Diasporic Dividend (PIDS)

What's Inside

Editor's Notes

Vol. XXVI No.5 September - October 2008 ISSN 0115-9097

P H I L I P P I N E

I N S T I T U T E F O R

D E V E L O P M E N T

S T U D I E S

Surian sa mga Pag-aaral Pangkaunlaran ng Pi l ip inas

DEVELOPMENTDEVELOPMENTDEVELOPMENTDEVELOPMENTDEVELOPMENTRESEARCH NEWSRESEARCH NEWSRESEARCH NEWSRESEARCH NEWSRESEARCH NEWS

5 Capturing the dynamics of internationalmigration through research and data

9 Measuring the social costs of migration

11 Taking stock of Filipinos abroad and theremittances they send

13 OFWs as philanthropists?

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Working overseas is perceived as a personaldecision of individuals who wanted to seekbetter opportunities for themselves and fortheir families. Eventually, it has become aphenomenon that we now refer to as theFilipino diaspora.

As reported, there are currently more thanfour million overseas workers around theworld forming a breed of "modern day he-roes" owing to the significant impact thatthe continuous flow of their remittanceshave on our economy. At the other end ofthe coin, so to speak, is the impact thatthe diaspora is making on the quality of lifeof the families left behind by the overseasworkers.

International migration as a developmentconcern took center stage in this year's ob-servance of the 6th Development Policy Re-search Month (DPRM). The DPRM, which wasinitiated primarily to promote policy re-search and the critical role it plays indecisionmaking, provided the perfect op-portunity for stakeholders to discuss theimplications of international migration notonly in the context of economic gains butmore importantly, on the social level. How

Much has been said about how remittances sent by Overseas Fili-pino Workers (OFWs) have helped their families attain comfort-able lives that would not have been possible had they stayed in the

country. OFWs are heralded, too, as “Modern Day Heroes” because theirremittances save the Philippines from further economic slump.

In a speech titled “Maximizing the Philippine Diasporic Dividend” basedon a study with the same title authored by Dr. Fernando Aldaba and Prof.Jeremaiah Opiniano, chairperson of the Department of Economics, Schoolof Social Sciences, Ateneo de Manila University and executive director ofthe Institute for Migration and Development, respectively, remittances aresaid to be the only bright spot in the Philippines right now as shown fromsurveys on globalization. However, it was also pointed out that there areother opportunities aside from remittances that can provide migration gains.These are skills and technology transfer, network and market access, andpolitical bonus.

The speech presented at the conference on “Managing the DevelopmentImpact of International Migration” in celebration of the 6th DevelopmentPolicy Research Month (DPRM) on September 23, 2008 at the NEDA saMakati Building expounded on the link between international migrationand the development issues at the macroeconomic level.

Primarily, remittances are maximized through consumption, with OFWsspending on housing, clothes, household appliances and mobile phones,among others. With Filipinos giving premium to education, a huge portionof the money sent home are allocated to education. This investment in

The Philippinediasporic dividend:for the OFWs, their families,

and the country

DEVELOPMENT RESEARCH NEWS September - October 20082

human capital, indeed, is seen as an advan-tage for the families and the country in or-der to produce highly educated and skilledpopulation needed to strengthen labor pro-ductivity.

In addition, OFWs have engaged in prod-uct investments, particularly in savings, aswell as low-to-high risk financial market in-struments, real estate, and even in tryingtheir skills in actual entrepreneurial activi-ties. Government intervention in the formof financial literacy for OFWs and their fami-lies would greatly assist them arrive at in-formed decisions. Moreover, the governmentis enjoined to provide incentives to thosewho have embarked on said investments inorder to create a sound business environ-ment that is crucial in generating jobs.

Remittances have also found their way inhelping not only the OFWs’ immediate fami-lies but also the OFWs' hometown commu-nities through their philanthropic contribu-tions. As such, OFWs have been known tosupport the basic social services, physical,and human capital needs of their rural folks.

“Brain gain” or skills and technology trans-fer, meanwhile, has its own share of debatein the effects of international migration.Thousands of Filipinos leave everyday com-

pounding the “brain drain” scenario preva-lent in the country. To counter this, the Phil-ippines can make use of the knowledge,business acumen, and skills that overseasFilipinos have learned abroad. With theirdesire to return home, brain gain can be thesilver lining in the Philippine internationalmigration picture.

According to Aldaba, also the current presi-dent of the Philippine Economic Society, this“patriotic investment” can be put into realityby forming nongovernment organizationsand hometown associations that will be sup-ported and guided by professionals andskilled workers who have decided to makethe Philippines their home again.

OFWs are also considered as the Philippines’“ambassadors” across the globe. If they canbe utilized to take advantage of their widenetworks and market access, these migrantworkers will be effective promoters of Phil-ippine local products and services. Sectorsthat may highly benefit are garments, pro-cessed foods, furniture, information technol-ogy, and business processing services.

Developed countries where Filipino work-ers are located have also been the source ofawareness for OFWs on how responsible lead-ers should run their nations and serve theirpeople. This exposure may be able to plantsome seeds of hope that the same develop-ment in their host countries may also occurin the Philippines.

However, this can only materialize throughproper selection of public servants. Reform-minded OFWs can influence their familiesback home to choose worthy leaders. Indeed,this is aptly called “political bonus” for theFilipinos.

Where are the gains?First and foremost, remittances may be cen-tral to OFWs, their families, and the country,but there is a weak link between remittancesand investment in the country, according toOpiniano, also an Assistant Professor at theUniversity of Santo Tomas.

He added that remittances have not beendirected to create an environment condu-cive to attract investors, either foreign or lo-

Filipinos give premium to education; that is why a huge portion of theremittances sent home are allocated for the education of children.

DEVELOPMENT RESEARCH NEWS 3 September - October

cal, to the country, example of which is theestablishment of infrastructures vital to busi-ness. Thus, aggravated by higher cost of liv-ing, low wages, and political instability, inter-national migration has continued to prolif-erate.

