The Philippine Diaspora

PHILIPPINE WOMEN’S UNIVERSITY

THE PHILIPPINE DIASPORA:
THE RESULT OF HIGH UNEMPLOYMENT IN THE COUNTRY

Marie Gabrielle Jimenez

8/5/2013

This is a paper submitted to Ms. Lilia Casanova for the partial fulfillment of requirement for the course of Philippine Social and Economic Development Issues (MFSC011).

I.

Unemployment in the Philippines

According to the International Labor Organization (ILO), unemployed people are those who are currently not working but are willing and able to work for pay, currently available to work, and have actively searched for work. Simply put, it is the term used for the state in which people are in when they are jobless but wish to and are capable of work. In recent years, unemployment has presented itself as one of the main issues of the Philippines. The Philippines is ranked as the fifty-ninth (59th) country in the world with the worst case of unemployment 1 – the country even has a better unemployment rating than the United States of America, the United Kingdom, Canada and France. However, the unemployment rate in the Philippines is known to be the highest in South and Southeast Asia with 7.5% of its people unemployed. This figure comes as a stark difference from the country’s regional brothers, Cambodia and Thailand, who have nearly 100% of their work-abled population employed. Recently, the unemployment rating of the country has jumped from 6.9% (April 2012) to 7.5% (April 2013) 2 – there are currently 2.89 million Filipinos who are unemployed. The National Economic and Development Authority (NEDA), nonetheless, has stated that the figure will be brought down in due time because the country, under President Benigno “PNoy” Aquino III, has been able to bring down the unemployment rate from 8% (April 2010) to 6.9% in just two (2) years. NEDA has also stated that the goal at the start of President Benigno Aquino III’s term as President was to bring down the unemployment rate to 6.8% - 7.2% by 2013 from the 8% rating in 2010.

1

http://www.gfmag.com/component/content/article/119-economic-data/12384-worlds-unemploymentratescom.html#axzz2b3MHMyBA 2 http://www.philstar.com/business/2013/06/11/952797/philippine-unemployment-6.9-7.5

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The drop in employment is primarily due to the decline in the agricultural sector. The loss of the agricultural sector is reported to have been 624,000 workers, in the midst of growth in the industry and services sector which generated 224,000 and 380,000 jobs respectively.3 The services sector is the largest group of workers in the country, followed by the agricultural sector, and the industry sector.

Division of Workers by Sector

Services Sector (52.6%) Agricultural Sector (31.3%) Industry Sector (16.1%)

Figures taken from the National Statistics Office, 2012

In the Philippines, the National Capital Region (NCR) has the highest unemployment rate with only 90.1% of its citizens employed. The highest employment rate was recorded in the region of Cagayan Valley with 96.8% of its citizens employed, followed by MIMAROPA and Zamboanga Peninsula with 95.9% employment rate each.4 Ironically, Zamboanga Peninsula and MIMAROPA are the fourth (4th) and tenth (10th) poorest regions in the country, with NCR ranking as the least poorest among all regions.

3 4

http://business.inquirer.net/126411/philippines-jobless-rate-soars-record-growth http://www.census.gov.ph/content/employment-rate-july-2012-estimated-930-percent

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II.

The Effects of Unemployment (Analysis)

The answer to unemployment in the Philippines is seen as to be connected to the

“need to improve the employability of worker applicants, particularly those with secondary and tertiary education,” (Emmanuel Esguerra, 2013). It is important to note that majority of the unemployed are high school graduates (31.7%), college graduates (21.3%) and lastly, college undergraduates (14.6%). The country has been struggling to bring together the lack of jobs for people who have very little training with a shortage of skilled workers in different industries. Presently, the government has announced that the creation of more jobs for the people is the biggest priority along with education.5 In line with this, the President has promised to cut the unemployment rate to 6% by the year 2016 or the end of the presidency of PNoy. According to the World Bank, the Philippines attracts the least foreign direct investment in Southeast Asia. Because of this, the government has proposed to simplify some complications faced by foreign investments as these investments may be a straight forward answer to the problem of unemployment. The government has also stated that the development of the agricultural sector is needed in curtailing the problem of unemployment and even population density in the urban cities. Until the problem is addressed and dealt with, and with limited opportunities for many job seekers, going abroad has been the solution to unemployment for many Filipinos. In recent years, there has been a great number of Filipinos moving or flying out of the country for work. The search for “greener pastures”, led by the American Dream, has brought about the Filipino Diaspora - a Diaspora is defined as a movement, migration, or scattering of a group of people away from their ancestral homeland.
5

http://www.bloomberg.com/news/2013-05-07/philippine-unemployment-rising-undermines-aquino-sgrowth.html

