FEATURE/ESSAY: Crisis continues to haunt OFW families

MANILA—GOOD things never last; bad things linger.

So says two economists on the impact of the US economic recession on the cash position of overseas Filipino workers and their families.

Based on their survey of 107 respondents in Metro Manila, Alfie Maria Custodio of Notre Dame of Dadiangas University (General Santos City) and Alvin Ang of the University of Santo Tomas said OFWs and their families are still reeling from the impact of the crisis.

Nearly three-fourths of respondents cut their spending on food (22.2 percent said so) and recreation (24.4 percent).

Ang and Custodio said these cut-back on spending accrue to the respondents’ view that their savings decreased (60.6 percent said so) as remittances also dropped (45.2 percent said so).

The crisis, which “is still moving across the world…has negatively affected OFW families left-behind through decreases in income, remittances and savings… [thus reducing] consumption and (increasing) debts,” the economists said in a recent forum by the Philippine Statistical Association.

Custodio’s and Ang’s paper also found that the crisis’ impacts on the Philippines include rising prices of commodities (81.9 percent), decreasing family income (45.7), and worsened unemployment (39.0).

Host countries where the OFWs work, for their part, experienced increasing risks for job displacement (64.5 percent), rising prices of commodities (40.2), worsened unemployment (31.8), and decreased savings (29.9), the paper also found.

Custodio and Ang also found that the overseas-based dependents of surveyed OFW families also did not return to the country (67.3 percent); out of this specific group of crisis-hit OFWs, nearly half looked for other jobs.

Custodio and Ang’s survey came at a time when neither are there reports of OFWs displaced by the global economic crisis nor definite figures of how many were affected by the crisis.

The economists’ survey and report are the current empirical data on the crisis and OFWs’ resiliency.

Other data available from the Philippine government comes from the National Reintegration Center for OFWs (NRCO) and the Overseas Workers Welfare Administration (OWWA). Consolidated data from both agencies revealed some 12,117 OFWs reported they were displaced in 2009. Most of them said their employers in Taiwan and the United Arab Emirates cited the crisis as reason for shuttering businesses or cutting labor costs.


CUSTODIO and Ang said that because of the crisis’ impact on OFWs, their families in the Philippines had to come up with ways to cope.

Respondent OFW families cited seeking extra jobs by household heads (16 percent), stopping allocation for savings (13), seeking help from other relatives (8.5) or incurring more debts (6.6) as coping strategies.

But while OFWs’ continued resiliency “has somehow cushioned the impact” of the crisis on OFWs, Custodio and Ang caution that “resiliency has its limits.”

However, economist Renato Reside of the University of the Philippines is not worried.

In the same PSA forum, Reside pooh-poohed the strength of the crisis.

Likewise, he allayed fears that the Philippines will still be hit hard by the global economic crisis.

Reside’s own paper on how remittances are affected in times of crisis mentions that an economic crisis’ real impact happens two years after, or what he calls as the “lagged effect”.

Reside’s own econometric computations saw this lag effect of a crisis on remittances during the 1997 Asian Financial Crisis, thus in 1999.

The Philippines “has averted” this lag effect, he said.

“We have gone past it already, and things are going to recover. Don’t worry too much anymore,” he added.

Reside said the marketing efforts for overseas jobs in 2009 by the Philippine Overseas Employment Administration’s (POEA) as well as the fiscal stimulus of migrant workers’ host countries “saved the day”.

Custodio and Ang recommend that government should “continue assessing the impacts (of the crisis) at the level of individuals, households, and communities” to improve social protection endeavors to vulnerable workers.#