The crucial eight sectorsPotential gains from international migrationare still elusive and can only be achievedthrough the necessary attention and actionof the government, especially in eight criti-cal sectors.

At the top of the eight sectors is agriculturethat provides income to majority of the ruralpopulation. Data have shown that 2/3 ofOFWs come from the countryside which thusbecome automatic recipients of huge remit-tances. However, property rights issues havehindered the use of remittances in the farm-land. Hence, many of the residents have in-stead looked at overseas migration as a moreprofitable choice than to stick to rural jobs.

Migrant workers consciously put their moneyto education and health. Ironically, with thelack of employment opportunities in thecountry, their sons or daughters who couldhave been part of the educated and skilledlabor force crucial to achieve a stronger eco-nomic environment for the Philippines aredriven out to work abroad.

On the other hand, health issues involve boththe OFWs and their families. There are man-dated government agencies that providethese health services. But in the case of theOFWs, not all are members of the Social Se-curity System and Philhealth nor are theysatisfied with the services they can avail fromthe Overseas Workers Welfare Administra-tion (OWWA). Instead, the OFWs hold onto their money as their own insurance if andwhen the need arises.

In light of the difficulties in the agriculture,education and health sectors, Aldaba andOpiniano shared some triumphant storiesof OFWs, OFW groups, and associations thatsupported the said three sectors and wereable to reap excellent rewards. This provesthat the OFWs’ supported advocacies withinor outside their own communities do createdevelopment.

Infrastructure and social developmentprojects are other avenues for the philan-thropic activities of OFWs. Through dona-tions from migrant workers, public parks,school buildings, and hospitals have beenbuilt in their hometowns.

Financial markets are also creating for them-selves the impression of a wise and securechoice of investments for OFWs. Yet, whilethere are a number of financial literacy ac-tivities available for them and their families,OFWs hold back due to their lack of busi-ness skills and dislike of the risk involved inthe financial markets. Meanwhile, correctlyaddressing these issues may be able topresent solid economic grounds for OFWsand their families to be financially indepen-dent. They would be released from theirdependency in remittances, and in the long-run, from international migration.

Completing the eight sectors are the infor-mation and communication technology andtourism sectors. Opiniano mentioned thatUS-based “technopreneurs” are beingtapped to bring IT investments to the coun-try. The tourism sector is another spot thatwould benefit from the OFWs’ linkages. In-deed, there are more beaches, islands, andother interesting places waiting to be discov-ered. The hospitality industry as service pro-vider for the needs of the tourists will like-

Knowing the welfare, rights, and conditions of overseas Filipinosand their families is key to maximize the Philippine diasporicdividend.

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wise benefit from the would-be influx of tour-ists to the country.

But there are limitations...Working abroad is a gamble every Filipinomigrant worker needs to play in order to winand reap his rewards. Still, there are circum-stances that challenge his ultimate victory(win-win solution).

High costs of remittances have persisted, cut-ting 10–20 percent from the total remit-tances. A number of recommendations wereraised by Aldaba and Opiniano, such as: (a)let remittance services be a self-standingcompetitive industry distinct from bankingservices; (b) let grassroots financial institu-tions such as cooperatives, rural and thriftbanks, and microfinance institutions accessmigrants’ remittances to improve competi-tion and reduce costs; (c) find ways for the900, 000 undocumented Filipinos to accessformal financial institutions and remittancechannels; and (d) undertake bilateral ini-tiatives to establish greater access to remit-ting countries’ financial markets for Philip-pine banks and banking products to encour-age more formal remittances.

There are also concerns on the insufficientincentives for return migration. Many return-ees have immediately found their way backabroad after realizing there are no work op-portunities for them in the Philippines. Nowis the perfect time for the business sector togive returning migrant workers access tocredit, Aldaba and Opiniano recommended.

Labor Assistant Secretary Ma. Teresa Sorianosaid that the government reintegration pro-grams complete the OFWs socioeconomicrights. Personal, economic, even spiritualreintegration programs are available for re-turnees, she added.

It has always been reiterated how OFWs givehigh importance to education. But with thedeteriorating quality of education due toweak budgetary support from the govern-ment, those who are left behind may lack thecapability to perform their tasks and duties.Thereupon, OFWs are sometimes discour-aged from further investing in education dueto its low quality.

Coordination failure in rural developmentand agriculture will hinder the possiblegains from migration, which for years havesuffered because of scant investment. Thereis a need to address property rights issues,financial access, and infrastructure, as wellas agrarian and asset reform to revive thecountryside.

More importantly, Opiniano called for anexplicit policy on international migration.He added that the “explicit” migrationpolicy would outline migration as a comple-mentary resource and not as the primaryoption for development. It will mirror thecomprehensive framework and policy onoverseas migration and its role in thecountry’s development.

This policy should include a safer labor mar-ket that offers high wages to migrant work-ers, government agencies having efficientand systematic efforts to protect and upholdtheir rights, and creating programs and in-centives that would channel OFWs’ re-sources to the benefit of the migrant work-ers and their communities.

C o n c l u s i o nThe state of Philippine society reflects thedependence on international migration andremittances for development. To maximizethe development impact of internationalmigration, focus must be on the OFWs whoare the country’s most important develop-ment assets.

More than sending remittances, migrantworkers play a big role in promoting invest-ments, skills and technology transfer, andpolitical maturity to the country. Thesediasporic dividend can likewise pave the wayfor overseas migration to be the catalyst inlooking at overseas migration as an optionand not a need for personal and profes-sional growth.

