RIYADH, 24 May 2004 — Sophisticated people tend to look for sophisticated answers, and that often leads them to miss a solution that is staring them in the face due to its simplicity. Also, a lot of financially savvy people both in the public and private sector talk about issues they do not really understand.
For instance, the economic planners and decision makers in the Philippines talk about the billions of dollars overseas Filipinos remit every year to their families as an important anchor that has helped keep the Philippine economy afloat through the years.
What they have overlooked, and keep overlooking, is that the seven million or so overseas Filipino population is a huge potential source of financial capital from outside the country. Filipinos overseas have huge amount of assets and deposits abroad that, if harnessed effectively to be invested in the Philippines, are better than the foreign-owned capital that the government has been assiduously courting by providing all sorts of incentives, even at the expense of local investors.
Capital and profit from overseas Filipinos are better in the sense that these will remain in the country, not repatriated at some point, as in the case of foreign-owned capital. Also, if the profit is plowed back into the economy, it will generate additional economic activity that can lead to more, and so on and so forth.
Not only that; the overseas Filipinos’ capital can add some stability to our financial market because they will not chicken out and run when faced with the slightest sign of economic disturbance. What a Filipino can just shrug off or take in his stride could make a foreign investor cower in fear, leading to capital flight and instability in the economic front.
Officials in government and financial experts at home keep telling overseas Filipinos to invest their dollars in the country but what they fail to see is how can we possibly do that when we are abroad.
Why would we bother to transfer our hard-earned savings home only to deposit it in a bank when we find it more secure to do that abroad, with the interest rate higher and no tax levied on interest income earned?
It is a different story, however, if we are presented with a proposition that is both financially and psychologically attractive, such as ownership through shares of stock of a relatively safe business entity like the NAIA Terminal 3, United Coconut Planters Bank, San Miguel Corporation, and other entities that we know and fully understand.
In the case of the NAIA Terminal 3, the government can negotiate with the owners to acquire it and then sell it to overseas Filipinos through shares of stocks. In the case of UCPB and San Miguel Corporation, of which government has significant ownership, it is just a matter of packaging and selling it to overseas Filipinos.
The government could even make it more attractive psychologically if the name of the UCPB is changed into The Overseas Filipinos’ Bank.
San Miguel Corporation will sell like hotcake on its own merit.
It would definitely entail more work raising, say, $7 billion from 7 million Filipinos at $1,000 each rather than from just 7 foreign investors at $1 billion each. But it is well worth all the effort if we look at it from a different perspective and consider all the downstream benefits that would flow from the investment of overseas Filipinos.
The greatest benefit could be the reduction in the social cost of migration if, by giving overseas Filipinos investment opportunities, we could improve our economy enough, enabling us to greatly reduce the number of Filipinos seeking jobs abroad.
The bottom line is that the government and the economists at home have to change their mindset regarding overseas Filipinos, from the lowly OFWs that always figure in the newspapers needing government assistance and protection abroad to potential big time investors just like foreign capitalists, albeit not individually but as a group.
• Miguel Bolos, a finance executive in Riyadh, is an active campaigner for migrant Filipino workers’ rights and concerns. Apart from participating in community activities to help distressed OFWs in the Kingdom, he sponsors scholarships for “poor but deserving” students from his hometown in Guagua, Pampanga.