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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

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Globalization and the Emergence of Consular Diplomacy

Globalization and the Emergence of Consular Diplomacy

by Juan  “Jed” E. Dayang, Jr.

In the context of globalization,  the following observations on  international migration can be made:

  • First, international migration as determined by economic and non-economic factors has become institutionalized;
  • Second, international migration is relevant to to development and security concerns; and
  • Third,  international migration has  increased the linkage between diplomacy and society particularly on  consular services and assistance provided by governments.

Migration has emerged on top of the global political agenda. However, managing migration remains as a big challenge among  origin, transit, and destination countries.  Some of the issues of mutual concern include the protection of migrant workers and how to jointly deal with with forced  and irregular migration.  In the current  environment, international migration is restrictive.

Based on figures from the United Nations (UN), an estimated 214 million people or three percent of the world’s population live outside their countries of birth. This phenomenon has become more prevalent due to the forces of globalization.   It is not surprising that the UN has recognized international migration as a top political agenda of governments.

The implications of international migration to  foreign affairs are two-fold: one is the necessity for greater international migration cooperation and second,  the enhanced role of consular affairs.

The global cooperation in international migration has taken several forms.  For example, the Global Forum on Migration and Development (GFMD) is an emerging platform to discuss migration issues.  The GFMD, however is only a forum among governments and non-state actors to manage international migration.  In  the absence of global governance on migration, countries have undertaken bilateral labour agreements to manage migration and to protect their migrant workers.

Emergence of Consular Diplomacy

In diplomatic scholarship, consular affairs have received little attention from students and academics. They regard consular affairs as dealing with the delivery of public service to citizens rather than management of international relations.

In view of the evolution of the diplomatic and consular practice, scholars like Maiike Okano-Heijmans and Kevin Stringer have noted the emergence of ‘consular diplomacy’.  In their view,  consular function is increasingly becoming a core task of Ministries of Foreign Affairs (MFA). The changing patterns of tourism, trans-boundary crime, terrorism, and natural disasters have increased demand for consular assistance .  For instance, consular function of MFAs were put to the test when Ministries had to deal with the protection of their citizens who were in Tunisia, Egypt, and Libya in the  recent political crisis in the region. Natural disasters such as the recent tsunami that hit Japan also required consular action from governments to locate missing pers0ns and to bring their citizens home safely.

Iver Neumann asserts that “consular work has exploded and the potential tasks are literally infinite.”[1] The benefits of migration to both sending and host countries have prompted governments to increasingly tap labour migrants a for its development and economic aims.

Media has  played a key role in bringing consular assistance to a higher level of attention.  Media  covers cases of distressed citizens and the quality of government assistance to them. The promotion of rights of migrant workers and empowerment of migrant workers have increase their political leverage resulting in higher demands for proactive consular assistance. As a result, higher expectations of citizens for consular services are shaping the way diplomats and consular staff work.

The international landscape has wider implication on the practice of diplomacy and requires governments to adapt. In this respect, embassies and consulates are becoming extensions of ‘city halls’ that provide services to its citizen’s abroad.


[1]Iver Neumann, “Globalisation and Diplomacy,” Working Paper 724(2007).

International Women’s Day: Migrant Women’s Role in Development

HK Victoria Park Philipino Migrant Workers

Image via Wikipedia

International Women’s Day: Migrant Women’s Role in Development

by Juan E. “Jed” Dayang, Jr.

Female migrant workers have contributed greatly to development and poverty alleviation in their countries of origin.

According to the recent   New York Times article  “ women migrants have become a formidable force for development — and for the rise of women in developed countries whose careers depend on affordable child care” in the first 11 years of the 21st century.  Money sent by women migrants to their families through remittances also  “…appear to be more frequent, regular and reliable even in times of crisis.”

Based on the UN Population and Development statistics, 50% of  the 215 million international migrants in 2010  are female. In OECD countries, the percentage of women in skilled work has increased.

An anecdotal study in the case of Ghana yielded interesting data that women migrant workers and women recipients tend to send money for human capital investments such as food, education and  health care while male workers or recipients tend to invest remittances in land and electronics. However, there are still few rigorous studies made on the role of gender in migration according to the Times article.

The impact of remittances vary in different countries. UN Women’s studies in Albania, Dominican Republic, Morocco, and Senegal suggest that  women migrants’ role in remittance sent to their families has contributed to development.  In OECD countries, female African migrant workers sent lower average remittances compared to men due to lower education and income.

Female recipients also had an impact in improving children’s health in Sri Lanka.  In Mexico, females working in informal occupations decreased due to remittances. However, remittances offset the loss of income from female labour force.

Philippine Case

In the Philippines, 2004 statistics  have shown that seven out of ten migrant workers were women. Although, recent 2o11 data shows that the ratio between men and women migrant workers have evened out, Filipina women still comprise a big chunk of emigrants from the Philippines which stands at around 8.7M worldwide. Most Filipina migrant workers are employed in the service sectors as nurses, teachers, caregivers and household workers. The downside of the so called  “feminisation of migration” is the social costs of mothers and wives leaving their children and husbands behind.

Children left behind experience loss of maternal care and may suffer from the lack of attention from absentee mothers. Usually, migrant mothers leave their children with their relatives who substitute  as caregivers using the money the send home.  The positive aspect is that children are provided better material goods and enable them to attend better schools.

