimed at exporting excess labour supply. By 1980, the Department of Labor and Employment’s (DOLE) deployment of overseas contract workers has jumped by 75% compared to previous year.[10] This time, the Department of Foreign Affairs has made protection of migrant workers as a third pillar of the country’s foreign policy which is of equal significance to the promotion of the political and economic interests of the Philippines overseas.

Conclusion

The Philippines has become the leading labor sending country in East Asia with 10% of its population living and working  in more than 190 countries overseas.  The emigration flows can be summed up in three waves of migration: the first wave from 1900s-1940,  the second from 1940s-1960s  and the most pervasive was during the third wave from 1970s to 1990s. The economic contribution of Overseas Filipino Workers or OFWs have reduced poverty incidence and increased the welfare of their families in the Philippines. The remittance flow also shore up the foreign currency reserves of the country. For the country and their family members, OFWs are real-life heroes.  The Philippine government has made protection of OFWs as a key pillar of its foreign policy agenda.


[1] “Stock Estimate of Overseas Filipinos,” ed. Commission on Filipinos Overseas (Manila: Office of the President, 2010).

[2] Ibid.

[3] “2010 OF Remittances Surpass 8% Growth Projection; Full-Year Level Reaches US$18.8 Billion,”  http://www.bsp.gov.ph/publications/media.asp?id=2515.

[4] read Filomeno V. Aguilar Jr., ed. At Home in the World: Filipinos in Global Migrations (Quezon City: Philippine Migration Research Network and Philippine Social Science Council, 2002).and Joaquin L. Gonzales, Philippine Labour Migration  (Singapore: Institute of Southeast Asian Studies (ISEAS), 1998).

[5] ———, Philippine Labour Migration.

[6]Ibid.

[7] For an earlier work on Filipino migrants to the Unites States see H. Brett Melendy, “Filipinos in the United States,” Pacific Historical Review University of California Press 43, no. 4 (1974).

[8] Ibid.

[9] Gonzales, Philippine Labour Migration.

[10] Graziano Battistella, Philippine labor migration : impact and policy (Quezon City Scalabrini Migration Center, 1992).

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