Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts

Volume 2, Number 50              January 26 - February 1, 2003            Quezon City, Philippines

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Who Profits from the Brain Drain? 
The Philippine Labor Export Policy 

When caregivers, nurses and other professionals begin sending dollar remittances to the Philippines, nobody can be happier than the Philippine government and banks which aggressively devise ways to have these remittances filling up their coffers.

By Ely Manalansan
PMC Reports/Reposted by Bulatlat.com

A nurse or other professional in the Philippines intent on becoming a nurse or a caregiver as a stepping stone toward migration either in the U.S., Canada, or Europe must spend more than P100,000. And that’s just initial.

Half the amount will go to the job placement agency, while the rest will be divided for air fare, embassy interview, medical expenses, as well as technical courses and tests either for a caregiver or a nurse.

While most Filipinos don’t mind the expenses as long as they are guaranteed immediate employment abroad, it is also true that certain sectors of the economy, both in the sending and receiving country, are able to get a killing out of the migration of Filipino professionals.

And when these professionals begin sending dollar remittances to the Philippines, nobody can be happier than the Philippine government and banks that aggressively devise ways to have these remittances filling up their coffers.

Heroes of the economy

With total cumulative migration of Filipinos estimated at 10 million, and with an estimated 2,700 Filipinos leaving daily to work abroad, the yearly dollar remittances of migrant workers have grown from $5.74 billion in 1997 to $6 billion last year. In 1998, it reached $7.38 billion, data from Bangko Sentral ng Pilipinas (BSP – Central Bank of the Philippines) shows.

This year, the dollar remittances of overseas Filipinos are projected to go even higher. As of June, dollar remittances of Filipinos abroad were already pegged at $4.14 billion, $1.25 billion higher than the $2.89 billion recorded in June 2001.

From 1990 to 2001, Filipino migrants remitted a total of $50 billion through the formal banking system. Between 1990 and 2000, remittances made up 5.2 percent of the country’s gross national product.

The sheer magnitude of the official dollar remittances of migrant Filipinos, says IBON Foundation research director Antonio Tujan Jr., has somewhat ended the country’s severe Balance of Payments (BoP) crisis of the 1980s. This is not yet even including remittances that were not sent through banks which the BSP estimated in 1996 to be about 58 percent of total remittances.

While questioning the government policy in including dollar remittances to the current account of the country’s BoP, the Asia Pacific Mission for Migrant Filipinos (APMMF) admits that dollar remittances have helped facilitate and finance trade.

Likening remittances to short-term capital trade financing, the APMMF, in a primer The Role and Process of Remittances in the Labor Export Industry in the Philippines, says recorded earnings in the BoP (through remittances) “cushioned the impacts of deficits in the trade balance and non-merchandise trade balance.”

“Analysis of trade data shows that (overseas) workers’ earnings do finance imports by as much as 80 percent of remittances through formal channels,” notes the APMMF primer.

Likewise, it adds that remittances find their way into the government’s Gross International Reserves (GIR). In May 1998, cites the primer, the BSP’s GIR stood at $10.9 billion, 24 percent higher than the year ago level, largely on account of remittances which increased by 0.6 percent from January to March in the same year.

Tujan Jr. contends that dollar remittances also help the national government finance the country’s debt service, which averages at $5 billion annually.

Recognizing the significant contribution to the economy of migrant Filipinos, the Philippine government has time and again praised them as “modern day heroes.” Indeed, their dollar remittances are able to save an otherwise cascading economy in more ways than one.

No trickle-down effect

On a micro-economic level, the APMMF primer adds, remittances also buoy the domestic economy via expenditures, real assets acquired and small businesses set up.

But researches by two La Salle University professors seem to indicate a skewed if not altogether negligent contribution to the ground economy of overseas remittances.

One of the researchers, Prof. Stella Go, says that instead of spreading the economic benefits of labor migration, labor exportation “appears to have contributed instead to the long existing problem of inequality in Philippine society.”