More importantly, maximizing the develop-ment impact of international migration callsfor a comprehensive migration plan thatwould protect the rights of OFWs and helpchannel their resources to economic and so-cial programs that would result to an encom-passing development for all.CSM


In 2007, the Bangko Sentral ng Pilipinas(BSP) disclosed that Overseas FilipinoWorkers (OFWs) sent a total of US$ 14.4

billion in remittances equivalent to almost10 percent of the country’s Gross NationalProduct (GNP). Recent statistics also showedthat Filipinos abroad reached 8.7 million,with OFWs comprising about 47 percent andpermanent migrants, 42 percent. The hugeamount of remittances—that steadily in-creases through the years—kept the coun-try afloat amidst persistent economic prob-lems.

As such, migration is synonymous to remit-tances and one cannot be discussed withoutthe other, specifically in the Philippine con-text. Remittances to families left behindmade it possible for OFWs to own a house,send their children to private schools, andother resemblance of economic benefits.

While Philippine Institute for DevelopmentStudies (PIDS) President Josef Yap recog-nized the invaluable contribution of OFWs’remittances to the country’s growth, he like-wise mentioned the social effects on the fami-lies left behind. He cited a UNICEF-com-missioned study by Rosemarie Edillon on“The Effects of Parents’ Migration on theRights of Children Left Behind,” whichshowed that long-term absence of one orboth parents resulted in having children whoare more emotionally troubled compared tochildren who enjoy the company of theirparents.

He also noted that any discussion on inter-national migration should likewise try toaddress statistical gaps from various govern-ment agencies in order to come up with asolid basis in crafting policy research. Thus,in celebration of the 6th Development PolicyResearch Month (DPRM), the PIDS focused

Capturing the dynamics of internationalmigration through research and data

on the vital role migration plays in the livesof Filipinos and of the country as well. TheInstitute is lead agency designated to leadand coordinate the annual observance of theDPRM. As per Malacañang Proclamation No247, the month of September of every year isdeclared as DPRM to highlight the impor-tant role of research in policy formulation.

This year’s theme “Managing the Develop-ment Impact of International Migration”seeks to find the balance between the costand benefits of international migration. Theconference held on September 23, 2008 atthe Romulo Hall of the National Economicand Development Authority (NEDA) Bldg,

Highlighting the month-long celebration of the 6th Development PolicyResearch Month is a conference on "Managing the Development Impactof International Migration"held in Makati City. Photo shows PhilippineInstitute for Development Studies (PIDS) Senior Research Fellow Dr.Aniceto C. Orbeta Jr entertaining questions from participants duringthe open forum. With him (from L to R) are Institute of Migration andDevelopment Issues Executive Director Prof. Jeremaiah Opiniano; PIDSPresident Dr. Josef T. Yap; Department of Labor and Employment Assis-tant Secretary Hon. Ma. Teresa Soriano; and Ateneo de Manila Univer-sity-Department of Economics Chair Dr. Fernando Aldaba.


Makati City, served as the avenue for distin-guished guests from the government, aca-deme, nongovernment organizations, andprivate sector to propose better developmentobjectives at the macro and micro levels. Italso sought to recommend solutions on howto bridge the gap between conflicting datagenerated from various agencies.

The first session “International Migrationand Development at the Macro Level”stressed the issues involved in relation tointernational migration and development.Dr. Fernando Aldaba, chair of the Econom-ics Department, Ateneo de Manila Univer-sity and president of the Philippine Eco-nomic Society, and Prof. JeremaiahOpiniano, Executive Director, Institute ofMigration and Development Issues, tackledthe overall effects of remittances to thecountry’s economy in their paper “The Phil-ippine Diasporic Dividend: Maximizing theDevelopment Potentials of International Mi-gration.” They also discussed the possibilityof using the skills of OFWs in creating busi-nesses in their home provinces as well as shar-ing the knowledge they have learned fromtheir foreign jobs.

In Session 2: “International Migration andDevelopment at the Household/Commu-nity Level,” Dr. Fabio Baggio, director ofScalabrini Migration Center (SMC), sharedthe study that the center conducted whichindicated that broken or double families arebecoming more of a reality due lonelinessand economic problems of OFWs.

The study titled “Factoring in the Social Di-mensions of International Labor Migration:The Philippine Experience” also high-lighted the dependence on remittances ofOFW families. Because of this, other familymembers have lost interest in finding a jobto help augment family income. Moreover,migration mentality or the culture of migra-tion is now the norm with children of OFWs,seeing migration as the only chance ofachieving personal and professional growth.

Dr. Baggio, however, surmised that social costis a new topic in the research and policyagenda and still lacks adequate scientificstudies. This is where statistical data play acrucial role in providing quantitative vari-

ables that would give credibility to the socialcost(s) of migration, particularly on the nega-tive effects.

In Session 3: “Data on International Migra-tion and Remittances,” representatives fromthe Commission on Filipinos Overseas(CFO), Atty. Golda Roma, acting deputy ex-ecutive; Philippine Overseas EmploymentAdministration(POEA)-Planning BranchDir. Helen Barayuga; Department of Eco-nomic Statistics, Bangko Sentral ng Pilipinas(BSP) Deputy Director Rosabel Guerrero;and National Statistics Office (NSO), DeputyAdministrator Monina Collado, explainedhow their respective agencies generate andprocess data.

Stock estimates of Filipinos overseas are gen-erated by the CFO encompassing permanentmigrants, their children, and the OFWs. ThePOEA data, on the other hand, come fromthe deployment of OFWs and are classifiedby type of hiring; major world group; and topdestinations. For the seafarers, data are com-posed of deployment of seafarers by flag ofregistry; skills; and vessel types, among oth-ers.

The BSP, for its part, deals with records ofremittances in the country’s Balance of Pay-ment (BOP). It is also the agency mandatedto compile and release BOP data. And theNSO conducts the Survey of Overseas Filipi-nos (SOF) as a rider to the Labor Force Sur-vey.

Indeed, said government agencies acknowl-edge the need to harmonize their data inorder to provide accurate, consistent, andtimely data fundamental to policy analysisand formulation.

As remittances are part and parcel of inter-national migration, starting from personalconsumption to investments, another areaof use for remittances in the form of philan-thropic activities is slowly being introducedas an option where remittances can be put toan advantage.