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III. The Filipino Diaspora
Despite it being ever present in Philippine culture today, the Filipino Diaspora can be traced back in periodical waves. The First Filipinos who had migrated out of the country, or the First Wave, landed on American shores during the time of New Spain – when the Philippines had still been under Spanish colonization. The First Wave had landed in New Orleans, USA for the World’s Fair, while other migrants landed in Mexico via the Manila galleons. The migrants sent were treated as slaves and/or soldiers. This wave had ended upon Spain’s settlement with the Americans in which the selling of the Spanish East Indies had taken place after the Spanish and Philippine – American Wars. The Second Wave of Filipino migrants was during the American colonization when Filipinos were considered US Nationals. Filipinos were given free entry onto US shores – a privilege that other Asians were not so freely given. This wave is oftentimes called the Manong Generation / Wave. The reason for the coining of the Manong Generation was because of the fact that majority, if not all, of the migrants to the US at that time had been labourers (mostly farmers from Ilocos or the Visayas) to tend to the fields. Unlike the Spanish, however, the Americans had treated the Filipino migrants as equals. Filipinos had been given an education and therefore saw themselves not as aliens of the foreign land. This wave of migration had ended because of the Philippine Independence Act of 1934. Upon enactment of the law, only fifty (50) Filipinos per annum were allowed entrance onto American shores for immigration. Shortly, Filipinos were given the chance to enlist in the US Navy because of basing agreements between the two states. Certain limitations were then introduced to the entrance of Filipino – American Navy sailors upon the period of interwar. But full rights to their entrance were instilled after World War II.

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The Third Wave of Filipino migrants saw the entrance of professionals onto American soil. After the Second World War, Filipinos who had served in the war were given the option of moving to the US to become American citizens. Tens of thousands of people had taken this opportunity. The entrance of Filipino teachers, lawyers, and engineers had also taken place. A slew of racist activities on the West Coast of the US had occurred, often belittling the Filipino professionals as dogs or children of the field workers (in relation to the Manong Generation).
Officials of Government and Special Interest Organizations, Corp. Executives, Managers, Managing Proprietors and Supervisors Professionals

Occupation Groups
3% 13%

Technicians and Associate Professionals Clerks

31%
6% Service Workers and Shop & Market Sales Workers Farmers, Forestry Workers, and Fishermen Trade and Related Workers 16% 13% Plant and Machine Operators & Assemblers

6%

12%
0.1% Laborers and Unskilled Workers

Figures taken from the National Statistics Office, Survey on Overseas Filipinos 2012

Presently, the Fourth Wave of Filipino migrants are an array of differently skilled workers – from low-level skilled workers, to mid-level skilled, to professionals (See
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pie graph on Occupation Groups). This present wave of Filipino migrants is primarily known nowadays due to the mass migration of nurses and seafarers out of the country. There is an estimated fifty thousand (50,000) nurses who support the United Kingdom’s National Health Service sector and a quarter-of-a-million (250,000) top-quality seafarers manning most of the world’s commercial vessels. Laborers or low-level skilled workers are the largest occupation group of Overseas Filipino Workers (OFWs).6 The trend seen for this wave of OFWs is that majority of them choose to work in Asia, 79.7% of them to be exact, as opposed to the earlier waves of Filipino migrants which majority migrated to the Americas. Majority of the OFWs who choose to work in Asia can now be found in the Middle East.

IV.

The Effects of the Philippine Diaspora

Presently, there is an estimate by the National Statistics Office (NSO) that there are 2.2 million OFWs all over the world. There are three thousand (3,000) Filipinos who leave the country everyday just to work abroad. As these OFWs see that going abroad for work is a way to make a living, the government has also reaped the reward of growth that it has brought to the economy. Because of the 2 million OFWs, the remittances that the OFWs have brought to the country have been a recorded $8.783 billion for this year alone.7 The government now currently sees the OFW remittances a significant source of human capital development since remittances go straight to households. NEDA had even released a statement in the last quarter of 2012 stating that, “zero dependence on remittances is probably very ambitious. In

reality overseas remittances are a significant part of a country’s economy at any given stage of development.” 8
6

http://www.census.gov.ph/content/total-number-ofws-estimated-22-million-results-2012-survey-overseasfilipinos 7 http://www.philstar.com/headlines/2013/07/16/975181/remittance-ofws-5.3 8 http://www.rappler.com/business/12143-philippine-economy-can-t-do-without-ofw-remittances-neda

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The economic impact that this group of Filipinos has brought to the country has shed a whole new light on the issue of going abroad for work. Whereas, before, the issue was not that of what these OFWs can give back to the country, but it was that of brain drain. Desertion of a country’s own citizens was what was seen by the government and majority of the people. At the moment, however, working abroad seems to be the answer for the bigger problem of unemployment in the country. Because of the dramatic shift in the way OFWs are seen, the government has created numerous agencies to assist in the assistance of its nationals abroad. The assistance to nationals abroad has always been one of the main undertakings of the Department of Foreign Affairs. However, due to the major rise in the number of Filipinos abroad, the government had created three (3) key agencies that will focus solely on the welfare of OFWs while they are in the Diaspora: the Overseas Workers Welfare Administration, the Commission on Filipinos Overseas, and the Philippine Overseas Employment Administration.

V.

