KASAMA Vol. 12 No. 3 / July-August-September 1998 / Solidarity Philippines Australia Network

Graphic: Philippine Migration Review Vol.1 No.3 September 1986

The Crisis of Philippine Overseas Migration

A paper presented by KAKAMMPI (Association of Filipino Migrant Workers and Families) at the workshop on "work, identity, security", 2nd annual conference on alternative security in Asia Pacific: prospects and dilemmas, Bayview Hotel, Manila, 22-24 July 1998

The Philippines, like the United States, Japan and Europe, has a huge capital exposure overseas from where it derives substantial returns. With the onset of globalization, our country is keeping constant watch over the impact of international economic restructuring on its capital ventures overseas.

Yes, the Philippines is one of the largest exporters of capital. But unlike financial capital (which probably is the most undignified form of capital), our overseas exposure comes in the form of human capital - nearly seven million of them spread in 181 countries and destinations worldwide. They now constitute about 10% of our population or nearly 20% of our productive age population. Of these, 4.2 million are classified as overseas contract workers (OCWs) who work for fixed terms of six months to two years. Government statistics place annual departures at over 700,000 and still increasing.

Filipino migrants also constitute part of the excess labor force in the Philippines. Unwanted by the local economy, Filipinos are forced to seek employment overseas, unmindful of the onerous contract terms and risks, if only to escape poverty and joblessness at home.

In 1995, we computed the job scarcity ratio in the Philippines at 69% of the actual labor force ('actual' means that housewives, unpaid family workers and the disabled have been included). Today, this ratio could reach at least 75% considering the unemployment rate increased 5 percentage points over the last 3 years (from 8.3% in 1995 to 13.3% in the first quarter of 1998).

It is, therefore, very easy to understand why there is a compelling reason to send our own people abroad. Otherwise, the local economy has to contend with an additional 4.2 million people needing jobs at home. Successive governments from Marcos to Presidents Aquino and Ramos recognized this imperative and engaged in aggressive labor export. President Erap, in his usual candid simplicity, was emphatic in saying that at the moment, we cannot repatriate our contract workers. Even NGOs and academics recognize the problem and opted instead for a phase-out of the labor export program.

Averting a potentially explosive employment crisis at home is just half of the story. Just days before former President Ramos stepped down, he admitted that income remittances from abroad saved the Philippine economy from virtual collapse. And he could be right.

Consider the following:

In 1997, Filipino migrants remitted some $5 billion in precious foreign currency. This amount easily doubles to $10 billion if remittances through non-banking or informal channels are factored in. This amount is about 18% of our Gross National Product and is nearly the same as the contribution of the entire agricultural sector. For more than a decade now, income remittances from overseas have kept the Philippine economy afloat. If these were used to pay our foreign debt, we could emerge out of the debt trap in just four years.

We are caught in a vicious migration trap. Our economy has become overly dependent on overseas employment, perhaps in the same way that it is dependent on foreign capital and foreign debt. Even the IMF is not happy with this situation and warned developing countries, including the Philippines, not to depend so much on income from overseas. The IMF could be right this time, although for the wrong reasons.

For many years, the country's labor export program flourished because of the high demand for foreign workers badly needed to implement ambitious economic programs in the host countries. In the 1970s, the Middle East provided a vast market for Filipino workers. This was complemented by the increasing demand for service workers, particularly domestic helpers in Europe, Canada, Hong Kong and Singapore.

The East Asian economic boom of the late 1980s and 1990s attracted hundreds of thousands of migrants from the poor countries of the region. It provided an alternative market for Filipino workers after the noted slowdown in the Middle East and the increasingly restrictive immigration policies in Europe and the global North. The Philippine government had been so aggressive in its job hunting missions that it was able to send Filipino workers to as far as Africa and the Caribbean and the micro States of the Pacific.

Over the last two decades, there has been a noted shift in migration patterns as mentioned above. The shift is not only true in terms of destination, but in terms of job categories as well. Since 1995, over half of land-based deployments involved Filipino women. In 1975, women comprised a mere 12% of annual deployments. The feminization of contract work is an immediate consequence of the marked decline in the construction and other traditional industries and the increased demand for service workers, notably domestic helpers and entertainers.

Today, the situation may have changed dramatically. We note a significant contraction of the labor market worldwide, affecting particularly the migrant workers. The Asian crisis has only exacerbated an already volatile situation, threatening massive displacement for migrant workers on a regional scale. In the last 12 months, South Korea, Malaysia, Thailand and Singapore mounted sustained crackdowns on illegal migrants even as they warned foreign workers of mass lay-offs if the situation does not improve.

In Malaysia, the Filipinos and Indonesians took the first blow in the aftermath of the financial crisis. Some 5,000 Filipinos have been sent home since then. Meanwhile, Prime Minister Mahathir has formulated a new development thesis saying that over-dependence on foreign workers may mean the loss of their freedom and that no country can sustain its development so long as it depends on "mercenaries" (referring to migrant workers).

In Hong Kong, employers are firing their domestic helpers to save money as they contend with recession and rising unemployment. Japanese are spending less on entertainment which means lower incomes and possible dismissal for thousands of Filipino entertainers.

The threat of displacement is not only confined to the East Asian region. Everywhere, there is a noted trend to get rid of migrant workers by restrictive immigration policies, encouraging nationals of host countries to take on the jobs of migrants and by discouraging the employment of foreign workers.

In the Middle East, the Gulf countries (Qatar, KSA, Kuwait, UAE, Oman, Bahrain) have embarked on a nationalisation program to restrict jobs available to foreign workers. They are also considering measures to make recruitment of foreign labor more expensive and to force the private sector to give jobs to their own nationals. Most European countries are imposing new immigration rules that severely restrict the entry of foreign workers and refugees. Countries like the Netherlands have increased the number of years of marriage as part of the requirements for full legalization of migrants marrying European nationals. As Europe moves closer to full integration, more discriminatory barriers are imposed on the entry and movements of foreign workers.

The United States, Canada and Australia are also cutting on welfare support to foreign nationals and considering stricter measures to substantially reduce the number of new entrants into their countries.

It is quite ironic that while the world is seriously working to liberalize the flow of capital and commodities, it is erecting even higher barriers to restrict the movements of people across national borders. And as the world confronts a brewing global recession, Philippine overseas migration faces a serious debacle. Job insecurity haunts the millions of Filipinos working overseas. They have become even more vulnerable to abuse and exploitation as employers and host states systematically take advantage of their insecurities. They are constantly threatened with dismissal and displacement. Yet, there are no jobs waiting for them back home.

24 July 1998

From: Kakammpi, 70-1 Matahimik Street, Teacher's Village, Diliman, Quezon City, Philippines.
Tel/Fax: 435 4533 - Email:

Graphic: Grace de Jesus Sievert, Isis International, Manila