This was the focus of Session 4: “Alternativesfor making the most out of remittances”where presentor Guillermo Luz, executivevice president of Ayala Foundation, intro-


* Read by Undersecretary Rosalinda D. Baldoz during the Conference on Managing the Development Impact ofInternational Migration held on September 23, 2008 at the Romulo Hall of the NEDA sa Makati Building inMakati City.

duced the Ayala Foundation USA initiativethat was organized as a public charity in theUnited States of America in the year 2000and which focuses on Filipinos in America.

The foundation aims to be the link for theseFilipinos to support various social projectsin the Philippines. Primarily, the Ayala Foun-dation USA facilitates projects in educationand training; social welfare; pastoral minis-tries; enterprise development; health; artsand culture; and environment.

Valuable ideas and insights were also im-parted by the knowledgeable discussantsnamely, Department of Labor and Employ-ment Assistant Secretary Ma. Teresa Soriano;Professor of Sociology from the University of

the Philippines and PIDS Board of TrusteesMember, Dr. Ma. Cynthia Rose Bautista; PIDSSenior Research Fellow, Dr. Aniceto C.Orbeta, Jr.; Microfinance Consultant Dr. MaPiedad Galias; and CFO Chief, ImmigrationServices Office, Maria Regina Galias.

Department of Labor and Employment Sec-retary Marianito Roque’s closing remarks(see full text of Secretary Roque’s speech inthe accompanying Box), as read byUndersecretary Rosalinda Baldoza, reiteratesthe central role of policy research in the areaof international migration. This, of course,according to Sec. Roque, should be comple-mented by accurate data and research toolsin order to craft improved migration poli-cies that would be responsive to the needs ofthe OFWs.CSM

Box 1. Closing Remarks of Hon Marianito Roque, Secretary, Department of Labor andEmployment

At the outset, allow me to com-mend the Philippine Institutefor Development Studies for orga-

nizing this conference, with a very timelytheme, “Managing the Development Im-pact of International Migration.” It is trulymy pleasure to join you in the celebrationof your founding anniversary and the De-velopment Policy Research Month.

Through the years, the Institute has beendoing an excellent job in implementinga research program that is of major influ-ence to our national development plansand policies. It continues to undertakecomprehensive researches and studies onareas that practically affect our social andeconomic well-being. I am glad that thistime, it brings to the table the nexus be-tween development and international mi-gration as subject of national discussion.

With the presentations and intellectualviews expressed throughout the day, it isclear to us now that international migra-tion, indeed, has taken a life of its own. Ithas become a buzzword not only in the

domestic front but also in the global com-munity. From Asia to Europe, Africa toAmerica, migration and developmenthave become a legitimate topic in manysocial dialogues among world leaders andpolicymakers.

Proof to this is the forthcoming 2nd GlobalForum on Migration and Development,which will be held next month here inthe Philippines. This will bring togetherin one conversation senior leaders fromall over the world to discuss the multidi-mensional aspects, opportunities, andchallenges of international migration.

Today's conference actually makes a goodprelude to the Global Forum. I was in-formed that the discussions had beenlively and insightful. There is all the morereason to be insightful because your viewsand ideas could be heard all over the word.Those are rich inputs to the Global Fo-rum which seeks to foster among differ-ent nations ways of harnessing the devel-opment potentials of international migra-tion.

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Data research: vital tools in policymakingI am impressed because we are ahead ofthe conversations. While foreign partici-pants are still underway to the conference,here we have already talked about migra-tion through a research-oriented activity.On occasions like this, we should com-mend researchers for being passionateenough to explore and express ideas thataffect the different aspects of life, includ-ing migration for work. Researchers aredeemed catalyst of change; they define thecourse of our national development goalsand agenda through research.

As we all know, researches are best toolsfor unearthing new sets of ideas and op-portunities. These are effective mecha-nisms for discovering wider perspectivesand finding solutions to problems in therapidly changing world. And in this erawherein migration has become a naturalphenomenon, data and research tools areequally important for us to capture anddetermine the dynamics of internationalmigration.

Through data and research tools, we getto recognize the contribution of overseasFilipino workers to our economy throughdollar remittances, which according toCentral Bank has surged to 9.6 US billiondollars in the first seven months of thisyear. We get to know the impact of migra-tion on the home communities of the mi-grant workers. We get to document the link-ages between diaspora and development.

Challenges in data and research toolsIt is true that considerable amount of workhas been done to strengthen data and re-search tools necessary for policymaking.However, as emphasized by the Friends ofthe Forum, the governing Board of the Glo-bal Forum, there remains a number of is-sues and challenges and there is stillmuch work to be done.

First, challenges in strengthening datagathering. Some have expressed concernsover the assumption that efforts to improvemigration data may be out of focus. Instead

of focusing too much on improving dataon remittances, maybe we could shift tofocusing on improving data on migrantworkers and migration flows.

Second, challenges in strengthening im-pact assessment. There have been anec-dotal evidences showing the connectionbetween migration and development, butthese have never been assessed extensively.We need to work on strengthening themechanisms for assessing the develop-ment impact of international migration onour country.

And last, challenges in strengtheningpolicy assessment. While we recognize thelinkage between international migrationand development, it requires us to recog-nize migration policies too. We need toassess our migration policies in terms ofefficiency and responsiveness to the dy-namics of the global economy.

ConclusionThose are just three of the challenges thatpolicymakers and researchers need tolook into. Actions are needed because weall know that quality data and research toolsare vital in enhancing our migration anddevelopment policies.

Rest assured that we at the Department ofLabor and Employment will continue tosupport and give importance to research-related undertakings, as we believe thatthere are a lot more to discover, a lot moreto explore, and a lot more to improve onin our migration policies, programs, andapproaches.