In a Manila forum last November, Go cited Family Income and Expenditure surveys in the last decade which show that a larger proportion of families in the rich regions of the country reported income from abroad as major source of income. Most of these families are urban families.

“The wealthier the families, the greater the likelihood that their main source of income comes from foreign exchange remittances,” Go says.

Go’s findings were shared by Tereso Tullao, who expressed apprehension that the country may in fact be losing out, in terms of opportunity costs, to the brain drain accompanying labor migration.

He says: “The loss of educated manpower through brain drain, the various social ills resulting from overseas employment may not be fully compensated by the foreign exchange remittances brought into the economy.”

Labor export policy

While denying that a labor export policy is in place, the Philippine government cannot deny that overseas Filipino workers (OFWs) already play a major role in the economy. And it is by and large the result of three decades of aggressively marketing Philippine labor abroad that started during the Marcos dictatorship.

President Gloria Macapagal-Arroyo came as close to admitting this policy when she advised an OFW in a televised telephone conversation to stay and find work abroad.

“Jobs here are difficult to find and we are depending on the people outside the country. If you can find work there, and send money to your relatives here, then perhaps you should stay there,” Arroyo said recently.

Arroyo’s words to that OFW, says the APMMF, are an indirect admission that the government indeed has a labor export policy.

Both APMMF and Tujan cite as proof to this policy the role played by the Philippine Overseas Employment Administration (POEA).

“In order that the dollar flow (of remittances) remains unimpeded,” APMMF notes, the Philippine government has designated the POEA and its labor attaches abroad “to actively market” Philippine labor export.

Tujan, on the other hand, says the POEA has become an effective partner of private agencies in promoting Philippine migrant labor and developing business opportunities for labor recruiters, while earning “billions of pesos from fees, insurance and membership dues.”

“A particular reason for the Philippines’ preeminence as a sending country in the past two decades can be traced to the labor export policy of the government starting with the Marcos dictatorship which in the late ‘70s consciously promoted the policy of labor export and established the POEA in order to promote migrant labor, as well as develop partnerships with and regulate private placement agencies in order to expand Philippine labor market abroad,” writes Tujan.

“This policy has an avowed objective of earning foreign exchange and easing the unemployment situation,” he adds.

Migrant labor is cheap labor

On the other hand, professional Filipino nurses working either as caregivers in Canada or as healthcare assistants in the United Kingdom complain of being discriminated in their salary compared with their counterparts in their host country.

Actually, according to Tujan, industrialized countries that employ them also often benefit from their employment by way of cheap wages.

“Migrant wages are depressed because employers utilize the combination of discrimination, oppressive hiring and working conditions, effect of wage differentials in the sending and host countries, and social and cultural differences,” Tujan says.

“In this sense,” he explains further, the discrimination suffered by migrants “is not just tolerated but actually enhanced because it assures cheap wages and reduces the cost of services in industrialized countries.”

Plugging the drain

The impact of the brain drain in the Philippines remains largely undetermined, says Tujan.

He, however, points to a “worrisome trend,” citing statistical records of the Professional Regulation Commission which show an annual reduction in registered nurses in the country from 27,272 in 1995 to only 5,874 in 2000, despite the number of nursing graduates dipping only by a little more than 10 percent.

Summing up the impact of the brain drain in the Philippines, Tujan says: “Deskilling is not just the sacrifice in terms of professional integrity and pride of the migrant worker or the professional challenge and development that work should provide.

“Deskilling becomes more obscene in the context of the brain drain where professionals are lost from developing countries in dire need of their precious services only to be lost forever as they end up working as aides and domestics in the affluent countries.”

Plugging the drain, however, would have to take more than just repealing the undeclared labor export policy of the government.

The solution, says HEAD president Dr. Jojo Carabeo, “lies in changing the system of Philippine society.” With Miriam Anzurin, PMC Reports/Reposted by Bulatlat.com

First Part: Brain Drain Refrain

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