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Wednesday, May 09, 2007

Remittances Help Foil Asia Crisis Repeat, World Bank Study Says


MANILA—ACROSS the East Asia region sweeps the wind of prosperity and cash remittances as well as knowledge capital by migrant workers has helped economies become more robust a decade after a devastating crisis.
Aside from the Philippines, the World Bank cited remittances from workers overseas also helped other countries like Vietnam and Mongolia to beef up cash reserves. Hence, remittances could soften and may even foil a repeat of the 1997 Asian crisis –if ever there would be one in the near future.

“A decade after the financial crisis that devastated East Asia in 1997-98, the region is far wealthier, has fewer poor people and a larger global role than ever before. Led by continued strong growth in China, Emerging East Asia now has an aggregate output of over $5 trillion, double the dollar value just before the crisis,” said the WB report titled “Ten Years after the Crisis”.
The report noted that the economies affected by the crisis: Indonesia, Malaysia, Philippines, Korea, and Thailand, posted real per capita incomes “significantly” exceeding pre-crisis levels.
The WB noted that the first three economies achieved real per capita income growth of 3-3.5 percent, “with per-capita growth in Korea and Thailand averaging 4-4.5 percent” in the four years ending 2006.
The cause, in particular with the Philippines, is consumption or the purchase of consumers by what the country’s factories produce, retailers sell, and businesses import-for-sale from abroad.
“Consumers in the Philippines also increased real expenditures by 5-6 percent, supported in part by a 20-percent rise in remittances from abroad,” the WB said.
Compared with Thailand's 3.2-percent consumer-demand growth last year, the Philippines posted a 5.5-percent growth from just 4.9 percent in 2005. Both countries are regarded as developing economies compared to the four newly industrialized economies of Hong Kong, Korea, Singapore and Taiwan, China.
The bank noted that remittances, coupled with the strong performance of the Philippines’s electronics exports, “far outweighed the impact of higher imported oil prices on the current account”.
The country’s current account –available cash for loans, payment of debts, for investments, and others flowing in the system- jumped to a US$5-billion surplus last year from US$2 billion in 2005.
The percentage increase (to US$12.8 billion in 2006) in remittances, the WB added, underscores the vital role played by money from Filipinos working abroad.
“Through these flows [remittances and transfers for the balance of payments], which together account for over 13 percent of GDP [gross domestic product], large trade deficits have been transformed into current account surpluses, which in 2006 grew to over four percent of GDP,” the bank said.
A trade deficit would mean the Philippines buys more products from other countries than what it sells or exports.
Remittances may be one of the reasons why the Philippines, along with Korea and Malaysia, quickly “regained their pre-crisis level of per-capita income by 1999, while this took longer, till 2003, in Indonesia and Thailand,” according to the WB report.

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IMF Team Affirms Weak Links Between OFW Money, Investment


MANILA—A TEAM from the International Monetary Fund observed that remittances from an estimated eight million Filipinos abroad have not led to increased investments.

Ever since the country’s investment ratio has steadily declined since the 1997 Asian financial crisis, increasing remittances “has not increased investment,” IMF’s Ayako Fujita and Srikant Seshadri wrote in a policy analysis paper of selected Philippine economic issues done by a six-person IMF team.

IMF’s Country Report 07/131 (released last March) analyzed selected economic issues such as reforms in the value added tax law, an analysis of the economic contributions of the services sector, and credit growth and bank balance sheets in the Philippines.

Both Fujita and Seshadri were part of a six-person team that consulted Philippine economic planning and finance officials last January as part of the lender’s periodic consultations with countries.The weak links between remittances and investment is such even if middle-to-high income migrant families, whose main source of income is remittances from dependents abroad, are rising, says the IMF team.

The team cited data from the triennial Family Income and Expenditures Survey of the National Statistics Office, the same data that Milan Brahmbhatt and Dan Biller based their analyses for a report on East Asia for the World Bank.

Citing 1991 to 2003 data from the triennial FIES, the number of the two lowest-income migrant families receiving remittances declined from 60 percent in 1991 to 18 percent in 2003.Likewise, the top two income brackets among migrant families that count income abroad as their main source of income rose from 40 percent in 1991 to 82 percent 12 years after.

