Migration contributes to inequality in RP--study

by JEREMAIAH M. OPINIANO
OFW Journalism Consortium

FIGURES from the Bangko Sentral ng Pilipinas show that remittances from January to
July this year have increased by US$847.55 million over the same period last year.

For the said period, BSP figures revealed that US$4.263 billion in foreign remittances
came to the formal banking system as compared to US$3.416 billion last year. On
this basis, the BSP is forecasting that an all-time high of eight billion dollars in
remittances will be achieved by the year's end, as reported last October 26 in the
Philippine Daily Inquirer.

However, while remittances have largely helped keep the Philippine economy afloat,
a recent paper by a migration research expert from De La Salle University raises
some alarming findings related to migration, poverty and inequality.

Migration's benefits don't go down to the poor?

In a faculty experts' media forum organized by DLSU's Marketing Communication

Office (MCO) last November 7 in Makati City, Behavioral Science professor Stella Go
said the economic benefits of international labor migration "have not trickled down to
the poor and less developed regions in the country."

Go's preliminary analysis was contained in a paper titled "Migration, Poverty, and
Inequality: The Case of the Philippines," which she presented at a conference
organized by the Asia-Pacific Migration Research Network (APMRN) last September
24 to 26 on the Pacific island of Fiji.

She based her findings from the Family Income and Expenditures Surveys (FIES),
the Surveys on Overseas Filipinos (SOF), conducted annually by the National
Statistics Office (NSO), the official government statistics on remittances and migrant
outflows from the Bangko Sentral and the migration-related agencies, and poverty
statistics from the National Statistical Coordinating Board (NSCB).

Go, who is also president of the Philippine Migration Research Network (PMRN), said
that the poorer segment of Philippine society "have been largely excluded from the
opportunities provided by migration."

She based this on her finding that OFWs come from regions with the lowest poverty
incidence, and these regions have the most number of migrant outflows such as the
National Capital Region, Central Luzon, and Southern Tagalog.

In sharp contrast, Go added, the regions in Mindanao, which have high levels of
poverty incidence, have the lowest proportion of OFWs. These include the conflict-
ridden Autonomous Region of Muslim Mindanao (the poorest region where the
smallest proportion of migrant workers come from), Central Mindanao (region 12),
Southern Mindanao (region 11), Northern Mindanao (region 10), and Western
Mindanao (region 9).

Poverty incidence versus number of OFWs per region

The National Capital Region, according to the 1997 FIES, has 6.4 percent of its
residents at or below the poverty threshold, and contributes 19.1 percent of the
country's total OFWs.

The provinces of Luzon, whose six regions-excluding the NCR--have a 30.1 percent
poverty incidence rate, contribute 53.2 percent of the country's total overseas
workers. Migrant workers from Mindanao, the country's poorest geographical area
with a 44.6 percent poverty incidence rate, however, only account for 12.3 percent of
the country's total OFWs. Visayas, with a 38.2 percent poverty incidence rate,
accounts for 15.4 percent of the total number of OFWs.

Southern Tagalog, with a 25.7 percent poverty incidence rate, ranks second
nationwide in terms of OFWs' regional origins with 18.9 percent. OFWs from Ilocos,
which has a 37.8 percent poverty incidence despite having a long history of labor
migration to the US, comprise 12.6 percent of the national total.

OFWs from Central Luzon, with a 15.4 percent poverty incidence, account for 12
percent of the national total. ARMM, though it has the highest poverty incidence rate
of 57.3 percent in the 1997 FIES, only accounts for 1.9 percent the country's total
OFWs.

From the 1997 FIES, the Philippines has a 31.8 percent national poverty incidence,
although 2001 figures from the NSCB show that the figure rose to 40 percent. Go did
not include the 2001 poverty incidence figures in her paper.

Go notes in her paper that studies on migration and poverty and inequality are
insufficient, with their common assumption "that poverty must have pushed the
migrants out of their place or origin to search for better economic opportunities
elsewhere."

Impacts on OFW, family, community vary accordingly

On how migration affects the OFW, his or her family, and community or region of
origin, Go said the economic returns to labor migration vary across skills and country
destinations "because foreign wages and placement costs also vary accordingly."

"On the whole, wages increase with skill level, with professionals receiving higher
wages than domestic helpers; however, wages vary significantly within each skill
category according to the country of destination."

"For instance, domestic helpers in Europe receive higher wages than those in the
Middle East, while Hong Kong pays higher than Singapore and Malaysia. Computer
programmers are paid five times more in the US than in Saudi Arabia while
accountants in Singapore are paid three times more than those in American Samoa,"
Go wrote.
In her paper, Go, citing 1998 figures from the Philippine Overseas Employment
Administration (POEA), showed that accountants in Singapore earn $1,650 as
compared to $551 for OFW accountants in American Samoa. Nurses in the United
Kingdom, now a prominent work destination, earn $1,984 as compared to the $406
for nurses working in Saudi Arabia.

For domestic workers, those in France earn $900, $600 in the UK, $476 in Hong
Kong, $202 in Malaysia, and $200 in Saudi Arabia, a country where a recent labor
arrangement between the country's Department of Labor and Employment (DOLE)
and the Kingdom's Ministry of Labor and Social Affairs was made--affecting unskilled
workers, with domestic workers included.

BSP deputy governor Amando Tetangco, quoting an Inquirer report, said the
prospects of the rise of remittances are bright "with the expanded hiring of the
United Kingdom in the medical field." Recent reports showed that local doctors or
dentists undergo nursing training to qualify them for work in the UK as nurses.

