It appears that anywhere you go in the world, you will probably have found a community of Filipino immigrants that has already established itself or is just getting started. Filipinos are one of the world’s most solely devoted workers, with truly admirable qualities that entice us to other racial groups. This article will help you understand how Filipino migrant workers contribute to the economy.
Several citizens of underdeveloped countries, such as the Philippines, consider leaving their families and homeland in search of better work opportunities in other countries. The mental anguish brought about by leaving a loved one will always be existent, nevertheless, other developed economies of other countries often provide better opportunities for earning a living. Some compelling reasons to emigrate are higher pay, enhanced overall working conditions, and a substantially better lifestyle. Vast numbers of Filipino emigrants send large amounts of money home annually. The Philippines considers its emigrant population to be the nation’s most valuable foreign exchange earner. Roughly 10% of the country’s population works abroad, which is undoubtedly a sizable proportion of the Filipino labor force. But how do Filipino migrant workers contribute to the Philippine economy?
What is an OFW?
OFW is an acronym that stands for Overseas Filipino Worker (OFW). An Overseas Filipino Worker is a person of Filipino descent who lives outside the country. The term OFWs refers to Filipinos who are living in another country as legal immigrants as well as those who are visiting for work or study. The International Labour Organization (ILO) reported last March 2022, that there are about 11 million Filipinos living abroad.
Before the COVID-19 pandemic, an approximate 10 million Filipinos, around tenth of the Philippine population, were living and working abroad as domestic workers, mariners, nursing staff, and other occupations. The majority of Overseas Filipino Workers are from Luzon. OFWs from CALABARZON provinces account for eighteen point four percent (18.4%) of all Overseas Filipino Workers, followed by those from Central Luzon provinces thirteen point nine percent (13.9%) and the National Capital Region twelve point eight percent (12.8%). As a result, 45.1 percent of all Overseas Filipino Workers are from Luzon. The remaining OFWs are from the Visayas and Mindanao. However, it must be acknowledged that Eastern Visayas (dominated by Leyte and Samar) account for nine point four percent (9.4%) of all OFWs, while Western Visayas (Panay and Negros) account for six point five percent (6.5%). Mindanao produces fewer Overseas Filipino Workers. Is this, however, a possible empirical mistake? Mindanao is a land of immigrants from the Philippines’ northern provinces. Did they classify themselves as ethnics from their Luzon and Visayan origins or with the province of their immediate residential area in the survey? Nonetheless, all Mindanao regions account for just thirteen point two percent (13.2%) of all OFWs.
How do OFWs help the economy?
For decades, inflows from OFWs have become one of the domestic economy’s growth operators. Overseas Filipino Workers (OFWs) are considered to be modern-day heroes all over the Philippines. Their jobs in other foreign countries have significantly reduced poverty and played an important role in transforming our once-struggling financial sector into the thriving one it is today.
Over the last few years, OFW remittances have continuously grown to more than USD 25 billion per year. Since this money is sent to families of Overseas Filipino Workers to buy primarily goods and services, it directly benefits businesses, resulting in higher income in related aspects of the economy. This is one way how Filipino migrant workers contribute to the economy. Overseas Filipino Workers send money to their families left home on a regular basis. These foreign remittances, like the exports we sell to other countries to earn dollars, have provided a consistent source of dollar earnings. It has demonstrated its resilience in the face of several crises, and authorities and economies regard this as a plus for the economy’s development. In addition, the Philippines’ Balance Of Payment (BOP) position and Gross International Reserves (GIR) are also anticipated to boost from the continued tenacity of Overseas Filipino Workers (OFWs) remittances. Clearly, OFW remittances influence the macroeconomics of the Philippines. However, they also provide numerous far-reaching and deeply rooted microscopic benefits. OFW remittances continue to provide the most important growth in the lives of Filipinos. Inward remittances supplement the recipient households’ total income. It increases disposable income even if a homeowner generates one’s own domestic income. Consumer spending shoots up as wages rise. This progresses from basic needs to enhanced consumption of goods. There is no escaping the fact that most families of Overseas Filipino Workers’ (OFWs) standard of living has changed for the better. The funds are distributed directly to household members, family and friends, relatives, and peers, who use them to improve their lives by financing food and other basic necessities, schooling, and innovative business endeavors.
Read also: Affordable Housing Programs in the Philippines for OFWs
According to a Filipino economist, cash remittances transmitted by Overseas Filipino workers (OFWs) showed an increase of 3.2 percent annually to roughly USD 2.594 billion. Moreover, the influx is expected to increase further as more economies reopen. The Bangko Sentral ng Pilipinas (BSP) reported that cash remittances increased by 2.4 percent year on year to USD7.77 billion in the first quarter of this year. The revival of more economic systems is also a benefit for remittances, while other drawbacks include Russia’s attack on Ukraine, a rise in the US and global bond yields relative to the expected hikes in Federal Reserve rates, and recent Chinese lockdowns, which may have an impact on global growth. Remittances sent by Overseas Filipino workers (OFWs) are helping to bridge the gap between the rich and the disadvantaged by supporting a thriving middle class. With higher standards of living and more expendable income, consumers spend more on goods and services, propelling the economy forward. This is how OFWs help the economy. Money deposited from everywhere in the globe by Filipinos accounts for at least 10% of the nation’s Gross Domestic Product (GDP). It is the second major source of foreign capital after value-added exports such as electronic parts, and a significant source of personal spending, which accounts for 75 percent of GDP. Last year, Filipinos working abroad sent home a record of USD 31.4 billion in cash remittances, bolstering the Philippines’ macroeconomic stability during from pandemic. The shift to digital remittance channels also simplified money transfer and recording.
Remittances have a far-reaching impact on the Philippine economy that goes much further than GDP figures. OFW remittances have played an important role in the country’s foreign exchange earnings. As a result, these remittances have contributed to improving the country’s balance-of-payments position, boosting the current-account surplus.
Inflows sent by foreign workers contribute not only at the macroeconomic level of the Philippines’ national economy but also at the microeconomic level of household finances. This sums up how Overseas Filipino Workers (OFWs) help the economy.
Read also: Bria House and Lot: OFWs and their impact on the Philippine Economy
Conclusion
A nation’s progress is typically demonstrated by its dedication to delivering opportunities for its citizens to become valuable members of society. Opportunities and well-paying job prospects are severely limited in a relatively poor country like ours, where resources are scarce and quite often misused. Our fellow citizens who work as plumbers or electricians, maintenance workers, teaching staff, operators, accounting professionals, general practitioners, and so on— are forced to seek work opportunities in other regions of the world, at the expense of their loved ones left apart. Ironically, the labor and sacrifice of Overseas Filipino Workers (OFWs) have significantly improved the lives of Filipino citizens, bringing some significant contribution to the economic security and well-being of our country.
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Read also: BRIA Homes Makes Homeownership Accessible to OFWs
Written by MC Sanchez
