MANILA–NOW’S the time to leverage a huge potential for Philippine development: remit-tance of overseas Filipinos, which an economist described as real People Power-inspired investment.
“As it was after the People Power uprising 25 years ago, the money of overseas Fili-pinos was larger than foreign direct investments at three percent of gross domestic product as against an FDI-to-GDP of less than two percent. This buffered a balance of payments problem that could have been severe that time,” Alvin Ang of the University of Santo Tomas said.
Ang spoke to the OFW Journalism Consortium two days before government commemorated a protest 25 years ago that ousted then-President Ferdinand Marcos and brought to power the mother of current President Benigno Simeon Aquino III.
He noted that even if the size of OFs was still small at around 360,000 in 1986, the money they spent helped an economy described by Ibon Foundation Inc. research head Jose Enrique Africa as a hostage by a few wealthy families.
“Politically, Filipinos were emboldened to oppose the Marcos dictatorship upon years of determined struggle… Economically, people saw that a handful of local and foreign elites were prospering amid high un-employment and widespread poverty,” Africa said in an electronic mail.
Ang said that had there been an absence of remit-tances from OFs, the BOP crisis could have been more severe because of the myriad requirements for import cover.
Ang cited a World Bank estimate of the size of savings by overseas Filipinos as cue for government to begin ways of luring these funds for investment in view of an estimated BOP deficit of three percent of GDP this year.
The estimated US$21.1 billion worth of “diaspora savings,” says a February 1 World Bank brief, is “huge,” and thus there is no reason why rural areas should not respond to such huge resource which their town-mates based abroad have, Ang said.
“These people abroad have ‘hometown empathy’, so it’s logical for them to invest their remittances in the places where they come from and where their families are. That’s People Power economics, if I may say so.”
THE economist’s purview on hometown investment is in response to a “preliminary estimate” of what WB eco-nomists Dilip Ratha and Sanket Mohapatra call “diaspora savings”.
Ratha and Mohapatra’s estimate of diaspora savings in 2009 puts the Philippines as fourth biggest behind Mexico (US$46.9 billion), China (US$32 billion), and India (US$31 billion). These four countries are the world’s biggest recipients of migrant remit-tances.
(To be continued)