“Given that some 80 percent of (Filipino migrant) families that receive income from abroad as their main source are now middle and high-income families, it is much more likely now than in 1991 that the uses for this income go beyond consumption and subsistence, and are put toward saving and investment,” the IMF team’s paper wrote.

But the situation surrounding remittances and investments suggests that the lack of a relationship between investment and remittances “could indeed be transitory, and that going forward, one may see a pick up in investment in physical capital.”

The weak links between remittances and investment, however, also occurs in many remittance-receiving countries. “Country specific factors could determine whether a rise in external flows leads to greater consumption, including housing-related spending on the one hand, or greater investment in fixed capital on the other,”

In the case of the Philippines, the IMF team members observed that financial intermediation is a primary issue. “(Philippine banks are) still repairing their balance sheets, and are risk averse in the current environment,” IMF observed. But even if there were financial intermediation, the IMF team thinks that remittances as a percentage of gross domestic product should have increased by three percentage points, and this situation “might have a more pronounced effect on Philippine investment, which continues to decline.

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BPI joins fray to capture remittance from Pinoys in Europe


MAKATI CITY--BEFORE sliding to third position in the Philippine banking industry, Ayala family-led Bank of the Philippine Islands set its eyes on the profitable remittance market that Philippine National Bank previously dominated.
But with its shareholder hobbled by regulations in the United States, where bulk of remittances from some eight million overseas Filipinos go through, BPI settled for the United Kingdom.
This was what BPI president Aurelio R. Montinola III told stockholders during their annual meeting last March.“Why London, when you can target the United States where there are more overseas Filipino workers?” a shareholder echoed what would be expected questions from the banking industry.
“Certainly, we would like to have a branch in the US, but regulatory agencies would not allow us because of our partner, DBS, is not fully engaged in bank operations,” Montinola replied. Singapore's DBS Group, Southeast Asia's biggest bank, owns 20 percent of BPI. The rest of the shares are owned by Philippine conglomerate Ayala Corp., which also has assets and investments in real estate and water utility.
At the BPI stockholders’ meeting, executives revealed that the move to put up a branch in London, one of the world's financial centers, has been on the pipeline ever since the bank made inroads in the European remittance market.
According to its plans, BPI will shell out £20 million (or about P1.9 billion) to have a full service branch in London to beef up its remittance center currently based in Italy. Montinola said in March BPI expects to establish a UK-registered corporation in about six months, although the Financial Services Authority of London has already given BPI its British license to operate a bank last April 26.

“We are in the stage of finalizing our systems now. We are in one location and we need a second location [for technical purposes]. We expect that we would be in the pre-operation stage by about September or October this year and then, for next year, a full operation," he told reporters after the stockholders’ meeting.
“The whole point is to grow from remittance transactions to overseas banking relationships,” he added.

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Peso’s gain is OFW’s bane


MANILA—IN A remittance slip, there was an additional US$50 that Cesar Dimasupil’s daughter Arlene sent from London. But he remained stoic.

“That [money] would just even things out,” Dimasupil says of the dilemma that most families of overseas Filipino workers are facing under a stronger peso and a record-low inflation rate.

Dimasupil, like most Filipinos brought up in a male-as-strong society, says he doesn’t know if he should celebrate for getting the added money from something he said he shouldn’t have asked from his daughter in the first place.

“But what can I do? They say the strong peso could lead to lower prices. That hasn’t happened in the past months,” Dimasupil said.

The Dimasupil family shares the conundrum of a Philippine economy that a recent World Bank report said has been growing, in part because of the cash sent by nearly eight million Filipinos temporarily or permanently working or living abroad.In a report released by the WB last month, it noted that the stronger peso helped inflation rates to fall to 4.3 percent by end-2006 and to 2.6 percent by February this year.

Food and oil prices remained “relatively” stable, the WB said. Pummeled in recent years by political shocks to the economy and macro-economic anxieties, the peso appreciated by nearly eight percent against the US dollar in 2006, and strengthened further in early this year.It’s a cause celebre for most businesses, especially importers who can pay less from products they’re bringing in from abroad.

But for an economy that the WB said is relying on consumption, the celebration isn’t felt yet by OFW families here whose remittance receipt is boosting consumption.According to economist Fernando Aldaba, herein lies the risks of an economy relying much on remittances since many OFWs could also hedge on a possible uptick of the dollar.

