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“Counting and Monitoring the Contribution of OFWs         Filipino version
(The Nation’s New Heroes)”

by Jose Ramon G. Albert, Ph.D 1

“Counting and Monitoring the Contribution of OFWs This October, our celebration of the National Statistics Month, focuses on “Monitoring Progress on Decent Work Through Statistics: Pathway to Inclusive Growth.” Undoubtedly, decent work has eluded a considerable number of our countrymen. Some of them have even become today’s wandering Jews, pursuing better economic prospects for their families by working overseas. Of late, these countrymen have been referred to as our nation’s new heroes (Bagong Bayani) as their aggregate contributions to the Philippine economy have been extremely significant, and certainly provided a mechanism for sustaining the country’s growth. 

The 1974 Labor Code of the Philippines (under then Presidential Decree 442) paved the way for the formal deployment of Filipino workers abroad.  Since 1974, it has been important to pay specific attention to Filipino laborers abroad, describe “who are they and where do they go?” in order to provide them proper attention.  

The Migrant Workers and Overseas Filipinos Act of 1995 named the Filipino laborers abroad as “Overseas Filipino Workers (OFWs)” or “Migrant Workers”.   These refer to “persons who are to be engaged, are engaged, or have been engaged in a remunerated activity in a state of which he or she is not a citizen”. For purposes of counting them, the National Statistics Office (NSO) through its Survey of Overseas Filipinos (SOF) identified them as “persons who are presently and temporarily out of the country during the reference period to fulfill an overseas contract for a specific length of time or were presently at home on vacation during the reference period but still had an existing contract abroad.”

Phenomenal Rise in the Number of OFWs

greenIn a span of three decades, Figure 1 illustrates the number of deployed OFWs in 1975 have increased tremendously from 36,035 in 1975 to over a million by 2006. As of 2010, the number of OFWs has been estimated at 1.47 million (38.4 percent higher than its 2006 figure). In 2011, the total number of OFWs continued its rising streak, expanding by 15.4 percent during the year, with the land-based and sea-based workers showing a spread of 19.5 percent and 2.5 percent, respectively. The phenomenal rise in these figures clearly points to the high premium put by the world to OFWs.

greenBased on POEA records, OFWs listed the Middle East and Balance Asia2 as their most preferred work destinations in 2010, accounting for 60.9 percent and 25.0 percent, respectively of the total deployed OFWs.

 

greensmiley1Compared to the 2000 deployment figures, Figure 2 shows that preferences for work destinations  declined for Balance Asia and Europe but increased for the Americas and the Middle East countries. It is worth noting that the Middle East countries hosted most of the OFWs in 2000 at 44.0 percent which even soared to 60.9 percent or more than half of the total number of OFWs in 2010.  In particular, Saudi Arabia and United Arab Emirates were the top country of destinations in the Middle East in 2010, while Hong Kong and Singapore were the favorite work places in Asia.    

 

greenThe estimated total count (1,470,806) of OFWs deployed in 2010 represent  about 4.0 percent of the total number of employed persons in the country, which was reported at 36,488,781 persons by NSO’s October 2010 Labor Force Survey (LFS).

Growing Compensation of OFWs as GNI improves

The compensation received by OFWs as estimated by the National Statistical Coordination Board (NSCB) showed continuing increases resulting in higher estimates of the Gross National Income (GNI).  The GNI represents the Gross Domestic Product (GDP) after accounting for the net primary income from abroad, composed mostly of the compensation of OFWs, aside from the property income and property expense recorded as part of the income of the economy from the Rest of the World (ROW).  The money received by OFWs in the form of salaries and wages including other compensation paid to OFWs (like overtime pay, bonuses, clothing allowances, etc.) are accounted for as the OFWs “compensation”. For 2011, its nominal value was 3.35 billion, contributing 26.0 percent to the GNI.

greenUndoubtedly, the increasing number of OFWs improves the country’s GNI as estimates of compensation continue on an increasing trend, contributing on the average a share of 22.0 percent to GNI.  Remittances data as reported by the Bangko Sentral Ng Pilipinas (BSP), has always been claimed to boost the GNI as this contributes to higher estimates of household final consumption expenditures and gross capital formation. In 2011 alone, OFW remittances amounted to 20.11 billion USD (or Php 871.25 billion), about 6.8 percent of our GNI for that year.

greenWith a population of 94.2 million in 2011, the Philippine economy expanded at a growth rate of 4.7 percent annually from 2000 to 2011.

 

greenThe Net Primary Income (NPI) from Abroad recorded a share of 17.2 percent in 2000, which escalated to 32.6 percent in 2010 and 31.7 percent in 2011.

 

greenOn the average, GNI grew by 5.8 percent during the period, 2000 to 2011. (See Figure 3)  With the continued increase in GNI, NPI from he rest of the world likewise prospered, exhibiting an annual average growth rate of 10.7 percent in the same period.

 

Better living standards for families of OFWs?