In closing, I would like to congratulate thepaper presentors, discussants and partici-pants who shared their knowledge and ex-pertise on international migration. I amconfident that the sharing and exchangeof ideas throughout the day will shape acommon vision among us to set the rightdirection towards improving our migrationand development policies. It is indeed mypleasure to bring this conference to a close.Thank you very much!


The second session of the conferenceon Managing the Development Im-pact of International Migration in cel-

ebration of the 6th Development Policy Re-search Month (DPRM) focused on the so-cial effects of international migration— anewly considered topic in the research andpolicy agenda.

At the household level, migration has causedchanges in the image and values of Filipinofamilies through the emergence of“transnational families,” or families withmembers residing separately at differentparts of the world

Dr. Fabio Baggio, director of the ScalabriniMigration Center (SMC), in his presentation“International Migration and Developmentat the Household/Community Level,” re-lated that transnational families are exposedto vulnerabilities due to the absence of oneor both parents, exchange of parental andfamily roles, and other contingent factorssuch as household economy, “machismo,”and gendered roles.

As a result, there is high dependence onextended families and household manage-ment is suffering especially when the motheris the migrant.

The occuerrence of broken and double fami-lies is also noticeably increasing among mi-grant workers. It is said that the traumaticexperience of loneliness and separation fromfamily tend to make migrant workers seekattention and affection from fellow migrantFilipinos. Regardless of the immediate andyet temporarily found acquaintance with fel-low nationals, migrant workers subsequentlyface further economic responsibilities andeven the burden of sustaining more than onefamily.

Measuring the social costs of migration

Sociology Professor Cynthia Bautista of theUniversity of the Philippines also noted thatoverseas workers, especially those who areliving doubles, i.e., with double partners/families, sometimes find it difficult to returnto the Philippines. This may stem from thenew sense of autonomy, or reinvented iden-tity that they experience brought about bytheir having to live on their own abroad dueto migration.

It is also interestingly important to know thesocial costs of migration on the children leftbehind. An SMC national survey in 2003 of1,446 children aged 10-12 years old showedthat (a) children of migrants perform betterin education and in health; (b) they cooper-ate less in household work; (c) they possessmore mobile phones, through which paren-tal control/supervision or “cellphoneparenting” is exercised; and (d) children ofabsent mothers are more affected by migra-tion.

Dr. Baggio added that other studies show thatthe effect of migration is later felt among

The long-term effects of migration parenting on children aresomehow difficult to assess.


children when they could already under-stand and compare their situation with otherchildren. The long-term effects of migrationparenting on children, though, are somehowdifficult to assess.

Prof. Bautista, for her part, agreed that theeffects of migration on children may be diffi-cult to asses. Many studies, for instance, showthat there is no significant negative impactof migration of one or both parents on chil-dren. The 2003 SMC survey, in fact, showsthe resilience of nonmigrant family membersleft behind. However, there are also otherstudies that show that there is an unex-plained gap between children and parentsand a sense of inadequacy among childrenleft behind because of the migration of ei-ther parent.

Consequently, it is observable that financialplanning of families is increasingly becom-ing dependent on the remittances beingsent by migrant members. Lack of participa-tion of the nonmigrant members in the fam-ily sustenance is also becoming an increas-ing phenomenon.

In a sociological viewpoint, the SMC Direc-tor stressed that migration has now becomea “family investment” or investment of ex-tended families. Instead of getting loansfrom banks, migrants usually ask for finan-cial assistance from extended family mem-bers. However, debt that is spent to send afamily member abroad owed from the ex-tended family goes beyond paying the actualdebt. This is because it involves moral com-mitment of being able to offer help to thelending family member whenever the needarises.

At the community/society level, progressiveimpoverishment of the societies of origin isthe primary noticeable cost of migration.Huge state investment on education andsocial assistance are lost with the migrationof skilled “exceptional” workers at their pro-ductive age. Those who migrate, accordingto assumptions of some migration theorists,are usually the best human resources whomay be able to effect change to society.

Dr. Baggio mentioned that brain drain andthe exodus of “experienced” professionals

form part of the progressive impoverishmentof societies of origin and are actual threatsto sustainable development. Although thereis hope that these migrants would return, itdoes not normally happen.

It is also to be noted that the constant migra-tion circle molds into a resilient migrationculture or mentality that greatly affects thenew generation, making them think that mi-gration is the only possible way to gain andachieve personal and professional success.This is reflected in the 2003 SMC study thatreveals that almost 50 percent of the respon-dents have already entertained thoughts towork abroad while 30 percent of Filipinoadults would migrate if given the chance,according to a Pulse Asia Survey in 2006.

The development of migration mentality orculture has become a threat to a sound voca-tional orientation of the youth as decisionson their professional careers are stronglyconditioned by overseas labor market suchas the high demand for nurses, caregivers,and seafarers. Schools and courses offeredare in turn established “ad hoc”, giving littleimportance to the personal and skills incli-nation of the youth. Moreover, there seemsto be little concern for what the countrymight need in the future.

It has likewise been observed that the Phil-ippine “deployment” policy or promotion ofmassive migration seems to be an instant de-velopment strategy for the country. However,the inflow of foreign exchange and remit-tance from migrants cannot negate the realproblem of national development, which canonly be achieved through sound develop-ment policies.

Dr. Baggio stressed that there is a need tolink development and migration policies atthe national and local levels. The migrationand development nexus should not, how-ever, lead us to think of migrant workers as“milking cows.” Instead, national develop-ment should not depend solely on migrantsand their remittances. There is indeed aneed for a policy that would correctly addressthe vicious circle of migration as well as thelack of effective and attractive programs forthe reintegration of returnees.

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Taking stock of Filipinos abroad and theremittances they send

The phenomenon of international mi-gration poses a need for an estab-lished system of capturing informa-

tion that could be used as basis for programplanning and policy formulation. Recogniz-ing this need, the third session of the con-ference on international migration held re-cently in Makati City was devoted to data onmigration and remittances, the methodolo-gies used, and some estimation issues.