To get full story, post your comment and leave your email address. You may also visit the OFWJC Website for updates.

Monday, May 07, 2007

The Poor Giver: Charity Group Founder’s Woes Hobble OFW Philanthropy


CALOOCAN CITY—ON A side street of a biscuit factory here the smell of spoiled food, re-used cooking oil, murky wastewater, and sweat of a hundred laborers mixes with the fluttering haze of Maria Luisa Tayco’s dreams of migrant giving.
It is here where Tayco, recipient of the Singaporean community’s Golden Samaritan award, faces up to the reality of life after 14 years of working near Raffles’ Center and seven years of charity work on Bayanihan Centre in Pasir Panjang Road.
It is here where Tayco, who was hailed by a television show on New Year’s Eve as one of the best people the Philippines has, decided to sell her kidney.
“It’s for my son,” the 47-year-old Tayco said.
These four words echo the notion that migrant giving —hailed by advocates as OFW philanthropy— is as easy as securing a fulfilling job in a developing country like the Philippines.
The fate of Tayco, founder of the Singapore-based charity group Pinokyos Welfare Inc., would reveal that the belief that temporary migrant workers can give back to the country (aside from their remittances) looks good in paper.
Her friends and former supporters could only scratch their heads in disbelief.
“Logic alone cannot fathom why she remains helping others other than herself,” said one of her friends. She owes him P5,000.
“It isn’t healthy to help others if you have your own urgent needs, Luisa,” another friend told her. Tayco owes her P2,500.
She owes this reporter P5,000.
Tayco, who once shipped books and school supplies from Singapore to the Philippines worth P2 million, couldn’t pay those loans now amounting to P27,000 (roughly US$500).
Still, she remains focused on continuing her Pinokyos work: the food business she put up fronting the Rebisco Biscuit Corp.’s factory here was named after her group.
Likewise, a plastic piggy bank gobbles coins steadily than the Pinokyos Canteen’s cash box.
“This is for Pinokyos,” Tayco said, her hand softly landing on the coin bank’s back, temporarily forgetting that for failing to pay water and power supplies to the canteen were cut off.

To read full story, visit the OFWJC Website

Gov’t Says Open to Redeploy Pinoys Not Ready to Return


MANILA—SUCCESSFULLY building a business after working abroad, Alberto Limbo Perez still couldn’t be pinned down in his own country. Luckily for him, a recently-built government center can give him that chance.
“Who would reject the opportunity of working abroad?” the 47-year-old Perez said in Tagalog. “Earnings from abroad are a big help to meet our needs. It’s a waste to let the opportunity pass.”
This comes from a man whose seven-year-old work abroad is being poured on a house with swimming pool at a cost of P4 million, almost half of what the Philippine government spent on a building to mold Filipinos like him to either stay home for good or go back to migrant work.
The building in Intramuros, Manila, was funded by the Overseas Workers Welfare Administration with a P7-million purse (US$140,000 at US$1=P48) according to Labor Attache to Japan Reydeluz Conferido.
Conferido said the National Reintegration Center for Overseas Filipino Workers would allow temporary migrant Filipino workers with plans to return permanently here to adjust first by allowing them go back to overseas work.
According to Conferido, the Center could help these Filipino workers find jobs anywhere in the world while preparing for that time he or she could eventually return.
“The past program was intended for OFWs who have decided to stay here for good,” the country’s labor attaché to Japan said during the launch of the center early March.
It’s this past program, begun at the start of the new millennium and formally launched three years ago, that the new project builds on, Conferido added.
“The personal reintegration has been further enriched to zero in on the abilities of the OFWs and help them match the environment in the Philippines a lot better, taking advantage of their particular expertise and skills and match them to existing opportunities in the Philippines,” Conferido said.“If the OFW is not ready yet to return to the Philippine for good, the same personal reintegration program is going to help them still look for appropriate opportunities abroad,” he added.

