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Monday, May 07, 2007

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.”

To read full story, go to the OFJWC Website

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