Atty. Golda Roma, acting deputy executivedirector of the Commission on FilipinosOverseas (CFO), reported that in 2007,there were an estimated 8.72 million Fili-pino overseas (around 10% of the entirePhilippine population). This covers 192countries in almost all continents. The bulkof the stock, Atty. Roma added, consists oftemporary migrants or the Overseas FilipinoWorkers (OFWs) at 4.13 million (47%). Thenumber of permanent residents was secondhighest at 3.69 million (42%)while the re-maining constituted the 900,000 irregularmigrants. Except for irregular migrants, thenumber of Filipinos overseas has increasedthrough the years (Table 1).

While the CFO conducts registration of alldeparting Filipino immigrants and perma-nent residents abroad as well as Filipino na-tionals who leave the country as spouses, part-ners, or fiancées of foreign nationals, thePhilippine Overseas Employment Adminis-tration (POEA), on the other hand, is spe-cifically tasked to document the OFWs. Interms of deployment destination, the MiddleEast remains the top destination at 60 per-cent followed by Asia (27%); Europe (6%);Americas (4%); and other destinations(3%).

Director Helen Barayuga of the POEA-Plan-ning Branch said that the data that they gen-erate serve as inputs to research, planning

and policy formulation, marketing plans,stock estimate of Filipinos abroad, the sys-tem of national accounts, and estimation oftotal OFW remittances. POEA-generateddata, categorized into landbased andseabased workers, are also being used by theCFO, the Overseas Workers’ Welfare Admin-istration (OWWA), and the PhilippineHealth Insurance Corporation (Philhealth).

Considered as a major source of the country’sforeign exchange, remittances from theOFWs are recorded in the country’s Balanceof Payments (BOPs) which contains the eco-nomic transactions between residents andthe rest of the world for a certain period. TheBangko Sentral ng Pilipinas (BSP) is theagency responsible for the compilation andrelease of BOP statistics.

The remittances data published by the BSPare based on bank reports, the latest of whichcovers January to July of this year amounting

Table 1. Estimated number of Filipinos overseas, in millions

Sources: CFO, DFA, POEA, and other sources

Year

19951996

1997

19981999

2000

20012002

2003

20042005

2006

2007

Permanent

Residents

-1.92

2.15

2.332.48

2.55

2.742.82

2.87

3.193.39

3.56

3.69

Temporary

Residents

-2.71

2.94

2.962.98

2.99

3.053.16

3.39

3.603.65

3.80

4.13

Irregular

Migrants

-1.86

1.88

1.911.83

1.84

1.621.60

1.51

1.300.88

0.87

0.90

Total

6.41

6.496.97

7.20

7.297.38

7.41

7.587.76

8.08

7.928.23

8.72


to US$9.6 billion. In 2007, remittances grewby 13.2 percent to reach US$14.5 billion. Therobust inflows, according to the BSP report,resulted from continued demand for OFWsand improved delivery of financial services.

It should be noted that the reported figurecorresponds only to cash remittances whichpassed through the banks. As Acting DeputyDirector Rosabel Guerrero of the BSP De-partment of Economics and Statistics empha-sized, there are a lot of remittances that donot pass through the banks—these arebrought home by the workers themselves orsent through relatives or friends—called theinformal channels.

To account for the amount coursed throughthe informal channels, the BSP uses a rais-ing factor based on the Survey of OverseasFilipinos (SOF). Conducted by the NationalStatistics Office (NSO), the SOF is an an-nual, nationwide survey that gathers infor-mation on Filipino citizens who left forabroad in the 5-year period prior to surveydate including how remittances are sent tothe family left behind.

Deputy Administrator Monina Collado ofthe NSO related that said information areused by the BSP in accounting for the remit-tances sent through the informal channels.The SOF estimates that in 2007, the 1.75million OFWs sent an amount of Php110 bil-lion worth of remittances.

Reconciling different figures from differentdata-generating agencies (as seen in the vary-ing figures of the CFO, BSP, and NSO amongthemselves and from other sources) remainsas one of the major challenges in stock esti-mation. As PIDS Senior Research Fellow Dr.Aniceto Orbeta Jr. observed, there is a sub-stantial difference of 5 million between theCFO’s stock estimate of 8.7 million and thatof the World Bank’s 3 million. In terms ofremittance, Dr. Orbeta mentioned that theWorld Bank’s estimate for 2007 is US$17 bil-lion while the BSP’s is US$14.4 billion.

This is likewise admitted by the presentorsthemselves as they have cited the non-com-parability of the figures produced by the NSOto those produced by the POEA and CFO.Interagency meetings are continuously be-ing held to address the need to improveheadcount of migrants, particularly thosewho left through backdoor channels, thosecounted as tourists upon departure, overseasworkers who have changed status and ac-quired a foreign nationality, and returningmigrants, among others.

Moreover, PIDS President Dr. Josef T. Yapexpressed uncertainty with regard to the ba-sis in choosing a base year since the stockestimate largely depends on it. Ms. Colladorecognized this weakness and said that thefirst step in improving the stock estimate isrevising the base data which the NSO plansto do by gathering all information on deploy-ment, registration, and departures from theBureau of Immigration for the past five years.

The data generated by the agencies con-cerned provide a very rich resource for ana-lyzing the critical issues on internationalmigration. However, the ones that are avail-able are not presented in their raw form sothat researchers would be able to do nuancedanalyses. Dr. Orbeta emphasized the ex-ample of NSO in consistently preparing pub-lic use files of the SOF and that it should beemulated by other data-generating agencies.

Considering that international migration isa dynamic phenomenon, it needs to be ana-lyzed through time. In particular, Dr. Orbetarelated that though the current flows of work-ers and remittances are of interest, there is

16

Atty. Golda Roma (center), acting deputy executive director of theCommission on Filipinos Overseas, discusses some of the constraints inthe current system of stock estimation. With her are PIDS Senior Re-search Fellow Dr. Gilberto M. Llanto and Director Helen Barayuga ofthe Philippine Overseas Employment Administration-Planning Division.