For full story, visit the OFWJC Website

Chamber of Commerce for OFWs Pushed


MANILA–PEOPLE who built their business from working abroad are moving to form a Chamber of Commerce to lure more overseas Filipino workers into becoming entrepreneurs.
“Instead of going to greedy local businessmen, fellow OFWs can go to themselves and make arrangements to supply some raw materials, or even provide discounts to some of their products to fellow OFW entrepreneurs,” businessman Miguel Bolos told the OFW Journalism Consortium®.
Bolos spoke about the moves to form an organization after a meeting of former overseas Filipino workers-turned-entrepreneurs early March.
That meeting was attended by Filipinos who successfully built a business using what they earned and learned from working abroad.
There’s the garments export business couple Alberto and Liza Perez.
Alberto used to work as a steel fabricator in Saudi Arabia, Aruba and Malta before going into business with hundred thousand pesos (US$2,083.30 at current exchange rates) and 17 sewing machines as capital.
Before it was Perezes who went overseas; now it’s their Apryl and Aira’s Apparel brand, which they claim are bought by Wal-Mart in New York, United States.
There’s also former Saudi Arabia contract worker Eduardo Callera who owns Canor Express International Brokerage Inc., a customs brokerage firm.Before, the boxes of products Callera sent home to his family in the Philippines were the ones transported in trucks. Now, Callera’s business —his trucks— moves these boxes to both domestic and international senders.
Bolos believes that an OFW chamber of commerce will enable fellow migrant entrepreneurs to talk among themselves and be suppliers of needed raw materials for their products.
It just might work because, as he said: “We need it.”
No OFW chamber of commerce based in the Philippines exists, although Bolos said he, fellow returning OFW Francisco Aguilar and fellow migrant workers in Saudi Arabia have tried —and currently moves to— forming such an organization.
Filipino immigrants in the United States have formed county-level and a US-wide chamber of commerce. The biggest of these chambers is the Federation of Philippine-American Chambers of Commerce (FPACC), a network of some 46 chapter chambers of commerce that have over-5,000 member-enterprises run by Filipino-Americans.

To read full story, visit the OFWJC Website

Asean Migration Pact Seen to Push Low-skilled Workers into Further Risk


MAKATI CITY—LESS protected under an international convention, domestic helpers and low-skilled temporary migrant workers still couldn’t find solace within a pact among Asean countries, analysts pointed out recently.
Advocates say this omission by member-countries in a non-binding declaration on migrant workers’ protection by the Association of Southeast Asian Nations could push millions of transient workers into accepting more dirty and demeaning jobs and weak bargaining positions.
What has prevailed in bilateral or multilateral arrangements on migrant workers is the movement of business and skilled people not on semi-skilled and unskilled workers, says Chia Siow Yue of the Singapore-headquartered East Asian Development Network (EADN).
Chia was recently in the country to speak on the “Asean Declaration on the Protection and Promotion on the Rights of Migrant Workers” that was forged in the country two months ago.
Her insights come as a second-thought on a pact that received high praises even from militant migrant advocates’ groups like the Migrant Forum in Asia (MFA).
“It (Asean declaration) is good news for migrant workers,” MFA’s William Gois said in a separate forum.
Gois said the Philippines capitalized on its hosting of the Asean summit to move this non-binding declaration forward.
This is a big first step for “Asean governments to recognize the contributions of migrant workers,” he added.
Gois echoes analysts’ views that temporary migrant workers remain the source of many of the Asean member-countries’ economic strength in the past five years.
The Philippines, for one, has weathered one financial crisis after another because of billions of overseas Filipinos’s dollar remittances.
International Monetary Fund data on the balance of payments has cited the Philippines as Asean’s leading recipient of remittances from 380,080 temporary contract workers.
Data from 1998 to 2005 by the Philippine Overseas Employment Administration bared that the Philippines has deployed some 196,900 temporary contract workers to Singapore, 54,914 to Malaysia, 96,748 to Brunei, 14,051 to Indonesia, 12,921 to Thailand, and 5,446 to Vietnam.
Still, Gois personally thinks the declaration “is only for a select group of workers, and eases out low-skilled migrant workers”.
“Unskilled labor is being hired as cheap labor in Asean’s competitive industries. Negotiators in trade talks seem blind to the plight of unskilled workers,” he added.

For full story, visit OFWJC Website

Steady Supply Stops Skill Spill, Social Savant Says


MANILA—THEY are the armies of salvation; the nearly million entrants to the country’s labor force, which an economist said ensures the steady supply of skills for the economy.

