Can local private sector help reverse PHL’s migration addiction?

by Jeremaiah M. Opiniano

MANILA—SOME of President Aquino III’s remarks in his recent State of the Nation Address are inciting an aspiration that going abroad for work will not be a forced option for many Filipinos.

“Before, (Filipinos’) foremost ambition was to work in another country. Now the Filipino can take his pick. (For as) long as he pursues his dreams with determination and diligence, he can realize them,” Aquino said.

As the Aquino government brandished the 1.4 million local jobs generated in 2010, and as the 2011-2016 Philippine Development Plan is targeting a million local jobs annually, is overseas labor migration by Filipinos something that can be reversed in the future?

Two weeks prior to the SONA, Socioeconomic Planning Secretary Cayetano Paderanga Jr. authored the 86-page publication “Private Sector Assessment: Philippines,” published by Asian Development Bank and was launched in mid-July. While the report talked about how the Philippine private sector can contribute to economic growth and generate jobs, Paderanga tackled the overseas migration phenomenon in the country.

Reversing labor migration in the future is possible but Paderanga says this “depends on what the government aims to do” particularly on development agenda such as employment opportunities, population policies and projects of economic growth.
Paderanga is banking on the private sector to help reverse the country’s addiction to overseas labor migration, even if doing so may take a long time.

“The debt overhang means it will take longer before labor migration can be mitigated; it could even be reversed, especially if the private sector can be expanded,” he said.


Paderanga himself admits the bottlenecks to make this reversal happen.

For one, the “woeful science and technology budget” is a concern since the existence of good laboratories will entice Filipino engineers and scientists abroad to return to the country.

Other important issues, Paderanga wrote, to make the reversal occur included good gov ernance that results in prudent fiscal spending and revenue generation.

“Traditional weaknesses such as lack of infrastructure and rule of law, a weak finance sector aggravated by national government competition with the private sector for access to investment funds, and the high cost of doing business still abound to debilitate the private sector,” he wrote.

Paderanga has found the rising inflows of overseas Filipinos’ remittances as good news as these contributed to “significantly higher” average gross domestic product (GDP) growth in recent decades, as well as increases in the national savings rate and the volume of the country’s dollar reserves.

The strong inflow of foreign currency and purchasing power, Paderanga noted, “have substituted for investment and export growth, which have been lackluster”.

And the private sector “less than healthy,” he said.

“As a result, the manufacturing sector is hollowing out and industry has been growing in consumption-oriented activities, while the service sector is expanding tremendously. The composition of exports and the rest of the industry point to a private sector that is less than healthy.”


Paderanga”s ADB report recommended the following measures to accelerate the role of the private sector in development:

  • Focus on physical interventions on completion of integrated national road, maritime, communications, and other basic networks and integrating these with industrial and geographic development programs such as tourism and regional plans;
  • Enhance and level the access to markets, credit, and basic services, including justice, across industries, regions, and firm size;
  • Design interventions toward reducing the cost of doing business;
  • Devolve administrative services and decision making to lower levels of government;
  • Use modern technology and techniques to facilitate governance and administrative  process; and
  • Ensure inclusive growth to promote long-term social investments and mitigate social pressures.

The Philippines is the 11th largest shareholder and the fifth largest borrower in the ADB, as well as one of the bank’s largest clients for private sector lending and equity investments.

While Paderanga’s ADB report discussed the economics of migration vis-à-vis Philippine growth, there is no mention about how to harness the remittances from overseas Filipinos for development.

According to chapter 6 of the 2011-2016 Philippine Development Plan, which Paderanga’s agency produced, the government will pursue efforts related to financial literacy, investment and savings programs for overseas Filipinos. (OFW Journalism Consortium)

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