It is a well-known fact that remittances senthome by overseas Filipino workers(OFWs) and other Filipinos living over-

seas are among the major resources that keepthe Philippine economy afloat.

How these remittances are spent is one ofthe key points in the fourth and final ses-sion of the “Conference on Managing theDevelopment Impact of International Migra-tion” held recently in celebration of the 6thDevelopment Policy Research Month.

Mr. Guillermo M. Luz, executive vice presi-dent of the Ayala Foundation, in his presen-tation “Alternatives for Making the Most ofRemittances: The Ayala Foundation Case,”showed a profile of Filipino migrants world-wide and in the United States of America.With 1.45 million Filipino migrants in 2005,Luz said that the Philippines ranked tenthin terms of international migration “dyads”—pairing countries of origin with countries ofdestination (Table 1).

Related to this is the global picture of remit-tances which reveals two things: (1) that thePhilippines is one of the countries gettingmore than US$ 10 billion a year in formalremittances; and (2) that the Philippineshas a high dependency on remittances asshown by its percentage of GDP (10–14.9%).

In terms of spending, Luz enumerated fourareas, namely: consumption, investment, en-trepreneurial activities, and philanthropy orcharitable giving. The bulk of remittancesare spent through consumption in the Phil-ippines while some go to investment; mostlythrough the acquisition of properties spe-cifically housing.

The fourth area of remittance spending isnot a very large segment yet but is something

OFWs as philanthropists?

that has a lot of potential. Specifically, Luzpresented the alternative of philanthropy orwhat is also called “diaspora philanthropy”as a way of spending the remittances by cit-ing the case of the Ayala Foundation USA(AF-USA).

In terms of migrant grouping in the USA,Filipinos are considered the second largestgroup, representing 4.4 percent of all mi-grants in the country and with almost half(45.6%) living in California. One in five mi-grants arrived in the USA in 2000 or laterand 64 percent of these are adults of work-ing age. Half (49.6%) of all Filipino migrantsaged 25 and older have at least a bachelor’sdegree. Almost a third of employed femaleFilipino migrants were engaged inhealthcare occupations. Data also show thatFilipino migrants mostly had occupations inhealth care, administration, management,business, and finance.

Table 1. Top 10 international migration dyads

Rank

1

2

34

5

67

8

910

Country ofOrigin

MexicoRussia

Bangladesh

UkraineKazakhstan

Russia

AfghanistanBangladesh

Turkey

Philippines

Country ofDestination

United StatesUkraine

India

RussiaRussia

Kazakhstan

IranPakistan

Germany

United States

Number of Migrants(in million)

9.344.87

3.81

3.563.58

2.19

1.861.57

1.51

1.45

Source: Migrant Origin Database, Development Research Centre onMigration, Globalisation, and Poverty, University of Sussex. Citedby Ayala Foundation.


Keeping this profile in mind, the AF-USAwas organized in late 2000 as a public charityand registered with the US Internal RevenueService as a tax-exempt organization. As Luzdescribed, the foundation aims to becomethe bridge between Filipinos in the US andthe Philippines by creating opportunitiesthat facilitate meaningful contributions toPhilippine social development initiatives.

The AF-USA provides US-based Filipinos theopportunity to reestablish their links backhome and conducts resource-generating ac-tivities in the US to support social develop-ment projects in the Philippines.

To do this, the foundation provides a menuof Philippine projects that have shown re-sults; tax deductibility incentives to donors;convenience of donation options; due dili-gence to ensure that the funds go directly torecipient organizations and are used for thedesignated purpose; progress reports andother feedback on supported projects; andpublic acknowledgement of donors and vol-unteers. In 2006, AF-USA started recruitingFilipinos in key US cities as volunteers.

Since its inception in 2000, the foundationhas been able to mobilize a total of US$ 7.2million and has funded projects primarilyon education and training (78%) and sup-ported projects related to social welfare, pas-toral ministries, enterprise development,health, and arts and culture. Other projects

include the Fil-Am Youth Fellowship Pro-gram and the Brain Gain Program whichencourages visiting Filipinos to share theirexpertise to fellow Filipinos.

Related to this aspect, Luz cautioned againstthe thinking that all returning OFWs can be-come entrepreneurs and asserted that mostof them left the country as salaried workersand had no experience in setting up a busi-ness. He related that there is a risk in think-ing that the OFWs could come back and be-come entrepreneurs overnight as this couldresult in them losing all their savings. More-over, Luz said that undergoing entrepreneur-ial training is not a solution and instead pre-ferred that the money be used for other in-vestments where there could be a safer re-turn.

Microfinance expert Dr. Ma. Piedad Geronagreed and pointed out that the reason somegovernment projects fail is becausenonentrepreneurs are being forced to en-gage in businesses despite the lack of propertraining or experience.

In this regard, Dr. Geron recommended thatOFWs look into providing support for non-government organizations that engage inbuilding capacities of the real entrepre-neurs. In order to help their communitiesback home, OFWs can also look into projectsthat support microfinance institutions whichare instrumental in poverty alleviation in thecountryside.

As stated earlier, another area where remit-tances could be spent is through investment.Dr. Geron recommended that financial in-stitutions should provide safe and sound fi-nancial instruments to OFWs which shouldbe available not only from the commercialbanks that might be far from where the OFWfamilies are. If these instruments could bemade available by the grassroots financial or-ganizations, it would entail lesser transactioncosts for both the commercial banks and theOFWs. However, most of these grassroots fi-nancial institutions are not regulated; this istherefore something that the governmentcould look into.

Similarly, citing that about two thirds of re-mittances go to the rural areas, Prof.

Remittances from overseas workers are mostly spent on consump-tion goods and acquisition of properties such as a house.

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Jeremaiah Opiniano of the Institute of Mi-gration and Development Studies noted theneed to improve the rural microfinance in-frastructure so that the remittances’ devel-opment potential could work for the benefi-ciaries.

