Economic Efeect on Working Abroad

Topics: Philippines, Overseas Filipino, Economy of the Philippines Pages: 9 (2722 words) Published: March 5, 2013
OFW role in sustaining economy cited by study
Published on 15 October 2012
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The contributions of overseas Filipino workers (OFWs) certainly provided a mechanism for sustaining the country’s growth and have been extremely significant to the Philippine economy, according to a report from the National Statistical Coordination Board (NSCB).

In the report “Counting and Monitoring the Contribution of OFWs [The Nation’s New Heroes],” NSCB Jose Ramon Albert revealed that in a span of three decades, the number of deployed OFWs in 1975 have increased tremendously from 36,035 in 1975 to over a million by 2006.

As of 2010, the number of OFWs has been estimated at 1.47 million. In 2011, the total number of OFWs continued its rising streak, expanding by 15.4 percent during the year, with the land-based and sea-based workers showing a climb of 19.5 percent and 2.5 percent, respectively.

“The phenomenal rise in these figures clearly points to the high premium put by the world to OFWs,” Albert said.

He said that based on Philippine Overseas Employment Association records, OFWs listed the Middle East and Balance Asia as their most preferred work destinations in 2010, accounting for 60.9 percent and 25.0 percent, respectively of the total deployed OFWs.

Compared to the 2000 deployment figures, preferences for work destinations in 2012 declined for Balance Asia and Europe, but increased for the Americas and the Middle East countries.

“It is worth noting that the Middle East countries hosted most of the OFWs in 2000 at 44 percent which even soared to 60.9 percent or more than half of the total number of OFWs in 2010,” Albert added.

Saudi Arabia and United Arab Emirates were the top country of destinations in the Middle East in 2010, while Hong Kong and Singapore were the favorite work places in Asia.

The NSCB chief noted that the estimated total count (1.470 million) of OFWs deployed in 2010 represent about 4 percent of the total number of employed persons in the country, which was reported at 36.488 million people persons by National Statistics Office’s October 2010 Labor Force Survey.

Contribution of GNI
Meanwhile, the compensation received by OFWs as estimated by the NSCB showed continuing increases resulting in higher estimates of the Gross National Income (GNI).

“The GNI represents the Gross Domestic Product [GDP] after accounting for the net primary income from abroad, composed mostly of the compensation of OFWs, aside from the property income and property expense recorded as part of the income of the economy from the Rest of the World [ROW],” Albert said.

He said that for 2011, its nominal value was 3.35 billion, contributing 26 percent to the GNI.

“Undoubtedly, the increasing number of OFWs improves the country’s GNI as estimates of compensation continue on an increasing trend, contributing on the average a share of 22 percent to GNI,” Albert added.

Remittances data as reported by the Bangko Sentral Ng Pilipinas has always been claimed to boost the GNI, as this contributes to higher estimates of household final consumption expenditures and gross capital formation.

In 2011 alone, OFW remittances amounted to $20.11 billion, or P871.25 billion, about 6.8 percent of the country’s GNI for the year.

The NSCB chief stated that with a population of 94.2 million in 2011, the Philippine economy expanded at a growth rate of 4.7 percent annually from 2000 to 2011.

The Net Primary Income (NPI) from abroad recorded a share of 17.2 percent in 2000, which escalated to 32.6 percent in 2010 and 31.7 percent in 2011.

“On the average, GNI grew by 5.8 percent during the period, 2000 to 2011. With the continued increase in GNI, NPI from the rest of the world likewise prospered, exhibiting an annual average growth rate of 10.7 percent in the same period,” he added.

On the other hand, Albert also asserted that while statistics clearly show the contribution...
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