While statistics clearly show the contribution of OFWs (in terms of compensation received from abroad and the resulting remittances) to the growth of the country’s economy, it is important to also examine if the rising number of OFWs has translated to better living conditions of families of OFWs.

greenA policy note entitled “How do Filipino families use the OFW remittances”, written by Aubrey Tabuga, a research associate of the Philippine Institute for Development Studies (PIDS), suggests that OFW households are spending OFW remittances for better uses, such as education , medical care and housing aside from other basic needs. These findings are similar to those of other researches conducted on OFW remittances. Undoubtedly, Henry Sy and a number of our Filipino Chinese taipans have been big beneficiaries of such increased household final consumption expenditure.

greensmiley1What remains unanswered is whether the economic benefits the country and OFW families gain far outweighs the social costs of having some of our countrymen/women leave their families, especially their children, behind.  During times of unrest, natural calamities and other disasters in the receiving country, a number of our OFWs are forced to come home to the Philippines.  Although in such cases, government provides some immediate temporary relief, often these Filipinos choose once again to become OFWs as they find that labor opportunities in the country cannot fulfil the economic needs of their families.  When I was stationed in Qatar for several months (as an OFW), I heard harrowing stories of OFWs not getting their salaries on time, being promised wages much higher than what they were getting, and suffering verbal (and even physical) abuse from their employers. Immediately, after hearing these stories in Doha, I got the chance to chance upon Organisasyon ng mga Pilipinong Mang-aawit (OPM) President Ogie Alcasid, my schoolmate from La Salle Green Hills, and I encouraged him to write a song about the plight of OFWs. I am glad that Ogie not only wrote a song regarding OFWs, but also organized, together with other OPM artists, the “Balik Ka Bayani” benefit concert for OFWs in 2011.

So, ultimately, like every decision in life, there are benefits and costs. For OFWs, they have chosen to pursue economic gains even if leaving their children behind may yield irreparable harm to the ties that bind their families… how much are we, especially taipans like Henry Sy (who are reaping a lot of benefits from the toil of OFWs), doing to help these new heroes?   

 

________________________________

* “Beyond the numbers” is our latest addition to the statistical articles that the NSCB Technical Staff has been releasing in our effort to enhance the way we communicate statistics. It tackles relevant economic, social and environmental issues that matters to the lives and well-being of people through in-depth but understandable statistical analysis. “Beyond the numbers” aims to transform numbers into accurate, timely and relevant knowledge to enable users to understand the value of statistics in their daily lives.

“Beyond the numbers” expounds on current issues by providing relevant statistics, explores  the details of how the data were generated and explains the meaning behind the figures.

1 Secretary General of the National Statistical Coordination Board (NSCB). The NSCB, a statistical agency functionally attached to the National Economic and Development Authority (NEDA), is the highest policy making and coordinating body on statistical matters in the Philippines. Immediately prior to his appointment at NSCB, Dr. Albert was a Senior Research Fellow at the Philippine Institute for Development Studies, a policy think tank attached to NEDA. Dr. Albert finished summa cum laude with a Bachelor of Science degree in Applied Mathematics from the De La Salle University in 1988. He completed a Master of Science in Statistics from the State University of New York at Stony Brook in 1989 and a Ph.D. in Statistics from the same university in 1993. He is an Adjunct Faculty at the Asian Institute of Management. He is also a past President of the Philippine Statistical Association, a Fellow of the Social Weather Stations, and an Elected Regular Member of the National Research Council of the Philippines.

This article was co-written by Mr. Raymundo J. Talento, Ms. Vivian R. Ilarina, Ms. Luzviminda S. Mitra, Ms. Irene T. Talam; Director, Statistical Coordination Officer (SCO) VI, SCO V, and SCO III , respectively, of the NSCB. In our effort to reach out and explain the statistics to the masses, this article was translated in Filipino by Mr. Edward Eugenio P. Lopez-Dee, SCO VI of NSCB. The authors thank Mr. Candido J. Astrologo, Jr.,Mr. Noel S. Nepomuceno, Mr. Ruben V. Litan, Ms. Ma. Libertie V. Masculino, Ms. Simonette A. Nisperos, Mr. Sonny U. Gutierrez and Mr. Dennis E. San Diego; Director, Information Technology Officer II , SCO IV, SCO IV, Information System Analyst II, SCO I and Artist/Illustrator, respectively, for the assistance in the preparation of the article. The views expressed in the article are those of the authors and do not necessarily reflect those of the NSCB and its Technical Staff.

2 Balance Asia in this article refers to Asia without Middle East.



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Figure 1. Number of Overseas Filipino Workers, 1975 to 2011

fig1

Note : 1975-1996 – Special computations made by the NSCB Technical Staff using data on processed contract workers from POEA

Source of data: Philippine Overseas Employment Administration (POEA)

 

Figure 2. Comparison of OFWs by Work Destination, 2000 and 2010

fig2

Source of data: Philippine Overseas Employment Administration (POEA)

 

Figure 3. GDP and GNI, at Constant Prices, 2000 to 2011

fig3

Source of data: National Statistical Coordination Board (NSCB)

 

 

Bubble Chart.  Number of Landbased OFWs and Cash Remittances
of Overseas Filipinos

 

 

 

Posted: 12 October 2012

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