Dividend from labor migration mulled (Last of Two Parts)

WHAT the Philippine results of the Globalization Index also revealed was that the “value of people” was recognized the most.

The Globalization Index computed the rankings on “remittances and personal transfers” based on the total volume of remittance inflows and other transfers, with data based on the International Monetary Fund’s Balance of Payments. The total of these two inflows were then divided to countries’ total gross domestic product (GDP).

The 2007 Index saw one of ten countries that are new entrants into the survey, Jordan, ranking first with a 24.19 percent remittances-to-GDP ratio. The Philippines’s ratio is 14.52 percent for second place, while Ghana, another new entrant into the Index, is third with a 14.45 percent.

So in terms of percentage to GDP, even with today’s improving value of the Philippine peso, the dollar value of remittances to the dollar value of GDP remains high, Ang says.

“And so is our dependency to remittances,” he adds.

Looking at the Index’s data on remittances vis-à-vis GDP, Ang noticed that the ratios for the world’s top two remittance-receiving countries, India (3.32 percent, for 32nd place) and Mexico (2.90 percent, for 35th place), are not that high.

This means, Ang explains, that these countries “still rely internally-generated economic production” –unlike remittance-driven Philippines.

The sustainability of such a situation for the Philippines is the next question, Ang says, if the country experiences a drop in workers’ deployment and remittances receipts.



THE concept “diasporic dividend” is also in the writings of University of East London visiting fellow Dr. Ken Ife, an African national.

His paper titled “The Diaspora Dividend” outlined the potentials investments by the African diaspora in Europe, Middle East, and North America in the continent’s small-and-medium enterprises (SMEs).

Ife calls the diaspora Africans “sleeping giants (coming from) a land of immense economic, social and political opportunities”.

Some six million of them in the US, for example, have contributed US$1.1 trillion to the economy of the United States, while remitting only US$45 billion to African homelands.

Ife’s line of thinking is what Ang hopes as the Philippine “diasporic dividend”: overseas workers return to the country as producers “who can sell products to the rest of the world”. This is even if the Philippines, says the economist, has yet to feel that “net of net” benefit from her army of citizens in 193 countries.

Some economists, like Dr. Bernardo Villegas of the University of Asia and the Pacific, attribute what they call a “demographic dividend” to the contributions of overseas-based Filipino population in terms of remittances and some savings and investments.

Demographers such as those in the Commission on Population define the demographic dividend as country’s opportunity to achieve faster economic growth when fertility rates are down, the labor force increases than the pool of dependents, and many workers are gainfully employed.

However, PopCom’s recently-released primer of the Fourth State of the Philippine Population Report said that while international labor migration should have brought the country closer to this demographic dividend, the Philippines remains to have high unemployment rates, a low value of the difference between domestic savings and investments, high number of dependents, and limited number of jobs.


THE country can achieve that demographic dividend, the PopCom report says, through internal means: reducing population growth rates, increasing domestic job generation, directing people’s savings to investments, and improving the quality of the labor force.

But while overseas migration has yet to bring about a Philippine demographic dividend, Ang says the country’s policymakers should now find a way to achieve a diasporic dividend.

His equation for this is return migration as an instrument to buoy domestic trade and investment, and the country packaging products both for Filipinos abroad and the markets within the countries where these Filipinos are.

This is a way, he says, the country can capitalize on globalization, and make trade –not just migration– the engine that will sustain the Philippine economy.

Thus, demography can possibly work for the Philippines given the global spread of the Filipino diaspora, says Ang.

“We can possibly conquer the world,” Ang said. “But the question is, what can Filipinos produce now that can be sold to the rest of the world?”  

Table 1: Rankings of the Philippines in the Annual Globalization Index

Per-category rankings    2004     2005    2006    2007

Overall rankings              32     33     31                 38

Total number of countries surveyed     62        62              62        72

Economic Integration                                    32         28        26                   41    

* Trade    16         15         14                   24

* Foreign Direct Investments    44                       55        50        63

* Portfolio Investments    32         Not anymore part of the annual index

* Investment Income       36        Not anymore part of the annual index

Personal Contact    20           14                     10                   14

* Telephone    39                        41           47                   54

* Travel    51                      51                     51        60

* Remittances and Personal Transfers         1                        2                       1                     2

Technology    47                          49                     52                   61

* Internet Users        48        49                     52             62

* Internet Hosts    48        48                     47          52

* Secure Servers                                          46        47        45                   51

Political Engagement    51        42                      43        49

* International Organizations                  50         17                      11                   13

* United Nations Peacekeepi                   48        51                      47         52

* Treaties       9         28                      31                  40

*  Government Transfers                         47         41                      28                  37