RP dependence on OFW earnings leads to jobless growth -- recruiter

The government's reliance on the OFWs remittances should be seriously addressed - but HOW?
Maybe, this coming election, voters will become more mature and intelligent.
It is a prayer everybody should have.
...'The recruiter said that one of the “most obvious” symptoms of the Dutch disease has been the continued strengthening of the local peso even when the economy has been “barely” growing...'
RP dependence on OFW earnings leads to jobless growth -- recruiter
By Jerome AningPhilippine Daily Inquirer 22:27:00 03/14/2010
MANILA, Philippines --Awash with dollars from US$18 billion (more than P821 billion) a year in remittances from overseas Filipino workers a year, the Philippine economy could be now afflicted with the “Dutch disease,” an economic malady that sees the decline of local industries, fuels an overvalued peso, makes exports costly and imports cheap, and results in jobless growth, according to recruiters.
Lito Soriano, executive director of the Federated Association of Manpower Exporters, issued the warning in a recent forum on the strong peso and what must be done on the peso-dollar exchange rate concerns of overseas Filipino workers.
“Ironically for the OFWs who are the ones sending the dollar windfall to their families each month, they and their families are the first victims of the economic malady that was first experienced by the Netherlands,” Soriano said in a statement.
Soriano was referring to the term coined by The Economist in 1977 to describe the decline of the manufacturing sector in the Netherlands following the discovery of a large natural gas field in 1959. This culminated in the world's biggest public-private oil industry partnership in 1963.
The Dutch disease is a concept that purportedly explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector. The theory is that an increase in revenues from natural resources will “de-industrialize” a nation’s economy by raising the exchange rate, which makes the manufacturing sector less competitive and public services entangled with business interests.
The concept has since been applied to other types of economic models. In the case of the Philippines, the increase in revenues comes from the OFWs’ remittances.
Soriano, chair of the LBS Recruitment Solutions, said the bloated dollar supply, not earned with private and government investments, would ten to lure decision makers to squander public funds and go into foreign borrowing sprees, confident the country has enough reserves to pay for the foreign loans.
The recruiter said that one of the “most obvious” symptoms of the Dutch disease has been the continued strengthening of the local peso even when the economy has been “barely” growing.
“When an OFW sends $1, 000 to his family today, it’s equivalent to only P45, 000 at P45 to the dollar exchange rate or P5, 000 less than what they got when the dollar was worth P50 in 1997,” he said.
As a “rule of thumb,” the recruiter added, an OFW would not get a raise while on contract for two to three years
The strong peso fueled by OFW money have further punished both the local industries selling to the domestic market and abroad because their costs were much higher than those from countries not suffering from the Dutch disease, Soriano added.
“The decimation of both the domestic industries and export industries has depleted the manpower pool for highly skilled and professional workers that are in the high-end of the deployment industry,” he explained.Soriano added that the OFW deployment industry has suffered from a “shallow pool” of highly trained people that resulted in fewer takers and the increasing deployment of factory workers, maids and entertainers.Citing data from the Philippine Overseas Employment Administration, Soriano said that of the 7.8 million sent to different parts of the world from the year 2001 to 2008, average yearly deployment was 893, 475 people, but close to half of them (47 percent) were rehired land-based workers plus 24 percent returning seafarers.
Newly hired averaged only 29 percent or less than a third, he said.
In 2007, Soriano said POEA figures revealed that among the first-time OFWs, 121, 715 were factory workers, 107,135 were classified as service workers mostly domestics while only 43,225 were professional and technical workers. Another 20, 000 were sent out as sales workers and clerks.
“In 2007, 74 percent of deployed workers were domestics, service and factory workers. Of all the deployed, only 14 percent were new hires,” he pointed out.
Among nurses, Soriano said, only an average of 10, 000 have been getting nursing jobs abroad each year, a “far cry” from the alleged tens of thousands some public officials claim. Most nurses end up without jobs here.He said the “most alarming trend” has been the increasing rate of female workers getting jobs overseas. In the past seven years, he said, 64 percent were female against 36 male and most of them were sent as domestic helpers, entertainers and factory hands.
Soriano said the cure for the Dutch disease would be multi-faceted.
“Taipans should invest in permanent jobs like manufacturing and light industries. There should be a more competitive exchange rate as the peso is overvalued by 20 percent resulting in a lower exchange rate for OFWs,” he said.
Soriano said that government should also admit the existence of the economic phenomenon, adding, “The Bangko Sentral ng Pilipinas is projecting more remittances from OFWs, but how about earnings from other sectors such as the export industry?”

And the future of the Manufacturing Industry in the Philippines is best summed up (and echoed by most thinkers) by a comment below (culled from The Inquirer)
benleano Today at 8:33 am
Manufacturing industry in the Philippines is dead and it is only the service sector which keeps the Philippines alive. Our biggest export are Filipinos and that's where we are good in manufacturing babies for eventual exportation.

Arroyo asked to veto bill amending law on OFWs

Arroyo asked to veto bill amending law on OFWs
03/11/2010 07:39 AM
A number of overseas Filipino workers’ (OFW) groups urged President Gloria Macapagal Arroyo last week to veto amendments to the migrant workers’ law, which they said are anti-OFW particularly the provision on mandatory insurance. In a letter dated March 4, the groups said while the intent of some of the amendments are laudable, the bill amending the Migrant Workers and Overseas Filipinos Act of 1995 or Republic Act 8042 should be vetoed as a whole for several reasons.The groups include members of the Consultative Council on OFWs (CCOFW), or representatives of migrant workers organizations, labor groups, trade unions, seafarers’ organizations, policy and research institutes and individual advocates.The bill’s provision on compulsory insurance, the groups said, applies only to OFWs deployed through recruitment agencies and excludes the majority of Filipino workers whose services were not contracted through agencies.The group said data from the Philippine Overseas Employment Agency (POEA) covering 1990- 2008 show that only an average of 26.6 percent of the total number of OFWs are deployed through recruitment agencies, while the bulk of workers renew their contracts on their own or are hired through government placement or are direct hires. Mandatory insurance should also not be legislated, they argued, saying recruitment or manning agencies must voluntarily insure their workers.“In the case of the seafarers, prior to sailing, they are already enrolled by their employers in a comprehensive insurance policy, together with the vessels they work in. In the final version of the amendatory law, the proposed insurance is extended to seafarers. However, the benefits are far inferior to those enjoyed by seafarers under the current insurance scheme," the groups stated in the letter.The group also questioned the ability of pertinent government agencies to implement the amendments to the law, as they scored the POEA for allegedly failing to curb illegal recruitment as it is tasked to do so under the law. Instead, the groups urge the government to work on forging rights-based labor agreements with receiving countries, which they said will do more in protecting the rights of OFWs. The groups also expressed opposition to the retention of RA 8042’s section 10, which limits money claims of OFWs terminated without due cause to just the equivalent of three months’ salary for every year of the unexpired contract. “[O]n the strength of our conviction that the amendatory law on RA8042, particularly the provision on the compulsory insurance provision and the non-repeal of the particular provision on Section 10 on money claims, will harm, not benefit, our migrant workers, we believe that you (Arroyo) should veto this bill," the groups maintained.The letter has over 40 signatories, including Center for Migrant Advocacy, Akbayan Citizen’s Action Party, Philippine Migrants Rights Watch, Alliance of Progressive Labor, and Focus on the Global South.—Jerrie M. Abella/JV, GMANews.TV

Precautionary Measure from The Philippine Embassy