The Government Agencies a. The Overseas Workers Welfare Administration
The Overseas Workers Welfare Administration or OWWA is an agency attached to the Department of Labor and Employment (DOLE). It was created in 1977 through the “Welfare and Training Fund for Overseas Workers” as instructed by President Ferdinand Marcos for the Department of Labor. The OWWA was then formalized into its present name by President Corazon Aquino. OWWA is the lead government agency tasked to protect and promote the welfare and well-being of OFWs and their dependents.9 OWWA’s mandates are to deliver welfare benefits and services, and to ensure capital build up

9

http://www.owwa.gov.ph:8080/wcmqs/about/

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and fund viability. The objectives of OWWA are to: (1) to protect the interest and promote the welfare of OFWs, (2) facilitate the implementation of the provisions of the Labor Code concerning well-being of OFWs, (3) provide social and welfare services to OFWs, (4) ensure that the fund be collected efficiently and be used viably sustainably, (5) undertake studies and researches for the enhancement of the programs of the agency, and (6) finance, develop and support specific projects for OFWs. One must be a member of OWWA in order to partake in the agency’s benefits and services. To become a member, an OFW must pay a membership fee of $25.00. Some of the agency’s benefits and services include social, and education & training benefits, the Workers’ Welfare Assistance Program, the Repatriation Program, and the Reintegration Program.10 Some of the social benefits that an OFW may receive if he/she is a member are death and burial benefits. The education and training benefits include, but are not limited to, pre-departure education programs, scholarship incentive programs for seafarers, and scholarships for their dependents.

b. The Commission on Filipinos Overseas
The Commission on Filipinos Overseas (CFO) is an agency of the Philippine Government tasked to promote and uphold the interests of Filipino emigrants and permanent residents abroad, and to preserve and strengthen ties with Filipino communities overseas. 11 It was created in 1980 through Batas Pambansa 79. Its main functions are to provide
10 11

http://www.owwa.gov.ph:8080/wcmqs/programs_services/ http://cfo.gov.ph/index.php?option=com_content&view=section&id=12&Itemid=789

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assistance to the President and Congress of the Philippines in the formulation of policies and measures concerning or affecting Filipinos abroad, develop and implement programs to promote the interest and well-being of Filipinos abroad, and liaise on behalf of Filipinos overseas with appropriate government agencies in the transaction of business and other similar ventures in the Philippines. The CFO has various programs for the benefit of OFWs, however, the most important program to date of the agency for OFWs is the Diaspora to Development Initiative (D2D). Under D2D are several projects that have proven well for other countries in showing significant progress in mobilizing their Diaspora communities to contribute to home country development.

c. The Philippine Overseas Employment Administration
The Philippine Overseas Employment Administration (POEA) is an agency aimed to promote and develop the overseas employment program and to protect the rights of migrant workers.12 POEA was created in 1982 by President Ferdinand Marcos’ Executive Order 797. The main function of the agency is to set provisions and programs for industry regulation, employment facilitation, workers’ protection, and support services. With this, the POEA is the primary government agency delegated to supervise and observe recruitment agencies in the Philippines.13

12 13

http://www.poea.gov.ph/html/aboutus.html http://www.ofwguide.com/directory_poea.php

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VI.

Conclusion and Recommendations

The Philippines’ high rates in unemployment have resulted in a mass migration out of the country. Leaving the country for employment opportunities has turned into a need rather than a choice. The government is keen on improving employment in the Philippines. The creation of more competitive jobs (not just simple jobs, but competitive jobs) in the country would certainly reduce the number of Filipinos leaving the country for work, and would provide options for the Filipino people. There is no doubt that there is an array of work abroad that has more attractive pay checks and benefits than ones currently found in the Philippines. The Philippines is the country in Southeast Asia that attracts the least foreign investments. The government has already addressed that these investments may be another key player in the creation of sustainable and competitive work. However, a noticeable drop in the agricultural sector must be addressed. There is a need to develop the agricultural sector. Above all else, the country is known as one that is agricultural. The Philippines is rich in resources. These resources must be put to use for the development of the country and its people. If this sector is developed properly, there will be a definite drop in unemployment and the need to import products that are/will be widely available in the country. It is important to note, however, that the economy of the Philippines has been riding a high for some time all in part because of the OFWs. In a highly globalized world, a Diaspora cannot be avoided. With this, the government has been on the right track of taking tremendous care of its nationals abroad – particularly the OFWs. By taking care of the human resources it has overseas, it is actually watching over its own welfare.
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OFWs are now under the watchful eye of three (3) key agencies and even a number of non-government organizations, as previously stated in the paper. As anything else in the country, there are numerous projects and policies for the betterment of Filipinos overseas. The agencies, in the end, must be able to implement these projects and policies appropriately. With the country being rich in human resources, there is no need in seeing the Filipino Diaspora as something to be frowned upon. Every person in the Philippines has a relative abroad – if not the mother or father, then an aunt or a distant cousin. And with the educational reform of the government which aims to produce a more skilled and competitive work force, the Diaspora can only become bigger in number. One cannot deny that the Diaspora is now how the Philippines and its people scrape on. “What was once called desertion is now commonplace and what was once an

anomaly is now a trend.”14

14

http://www.patriciaevangelista.com/blonde-and-blue-eyes/

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