Filipino Remittance
Each year, millions of global emigrants from the Philippines send billions of dollars in aid back home. Even in 2020 – a year of notable economic turmoil, Filipinos leveraged low fees and favorable currency exchanges, sending nearly $35 billion in remittances. Currently, the Philippines is ranked fourth in the world by money received from overseas, just behind India, China and Mexico. Filipino remittance is a large boon for many facing poverty in the Philippines. Throughout the pandemic, more than 2 million Filipinos fell into poverty, raising the poverty rate to 18.1%. During this period, severe job loss occurred, along with a sharp decline in tourism and a rapid rise in inflation. Even the number of workers going overseas decreased, placing more pressure on Filipinos already established and working around the globe.

Now, Filipinos continue to look to family living outside of the Philippines for support as the country attempts to recover from the pandemic.

A Brief History of Remittances in the Philippines

Though the roots of Filipino labor migration go back to the 17th century, the Filipino government began supporting the practice in the 1970s. At that time, rising oil prices were creating economic problems in the Philippines. However, the oil-rich Gulf countries needed workers to build infrastructure. The Philippine government established an overseas workers program with these countries to make use of the nation’s excess laborers.

During this period, it was men working in construction that made up the majority of Overseas Filipino Workers (OFWs). However, women soon took the lead. They rose to prominence as the demand for teachers, nurses, domestic workers and entertainers increased.

OFWs commonly send money from their paychecks back home to family, becoming a significant part of the Philippine economy. The World Bank has noted that remittance started at 1.5% of the nation’s GDP in 1977 and has risen since, peaking at 12.8% in 2005. In response to the growth of Filipino remittance, some Philippine businesses, like LBC Express, opened storefronts around the world to help OFWs send money and goods directly back home.

In recent years, the Philippine government has decreased programs encouraging citizens to work outside of the country. The government said it wants the decision to work abroad to be a choice instead of a necessity. Regardless, Filipino remittance remains high.

Filipino Remittance in the Modern Day

Remittance remains a strong part of the Philippine economy — most recently making up 9.6% of the nation’s GDP in 2020. However, the geographic concentration of workers sending money home has shifted to the West. In 2020, Filipinos living in the United States sent the most money back to the Philippines. Remittances from workers in the Gulf countries dropped by as much as 36% from their 2015 peak.

Yen Osborne, a moderator of the Facebook group “Filipino Community in Illinois,” spoke with The Borgen Project about her thoughts on remittance and its role within her online community. “It’s a great benefit to the families attending their financial needs,” Osborne said. According to her, it is normal for Filipinos to send a monthly allowance to their families living in the Philippines using a variety of online services and bank-to-bank transfers.

Osborne also raised concerns about the negative effects of people in the Philippines becoming reliant on remittances. “The bad side is people are getting lazy knowing they have a family member who sends them monthly [money],” Osborne said. At the same time, with exception of the pandemic, the Philippines’ economic growth has risen. According to the World Bank, the Philippines’ average economic growth increased to 6.4% in 2019, while foreign remittance in the country’s GDP grew to 9.3%.

Osborne concluded that remittance is ultimately a positive part of Filipino life. For her, it’s a part of “Filipino culture where we help our families.”

–  Ryan Morton
Photo: Flickr

Overseas Filipino Workers
Travel enthusiasts and visitors often cite Dubai as the most dazzling city in the Middle East. Yet amidst all the glamor and luxury in the United Arab Emirates, migrant workers face immense wage inequality and abuse. One of the largest populations of migrant workers hails from the Philippines. Filipino laborers undertake a variety of service jobs in domestic work and hospitality, both of which are vital sectors of the Emirates economy. Yet despite their integral role in the financial stability of the Emirates, Overseas Filipino Workers (OFWs) struggle with a lack of job security and often have no choice but to return home. The economic hardships of COVID-19 have only exacerbated their struggle.

UAE Migrant Demographics

As of 2019, immigrants comprise nearly 90% of the United Arab Emirates’ total population. This is largely because Dubai offers a variety of policies to attract global businesses and international professionals. For example, Dubai established 30 tax-free regions of the city for companies to operate free from restrictions. The Kafala Sponsorship System allows workers from around the world to more easily access job opportunities in the Emirates, but this program has also created conditions in which migrant workers face increased vulnerability and potential risks.

The United Arab Emirates operates as a mixed free economy. Although oil sales comprise the majority of its income, the UAE has branched out into the vacation industry as well as the automation and telecommunications sectors. The expansion of economic sectors such as hospitality, development and trade in the United Arab Emirates have made employment more accessible for blue-collar migrants. The Filipino government in particular has supported labor migration for its citizens, with the Labor Code of the Philippines promoting protections for OFWs. Currently, over 2 million Filipino migrant workers are in the Middle East.

Wealth Disparity

In recent years, the severe maltreatment of Filipino workers in the United Arab Emirates has forced the Department of Foreign Affairs in the Philippines to repatriate thousands of its citizens. Several of these individuals suffered abuse from their Dubai employers or were victims of human trafficking.

Household workers, who are usually female, make up 10% of Filipino migrant workers. Among female Filipino domestic workers, sexual abuse and mistreatment are unfortunately quite common. Due to the vulnerable financial and legal status of female Filipino domestic workers, this particular segment of migrant workers often experiences abuse. The Filipino government responded to this by repatriating such female workers from the United Arab Emirates.

Solutions for Overseas Filipino Workers

The Philippines Overseas Employment Administration (POEA) advocates for OFWs’ rights and addresses the concerns of the transnational community. The Overseas Workers Welfare Administration (OWWA) provides programs for migrant workers and aims to prevent potential abuse.

Filipino migrants in economically valuable positions can effectively produce a change for their community. Educated Filipino migrants make up over half of the Filipino migrant population in the United Arab Emirates. As such, they are economically essential to the country’s labor force. Approximately 47% of Filipinos have climbed the ladder to higher positions. These individuals are paving the way for a new rank of Filipino professionals to represent the OFW community.

Generous Filipino residents within the UAE work tirelessly to assist their fellow community members throughout the COVID-19 pandemic. Thanks to the service of caring individuals such as Dela Peña, unemployed Filipino workers still have resources to survive through the coronavirus pandemic and access to food through Dela Peña’s program, Ayuda.

Points of Resolution

Leaders of the United Arab Emirates often overlook the impact that OFWs have upon its economy. However, migrant workers have been pivotal to the growth and industry of Dubai and the nation as a whole. With this in mind, the UAE will hopefully recognize the importance of the OFWs and establish laws to uphold their rights. Supporting and encouraging the Overseas Filipino Workers in their endeavors will not only erase the need for their repatriation back to the Philippines but will further strengthen the economy of the migrants’ new home.

– Luna Khalil
Photo: Flickr