Female domestic workers are also vulnerable to abuse from their employers. For instance, several cases of  employers abusing their Filipina household workers are lodged and handled by the Department of Foreign Affairs of the Philippines and their consular officials on a daily basis.

What can governments do?

Some suggestions have been made to improve the plight of female migrants such as the introduction of  legal and social protections for domestic workers (e.g. bilateral agreements of the Philippines with Singapore and Hong Kong case), liberalized entry and exit rules in temporary labour migration through work permits, allowing children visiting their migrant mothers, and lowering remittance fees.

At the end of the day, recognizing the role of women in development and empowerment of women are key factors  in enhancing their contribution to development.

Reference:

http://www.nytimes.com/2011/03/08/world/europe/08iht-ffhelp08.html?_r=2&ref=global-home&pagewanted=all

Perpetuation of International Migration: Theories (part 2)

Perpetuation of International Migration: Theories (part 2)

by Juan “Jed”  E.  Dayang, Jr

International migration will continue to increase.  The incentives on the supply side of international migration flows are particularly strong.  High wage differentials across countries and  cheaper transportation and communication costs have increased incentives for people to move.

According to migration experts Facchini  and Mayda, migration flows are relatively small in scale compared with other dimensions of globalization—such as trade and capital flow.  Why is this so?  Restrictive migration policies of host countries is the answer. However, these policies can not stop  irregular migration as the disequilibrium between supply and demand grows.

The following theories provide an explanation  why international migration perpetuates:

Network Theory

The networks of home country association and family networks, friends and other linkages in host countries make migration easier. Networks, which are sources of information, lower the risk of migration substantially. Family members abroad provide information and financial support to their relatives in their native countries which lowers financial as well as psychological costs of migration.

The first generation of migrants are risk-takers but subsequent migration becomes easier. Networks are extremely important in liberal democracies where policies favour family reunions. Networks provide social capital and contribute to the decline of costs and risk as it expands. With networks, migration flows become less selective and thus, increase the likelihood of greater need for consular assistance.

Cumulative Causation

The supply of migrants creates its own demand. As more migrants do the jobs that are not filled up by locals, the demand for them increases. For instance, the supply of Filipino domestic helpers in Singapore and Hong Kong to expatriates and locals has increased their demand for other households to hire helpers to do child care or domestic chores usually done by wives.

Relative deprivation theory

This theory states that  it is not just that even people who are not really impoverished migrate abroad to compensate for the relative deprivation they feel from a neighbour whose material wealth increased when one family member migrates for work—a case of “keeping up with the Joneses”. One is motivated to migrate seeing that his neighbour is better off because of the remittances. Such awareness  makes him feel poorer. These factors create a culture of migration in communities and eventually takes a life of its own. In the Philippines, the culture of migration persists.

Migration System Theory

Migration flows acquire stability and structure overtime. What was intended to be a temporary labour migration for Filipinos in the 70s to decrease unemployment and increase foreign currency inflows to the country has become permanent.

Due to the requirement of protecting and regulating labour migration, the Philippine government has established the Philippine Overseas Employment Agency (POEA) to manage and regulate recruitment. It has also established the Overseas Workers Welfare Administration (OWWA) and increased the number of Labour Attaches posted overseas.

Bilateral labour agreements and international cooperation in labour migration have made international migration more stable and institutionalized by establishing core destinations from single and multiple sources. Saudi Arabia is one example of a core destination for Filipino construction workers and engineers in the 70s and for healthcare workers in the 2000s.

Unilateral cooperation such as South Korea’s Employment Permit System has stabilized labour migration from specific countries such as the Philippines, Thailand, Indonesia, Bangladesh, Mongolia, etc.

Lobby groups and public opinion

Both pro and anti-immigration interest groups play a statistically significant and economically relevant role in shaping migration across sectors. Barriers to migration are higher in sectors where (anti-immigration) labour unions are significant in numbers and influence and lower in those sectors in which (pro-immigration) business lobbies more powerful.

Institutional theory

A range of institutions benefits from international migration including  capitalists and entrepreneurs who make a profit from migration, humanitarian groups (some of them with clout), and recruiters who engage in legal migration. Underground, smugglers and traffickers also make a lucrative profit from migration.

Douglas Massey argued that migration would continue regardless of the restrictions imposed by host countries and that low migration rates were artificial. He also added that the abovementioned theories indicate that migration flows would be unabated and that countries of origin were not working on restricting migration; instead labour-sending countries helped perpetuate it by making it easier for their citizens to migrate.

As international migration continues to grow, Ministries of Foreign Affairs (MFAs) as well as diplomatic and consular officials need to adapt to the demands of its citizens overseas.   In future  blog feeds, I will discuss why consular affairs has become a core task of MFAs.

References

Lecture by Prof. Susan Martin attended by author in the course entitled “Global Trends in International Migration” organized by the  Institute for the Study of International Migration of the Edmund A. Walsh School of Foreign Service, Georgetown University from 19-22 October 2010 in Washington D.C.

Joaquin Arango Douglas S. Massey, Graeme Hugo, Ali Kouaouci, Adela Pellegrino,J. Edward Taylor, “Theories of International Migration: A Review and Appraisal,” Population and Development Review 19, no. 3 (1993).

Giovanni Facchini and Anna Maria Mayda, “From Attitudes Towards Immigration to Immigration Policy Outcomes: Does Public Opinion Rule?,” VOX, no. 21 June 2008 (2008), http://www.voxeu.org/index.php?q=node/1247.

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