“We simply have too much labor,” Doctor of Philosophy holder Alvin Ang told the OFW Journalism Consortium (OFWJC) ®.
Ang last month presented his research in public that affirms the continuing export of labor doesn’t necessarily contribute to the phenomenon called “brain drain.”Advocates against the government’s structured processing of workers for foreign economies have warned the Philippines may find it difficult to reach economic progress because its highly-skilled people –doctors, engineers, scientists, teachers– are moving out.The University of Santo Tomas professor, however, even doubts the country will experience an economic slowdown due to this outflow.
Ang believes the Philippines “has adjusted to the workers’ overseas migration by replenishing them.”
“The government seems lucky,” Ang explains, “because abundant labor supply has given it time to ease fears of a permanent brain drain.”
He said that even if Filipino doctors and nurses leave, “there are many more left behind here.”“Not all Filipinos want to migrate anyway,” Ang said.He uses himself as an example: “If the Philippines’s brain drain problem were permanent, I myself would have not been here right now.”
Ang is going against past survey, especially by the Social Weather Stations, that points to the increasing number of Filipinos wanting to go abroad for work.Health industry leaders have warned in the past of the exodus of doctors and nurses, especially from government hospitals, seeking the high pay accorded to their colleagues in another country.
The local airline industry also warned of such exodus, especially of mechanics and engineers poached by headhunters of foreign airlines.
Another economist, Edita Tan of the University of the Philippines, said in a 2006 paper that even the rising numbers of Filipinos migrating for overseas work and permanent settlement “has not tightened the country’s [domestic] labor market.”
“(The Philippine) labor force increases faster than domestic and foreign labor employment,” Tan wrote in her article titled “Labor Migration and the Philippine Labor Market” for the International Migration Review.

To read full story, visit the OFWJC Website

Firms Tap Singing-Frenzy OFWs for Biz Expansion


MANILA—BOXER Manny Pacquiao’s endorsement of a portable music-video microphone shows the Filipinos’ penchant for singing and reflects the market is deep and wide.
But Butch Albarracin remains unimpressed. He says revenues from the domestic market are proving to be unreliable for his entertainment-focused business.
Albarracin, founder of the Center for Pop Music Philippines Inc., is setting his sights on eight million overseas Filipino workers who, despite temporarily or permanently living or working abroad, shares one dream: becoming the next big pop superstar.
Began in 1984, Center for Pop emerged as the country’s top music training school, aiming to develop a curriculum to incubate the next superstars in the entertainment industry. It has outlived other music training schools set up by other top musicians and composers in the country, after the Center, Alabarracin said, took the marketing part of the business seriously.
We balanced our focus on the music and selling the Center’s services, he added.
That strategy paid well for Albarracin, who was recognized last month by a local marketing group for his success in medium-scale entrepreneurship.
Today, the music school has 21 branches and extension classes in about 20 schools in Metro Manila.
But instead of moving towards the provinces, Albarracin said he’s more inclined to expand outside the country.
While he said he has received an offer from an investor in Daly City, California, Albarracin said he’s setting the stage for entry in Hong Kong.
“If we can go there and teach them how to sing, they can contribute to the growth of the [Filipino] community [there]. They can have a skill, and they won’t be shameful [of their jobs],” he added.

IT is also in Hong Kong that publicly-listed Filipino firm Intellectual Property Ventures Group (Ipvg) Corp. found not only the next singing sensation but a unique market for its prepaid calling card.Launched in July in Hong Kong, Ipvg partnered with HK-based IDT Corp. subsidiary IDT Telecom Inc. to search for a “Philippine Idol” version among an estimated 200,000 Filipinos in the former British colony.
The contest requires contestants to record their Filipino or English song entries—acapella, or with music accompaniment in the background—while using a pre-paid calling card sold by IDT Asia.Just recently, Ipvg announced from Manila the winner as Elvira Manacmul, 31, of Dinalupihan, Bataan, who bested four other finalists: 17-year-old Elija Clave of Malasqui, Pangasinan; Irene Aquino, 33, of Cagayan Valley; and, Julie Ann Jereza, 25, of San Narciso, Zambales. All were living in HK when they joined the contest.
“They outperformed over 800 other participants who phoned in… to record their songs for the contest,” IDT said.
The recorded songs were played weekly in the Philippines Tonight Show on Metro Plus AM 1044 radio which also encouraged listeners to vote for their pick.
The firm said over-400,000 votes were cast by listeners in the five month period that ended in the Grand Finals January 28, 2007.
The Ipvg statement said some 12,000 OFWs braved the chilly weather to view the creative side of the Filipino.Manacmul was selected during the live radio broadcast performance at Chatter Road in Central Hong Kong where a panel of judges pushed up her share of the estimated hundred thousand votes that poured for the contestants.Manacmul, a mother of two girls aged five- and seven-years old, would receive a recording contract with VIVA, a round-trip HK-Manila ticket, mobile phone, passes for two to Disneyland-HK, pre-paid call cards worth HK$500, and a “Magic Sing,” the portable music-video player-microphone endorsed by Pacquiao.
While Ipvg’s partnership with IDT Asia appears to be working, it is not envied by Albarracin.
“I am through with partnership. You end up fighting each other and one will go away with the money. That guy who will run away are usually those who are only after [the] money. Me, I cannot run because I’m a musician,” he said.