On an annual basis, accountants who work abroad can earn P281,843 a year,
compared to local accountants who earn P145,584. For domestic workers, OFWs earn
P98,719 annually as compared to the P24,000 of the local domestic workers for an
annual wage differential of P74,719.

Urban families benefit more from migration than rural families

A significant proportion of Filipino families has relied on remittances or "income from

abroad" as the main source of income, Go noted. Citing the 1997 FIES, Go said that
a total of 881,263 Filipino families, or 6.2 percent of the total number of families,
derived their main source of income from remittances.

But the bigger part of that number who benefits from remittances comes from urban
families. In the 1988, 1991, 1994 and 1997 FIES, urban families who cite income
from abroad as their main source of income outnumber the rural families.

These include NCR and Central Luzon, Go said, with the exception of Ilocos, which
has a long history of international labor migration to the US. Despite the region's
high poverty incidence, which is pegged at 37.8 per cent, Go said FIES figures show
that Ilocos "has reported the highest proportion of families relying on remittances as
its main source of income." The region accounts for 12.6 percent of the country's
total number of OFWs.

"The percentages of families at the lower end of the income groups receiving income
from abroad tend to be higher in the urban areas than in the rural areas," Go said.

She added that families from the higher income groups "also receive larger
proportions of income from abroad than the lower income groups." In marked
contrast, Go added, the lower income groups derive the largest part of their income
from domestic resources."

'The most disquieting aspect of international labor migration'

For this set of data, Go concluded that the "poorer segment of Philippine society has
been largely excluded from the opportunities provided by migration."

"International migration," Go added, "appears to have contributed instead to the

long existing problem of inequality in Philippine society. If this is so, it is perhaps the
most disquieting aspect of international labor migration from the Philippines today."

Although Go said much research should to be done on migration and poverty and
inequality to understand their links to each other. Migration "may fuel a simmering
social volcano instead of douse it" in a country that is "fraught with social problems
and economic difficulties."

For this purpose, the PMRN president said that serious attention must to be given to
"channeling remittances into more productive investments to fuel economic
development."

"The challenge is to manage the economic gains from international migration so that
these can be more equitably shared by a much large number and cross-section of
Philippine society."

Since 1999, the Philippines has received over US$6 billion in remittances--with all
those passing through formal channels such as banks. Last year, the figure was
US$6.235 billion--with US$5.124 billion from land-based OFWs and US$1.093 from
the sea-based (the latter figure being the highest for the sector thus far).

BSP's remittance records showed that OFW remittances reached a high of US$7.367
billion in 1998. This figure is despite the perils brought by the 1997 Asian financial
crisis.

Showing the macro-benefits of migration, from the period 1990 to 1999, Go said that
remittances contributed an average of 20.3 percent to the country's export earnings
and 5.2 percent of gross national product (GNP).

It should be noted that remittances are made directly to OFW families and
beneficiaries, and as such, the national government does not receive any portion of
OFW remittances.

OFW Journalism Consortium

Table 1: Remittance figures (from Go, 2002; Bangko Sentral ng Pilipinas)

January to July

1997 1998 1999 2000 2001 2002 2001

Total (in US$

5,741,835 7,367,989 6,794,550 6,050,450 6,031,271 4,263,594 3,416,044
million)
Land-based (in
5,484,223 7,093,440 5,948,341 5,123,773 4,937,922 3,560,995 2,804,910
US$ million)
Sea-based (in
257,612 274,549 846,209 926,677 1,093,349 702,599 611,134
US$ million)
 Remittances as %
22.8 16.7 19.4 Not Not
of Export
percent percent percent available available
Earnings 1
Remittances as %
6.6 7.1 8.7 Not Not
of Gross National
percent percent percent available available
Product (GNP) 2

Remittances/OFW $7,679.4 $8,859.6 $8,117.5 $7,189.0 $7,194.7

(US$)Total

Land-based $9,806.8 $11,112.3 $9,289.5 $7,964.8 $7,770.9

Sea-based $1,366.9 $1,420.3 $4,302.3 $4,672.5 $5,334.5

1 - From 1990 to 1999, the percentage of remittances to export earnings is 20.3 percent
2 - From 1990 to 1999, the percentage of remittances to GNP is 5.2 percent

Table 2: 1997 Distribution of OFWs and Poverty Incidence of Families by Region (Go, 2002)
% Distribution of Poverty Incidence of Families
Island Group / Region Rank Rank
OFWs (%)

Philippines 100.00 31.8

National Capital Region 19.1 1 6.4 15

Luzon 53.2 30.1
* Cordillera Autonomous Region 2.0 12 42.5 5
* Region 1: Ilocos 12.6 3 37.8 10
* Region 2: Cagayan Valley 5.0 6 32.1 12
* Region 3: Central Luzon 12.0 4 15.4 14
* Region 4: Southern Tagalog 18.9 2 25.7 13
* Region 5: Bicol 2.7 9 50.1 2
Visayas 15.4 38.2
* Region 6: Western Visayas 9.4 5 39.9 8
* Region 7: Central Visayas 4.2 7 34.4 11
* Region 8: Eastern Visayas 1.8 14 40.8 6
Mindanao 12.3 44.6
* Region 9: Western Mindanao 3.0 8 40.1 7
* Region 10: Northern Mindanao 1.3 15 47.0 4
* Region 11: Southern Mindanao 2.6 10 38.2 9
* Region 12: Central Mindanao 2.4 11 50.0 3
* Autonomous Region of Muslim
1.9 13 57.3 1
Mindanao