Meanwhile, Ms. Maria Regina Galias, chiefof the Immigration Services Office of theCommission on Filipinos Overseas (CFO),pointed out that the work of AF-USA is verysimilar to that of the CFO’s. Both organiza-tions share in the belief that Filipinos over-seas have a key role in the development ini-tiatives in the country and that they recog-nize the need for a systematized flow of do-nations from overseas to the home country.

Ms. Galias related that alongside AF-USA’sdevelopment projects which are initiativesof the private sector, the government, for itspart, has the CFO implementing a projectcalled Lingkod sa Kapwa Pilipino Program(LINGKAPIL) which has accumulated a to-tal of Php2.1 billion from 1990 to 2007. WhileAF-USA deals with donors from the USA,CFO’s mandate includes OFWs worldwide.

Ms. Galias likewise discussed the challengesin diaspora giving. She started with the needto pay taxes and duties especially when Fili-pinos abroad donate in kind. While cash do-nations are being encouraged by AF-USA, theCFO as a government organization cannothelp it if donors would like to give in kind,such as an old vehicle, for instance. She like-wise emphasized that donations are personalin nature and thus donors abroad would pre-fer that their donations go to specific projectsin the Philippines.

There is also the need for creating an en-abling environment to facilitate thediaspora’s involvement in development ac-tivities and a multi-stake partnership whereinthe donor is aware of what the communityneeds and the beneficiaries are aware of whattrainings they need. This way, donations areused efficiently and effectively. Lastly, thereis also a need for greater information dis-semination to donors abroad on the pro-cesses of donating to the Philippines.

The session on philanthropic giving broughtabout a new perspective to the issue on in-

ternational migration. As PIDS Senior Re-search Fellow Dr. Gilberto Llanto pointedout, human interaction is more importantthan just the remittances. Another is to lookat remittances as a way for communities tointeract.

However, Luz pointed out that the remitteror the receiver cannot be burdened with adevelopment need and that the primary pur-pose of the remittance is a personal or fam-ily need. This is evident in the pattern ofspending which is consumption-oriented.

More importantly, if remittances should belooked at from the developmental point ofview, the financial institutions should pro-vide safe and sound instruments by whichthe funds could be pooled and used by thefinancial sector.

As explained, the money coming fromabroad are already incorporated or budgetedby the receiving families as part of theirmonthly or yearly budget. Therefore, phi-lanthropy, according to Luz, is not for every-body and does not just depend on extra in-come but also on how one prioritizes andsees his spending habits.

In conclusion, Dr. Llanto reiterated thepoints mentioned by the speakers earlierthat entrepreneurship is not everyone’s “cupof tea.” An alternative could be to design abetter investment product that emphasizesthe soundness and safety features of the fi-nancial instrument as mentioned by Dr.Geron earlier.MAG

The remitter or the receiver cannot be burdened with adevelopment need and the primary purpose of the remit-tance is a personal or family need.

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DEVELOPMENT RESEARCH NEWSVol. XXVI No. 5

September - October 2008ISSN 0115 - 9097

Editorial Board: Dr. Josef T. Yap,

President; Mr. Mario C. Feranil, OIC

Vice-President and Director for Project

Services and Development; Ms. Jenni-

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Information; Ms. Andrea S. Agcaoili,

Director for Operations and Finance;

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ant.

Staff: Jennifer P.T. Liguton, Editor-in-

Chief; Ma. Aileen A. Garcia, Issue Edi-

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Nevertheless, the social effects of migrationare difficult to quantify. Dr. Bautista empha-sized that surveys only provide snapshots ofthe dynamics of migration, which barelyscratch the surface. The answers on how tominimize the negative effects of migrationremain elusive.

Moreover, methodological issues regardingthe study of the dynamics of migrationshould also be settled. As expressed by Pro-fessor Filomeno Aguilar from the Ateneo deManila University School of Social Sciences,the aspect of internal migration is often ne-glected when in fact, both dynamics of inter-nal and international migration are closelyrelated to each other. Above all, both Dr.Baggio and Dr. Bautista concurred that thereis need for a more comprehensive study onthe social costs of migration. Thus, a scien-tific study is needed. Different perspectivessuch as economic, sociological, psychologi-cal, and cultural should be looked into to fillin the research gap on migration. In turn,more specific issues on social costs of migra-tion should be studied.APQ

also a need to know how frequently remit-tances are sent and for how long the migrantsleave their families to work abroad. Withouta good set of panel data, it will be difficult toattribute, for instance, the breakup of fami-lies to migration without carefully establish-ing valid counterfactuals as mentioned inthe session on the social costs of migration.

Coming up with better estimates by improv-ing the methodologies and tools used andmaking these available to researchers andpolicymakers is a continuing journey for data-generating agencies.

While the tasks at hand seem difficult to ac-complish given the limitations these agen-cies deal with on a day-to-day basis, throughtheir persistent and collective efforts in im-proving the statistics on migration and re-mittances, overseas Filipinos and their fami-lies could look to a day when all is accountedfor, and their needs addressed through care-fully crafted policies and programs so thatthey would be better able to contribute toour economic development.MAG

Taking stock...from p. 12○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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Measuring...from p. 10○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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these impacts are to be as-sessed and related to the craft-ing of programs and policies thatwould help maximize our gainsfrom the diaspora are also criti-cal points of discussion.

Here, we take a look at the high-lights of the conference on "Man-aging the Development Impactof International Migration" heldrecently which capped the DPRMcelebration. The discussions ben-efitted from the information andinsights shared by the presentorsand discussants which hopefullywould largely contribute to thepresentation of the Philippinecase in the upcoming Global Fo-rum on Migration and Develop-ment that the country is host-ing. Special mention goes to theconference rapporteurs MichaelCabalfin, Michael Abrigo, AubreyTabuga, and Renee Ajayi for theircontributions.DRN

Editor's Notes...from p. 1○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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