License to sing
ALBARRACIN, a voice coach, said to expand abroad, he must hurdle first the issue of whose license they will use: the singers’ or theirs.
Either way, he said, it could be a cause of headache.Using the singers’ license abroad could be risky since it meant partnering with other parties, while having our own license to operate in other countries meant tons of documentary requirements, Albarracin explained.
Still, he’s open to other arrangements.“There are so many arrangement that we can do. One is either I go there as a businessman, or I go there as a speaker,” Albarracin said, citing it’s easier to go the latter path.
“But I’m eyeing …a lasting relationship,” he added.
Albarracin’s plans and Ipvg’s tack come at a time when the Philippine music industry’s top revenue earners are few while others are still either catching the next flight to stardom or to other countries as solo or band entertainers.
But whether or not the plans of Albarracin and Ipvg –the firm is eyeing other countries– push through, they admit the OFW remains a good market.
“These are new markets. Sometimes people here (in the Philippines) have money, sometimes they have [none]. So we should have reserve sources of income,” Albarracin said pointing to OFWs.
Ipvg spokesperson Eric Paragas was quoted in a newspaper report as saying the success of the singing tilt has led the firm to consider “holding the contest again in Hong Kong and/or other countries.”
Indeed, both Albarracin and firms like Ipvg are singing the same tune: the country’s talents—and revenue sources—can be found outside its borders.

To read other articles, visit the OFWJC Website

Women OFWs Prop Up Spouses, Business


TAGUIG CITY—WHEN two men here felt a great financial need, they turned to their wives, proving the resourcefulness of Filipino women even when they are indirectly involved in business.
Take Leticia Marrero, for one, who worked as a domestic helper in Hong Kong to prevent her husband from selling a lot that he inherited from his parents.
The couple now owns and operates a resort in the Mountain Province, far north of here where they were awarded by a government-backed group for their inspiring business story.
There’s also Didi Dayag who went to Kuwait in 1986 and whose salary she received for working as a nurse there helped build more capital for her husband Eugenio’s cattle business also in the northern Philippine province of Cagayan.
What the two women had in common was having a focus on the reasons for working abroad and their subsequent decision to come back after having achieved their goals.
Dayag, for one, was able to buy eight hectares of rice land aside from supporting her husband’s ranch expansion.
The Dayags now own a fully mechanized plantation with three tractors, a stockroom, and a solar dryer. These allow the couple to manage fourteen hectares of rice farm, forty-three hectares of sugar cane and seventeen hectares of cassava.
They have also ventured into seed growing.
The couple’s business created jobs for around 68 families relying on seasonal farm work for income.
Marrero, on the other hand, was able to augment her husband’s work as postman, ensuring their children graduated college.
The grasping of a bachelor’s degree by her youngest, the last of four children, marked the end of Marrero’s stay in a foreign land.
With her savings worth less than a hundred thousand pesos, her family decided to develop their land into a garden resort with three swimming pools, picnic cottages, a lawn tennis court, a playground, and a convenience store.
It was the first of its kind in the province.
“Masaya ako dahil mayroon konting pinagkakakitaan,” Marrero said. “Pag wala na kami, merong maiiwan para sa mga anak ko na naumpisahan na namin mag-asawa.” (I’m happy we have a steady source of income, however small. At least, we could also leave something to our children when we pass away.)

