RIYADH, 12 June 2004 — Overseas Filipino Workers propped up the Philippine economy with remittances of $53.43 billion to the Philippines between 1984 and 2001, according to a report of the Foreign Service Institute.
Land-based workers brought in 88 percent of the amount while sea-based workers remitted the remaining 12 percent. In 2001, the OFWs’ total foreign exchange remittances of $6.03 billion represented and eight-percent share in the country’s GNP.
“In the same year, remittances corresponded to 25 percent of export earnings, significantly trimming down the gap between exports and imports,” the report said.
As a labor-exporting economy, the Philippines to a large extent counts on the billions of dollars of foreign exchange remittances from OFWs every year. These remittances have eased the country’s budget and trade deficits, offset the foreign exchange outflows and financing capital expenditures and prompted the country to elude negative growth during the height of the Asian crisis.
The country has deployed over 7.5 million OFWs around the world in the last ten years. In 2001, there were 866,590 jobs filled by Filipinos abroad, a three-percent increase from the previous year. The batch consisted of 661,639 land-based workers and 204,951 sea-based workers, or those employed in vessels engaged in maritime navigation.
The year encountered a heightened demand for high-end skills such a nurses and technical professionals who found employment in the United States, United Kingdom, Ireland and the Netherlands. Saudi Arabia was the top destination of the land-based OFWs. The growing migration of workers to neighboring countries in Asia also placed Hong Kong, Japan, Taiwan, and Singapore among the prime countries of deployment of OFWs.
Filipino workers’ migration has been due to economic difficulties at home.
“Even as the government constantly struggles to create job opportunities for Filipinos, the economic system still fails to absorb more workers. The unemployment rate averaged close to 10 percent for the period 1981 to 2001, and fluctuated between 7 and 10 percent from 1991 to 2001, almost twice the level in some neighboring countries,” the report said.
In a world of escalating globalization, many Filipinos are exposed to the employment opportunities available beyond the geographical limits of the Philippines. Overseas migration of a significant amount of Philippine labor has now become a legitimate option for many of the country’s work force.
Employment
The Philippine labor force is defined as Filipinos 15 years old and over who contribute to the production of goods and services in the country. The labor force has a pool of 33.35 million Filipinos, or a participation rate of 67.5 percent. In 2001, more than 2.4 million new job seekers joined the labor force, which had increased by more than seven million since 1992. This translates to an average annual growth rate of 2.9 percent in the last ten years, which means that an average of 811,000 Filipinos entered the labor force every year since 1992.
The Philippines has a large cost-effective, highly skilled and trainable pool of human resource. With a literacy rate of 94 percent, a huge portion of the population speaks fluent English. In addition, the trend in the national pass rate for licensure exams was on the rise from 44.39 percent in 1999 to 47.97 percent in 2001.
The number of employed Filipinos in 2001 was 30.08 million, an increase of 2.3 million or 8.3 percent from the previous year. The optimistic growth of jobs generated in 2001 demonstrates that in spite of the global economic meltdown, the Philippine economy remained fundamentally sound. More than 6.2 million jobs were created since 1992, or a yearly average increase of 2.8 percent. This means that an average of 711,000 Filipinos found employment every year in the last ten years. Sixty percent of the employed are male and 40 percent are female.
A majority of Filipinos find work in the services sector, which has a share of 47 percent in total employment.
The services sector’s stake in employment rose to this level from only 39 percent in 1992, bolstered by the proliferation of workers in the communications and transportation subsectors. Employment in agriculture ebbed through the years with its share of total employment receding from 45 percent in 1992 to 37 percent in 2001.
Finally, 16 percent of total employed Filipinos work in industry, whose share in total employment steadied around 16 and 17 percent in the past ten years. Industry’s biggest employer is the manufacturing subsector, which captures 10 percent of total jobs in the Philippines.
But the growth in employment in recent years has not been sufficient to accommodate the even faster growth of the labor force. For this reason, the unemployment rate remains high in the Philippines. Unemployment averaged 2.63 million Filipinos every year, or an annual average unemployment rate of 8.9 percent. The unemployment rate peaked at 10.1 percent in 2000, when the economy lost 1.23 million jobs largely attributed to a flagging performance of the agricultural sector. In 2001, the unemployment rate slightly lowered to 9.8 percent of the labor force, representing 3.27 million Filipinos who were out of job in the year. Although the labor force is about evenly divided between the urban and rural areas, the urban unemployment rate is almost twice as high as the rural unemployment rate. The unemployment rate in urban areas was 12.8 percent in 2001, while the rural rate was only 6.9 percent.
Aside from the long-standing problem of unemployment, one dilemma that has been consistently confronting the Philippine economy is underemployment. Underemployment occurs when employed people want additional hours of work in their current job or a new job with longer working hours. In 2001, underemployment was estimated at 16.6 percent of employed Filipinos. This demonstrates that many employed Filipinos have low-paying and less than full-time jobs. Underemployment generally prevails among non-agricultural jobs in Metro Manila.