To read full story, visit the
OFWJC Website

Realtor’s Success Proves RP Gov’t Support Key to OFW Business Dev’t


TAGUIG CITY–BUILDING and selling high-end houses in a war-torn land like Jolo might appear surreal for some investors, especially overseas Filipino workers.
For former OFW Michael Abubakar who claims a successful realty business in his hometown, links with government is key.
Abubakar was recently awarded by a government-backed group for investing in this third class municipality and capital of Sulu.
Populated by traditionally peaceful tribes of Islamic believers, Jolo, Sulu, is also clutched in a shooting war between Philippine government armed forces and armed members of branded-terrorist group Jemaah Islamiah.
Abubakar and his residential subdivision-building business were recognized last December by the group of Jose Concepcion, government consultant for entrepreneurship, as one of the OFW entrepreneurs dubbed as “most inspiring.”
“Jolo was an impoverished land and you build a housing like this and parang siyang babae na na make-up-an mo. Bago pa makuha ng iba, ikaw pa ang unang na-fall in love,” Abubakar said. (“Jolo is like a woman you’ve applied make up on and before others take her, you would be the first to fall in love.”)
Abubakar used the past tense to refer to his hometown which he left in 1973 after fighting raged between government forces and Muslims rejecting the leadership of Manila-based elected officials.
Twenty-three years later, he returned home in one piece and rich, having sold a quarter-of-a-million peso house in plush Ayala-Alabang subdivision in Manila for thirty-seven times its value.
Likewise, Abubakar said he was receiving US$6,600 a month as salary from an American firm when he decided to go home in 1996.
With that money, he established the M. Abubakar Consolidated Engineering (Mace) in Manila and flew back to Jolo the year an Asian financial crisis popped the real estate sector of countries including the Philippines.
Like a clueless gardener sent to make a landscape out of a vast, arid lot, I was confronted with a serious predicament–where and how to start, Abubakar said.
The government began it for him through a joint-venture housing project for Muslims.
With one foot in the public sector and another in business, Abubakar tapped a five-year loan from the government housing agency and built the First Sulu Estate Subdivision in Patikul, one of Sulu’s 18 municipalities.
It was the first high-class subdivision established in the province, Abubakar claims.
“When you come to think about it, in Jolo you cannot find good clients,” he said. “No one told me that [the project) would be successful. Other people told me, ‘Oy, you’re just throwing good money after bad.’”
Even my wife thought I was going crazy, Abubakar said.

To read full story, visit
OFWJC the Website

Filipino foreign funds flow foils farm progress —economist


MANILA—No one, it seems, wants to be a farmer anymore.
Japan-trained economist Dr. Alvin Ang said the Philippines is getting too much money from Filipinos abroad that “it seems (Filipino) labor would rather wait for the opportunity to be an OFW (overseas Filipino worker) than work in the farms.”
Rising inflows of remittances is “causing sharp declines in agricultural production,” Ang said in his paper “Workers’ Remittances and Economic Growth.”
Presented to mostly students of the University of Sto. Tomas where he teaches economics, Ang’s paper challenges the positive regard given to remittances of overseas Filipinos, which has hit more than US$11 billion (which translates to half-a-trillion pesos) last year.
In a country that has recently emerged from a fiscal crisis, as announced by President Gloria Arroyo, that money is important.
Ang’s observation, however, articulates the hidden worries that the Philippines may be relying too much on remittances from its more than eight million citizens in 190 countries.
This is especially worrisome as government failed to hit its domestic economic performance target last year, meeting only a 5.4-percent growth rate in the country’s gross domestic product. Government’s economic managers think that growth rate was below the Arroyo administration’s GDP target of a low 5.5 percent to a high 6.1 percent.
Former budget department chief Romulo Neri blamed typhoons especially during the last three months of 2006, which “brought down agricultural output.”
The Socio-economic Planning Secretary specifically pinned the blame on typhoon “Reming” which battered the Bicol region, one of the major sources of the country’s cash crops.
Last year’s farm performance affirms agriculture as the lowest performing sector of the economy with a 4.1 percent growth. Services is the economy’s top performer (5.4 percent), while industry is second-best (4.8 percent).
Ang said this situation prevails because of the continuing attraction of going abroad for work among households that receive remittances.
He added that some members of these households who own farmlands “leave the agricultural sector (as) their per capita incomes grew.”

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