09:49 | Migration and Remittances: A Super Overview
[Note: This is part of a series that I will publish in this blog as part of the culmination of my employment (end of contract?) in a government research institution. Frankly speaking, I am at the lowest of the pecking order, which means that this blabbering may not mean anything at all. Analyses herein may be/are in fact superficial. Whatever written here is the sole responsibility if the writer, which in most cases you never really knew.
Why in series and not publish it in one article? Firstly, because it is still a work in progress, collating personally interesting points that I have stumbled upon these past few months. Secondly, which I think is the more serious and more important factor, I have the attention span of a three-year old child: I do not like reading long posts unless they are really good, neither do I think of my self being able to write one. Read at your own convenience.]
International migration is becoming more and more an important reality in today's globalised world. The World Bank (2008), for example, estimates that in 2005 around 3.6 million Filipinos are outside the country. However this may be understated as official government statistics, through the Commission on Filipinos Overseas (2006), estimates the total migrant stock of Filipinos in 2005 at 7.9 million, more than double the WB estimate.
More recent numbers from the government estimate the country's international migrant stock in 2007 at 8.7 million Filipinos, composed of around 3.7 million permanent migrants, around 4.1 million temporary migrants, and around 0.90 million irregular migrants (CFO, 2008). The number of Filipinos outside the country in 2007 represents roughly around 9.8 percent of the country’s population, estimated by the National Statistics Office (2008) at 88.6 million, in the same year.
Remittances, the Economy and Consumption
However it may not be safe to claim that international labor migration in fact eases labor rigidities in the local labor market, remittances from international Filipino migrants nonetheless helps the economy to keep afloat especially in times of economic slowdown with its counter-cyclical nature (Ratha and Shaw, 2007). In 2003, around 21.7 percent of Filipino households partook of the US$7.8 billion (BSP, 2008) received remittances from abroad. This figure may be greatly understated as it only accounts the portion coursed through formal remittance channels, i.e. banks.
Remittances have become so important, in fact, that in 2007 the BSP estimates total remittance receipt coursed through formal means to be at US$14.45 million. This represents around a tenth of the country’s Gross National Product, estimated by the National Statistical Coordination Board (NSCB) at US$1.5 billion (US$1=PhP46), in the same year. This is more than the GNP shares (%) of Transportation, Communication and Storage (6.8), Finance (4.7), Owners Dwellings and Real Estate (5.4), and Government services (6.9), and of Mining and Quarrying (1.2), Construction (3.7), and Electricity, Gas and Water (3.3) combined.
Migrant remittances have been shown to effectively increase the disposable incomes of migrant dependents, thereby allowing them to spend more on education and health, which, in turn, increases human capital. An expansion of consumption, savings and investment brought about by the increase in income of migrants and their dependents have been shown to have positive economic effects on the immediate community of migrant dependents, and to the greater economy, as well.
Drain, Circulation or Loss
With the beneficial effects of international labor migration, through remittances, to the economy, it is not without negative effects to the economy as well, however. A classic example may be that of “brain and brawn drain,” a phenomenon wherein the more experienced brains and bodies, representing investments in education and health, of an economy is exploited by another economy, thereby benefiting from the human capital investments of the first economy. Sectors that may be seriously affected by this phenomenon in the country include medical and allied medical services, education, and aviation, wherein significant real wage differentials between our country and of destination countries is an important push-pull factor.
This theory of “drain,” however, is countered by another paradigm proposing that brain drain may in fact be a "brain gain" for both economies, as both economies benefit from the same human capital investments of the first and the experiences these migrants will have in the second economy, if and whenever migrant workers return to their country of origin. Thus skilled migration may contribute to “brain circulation” and “brain sharing,” with positive benefits accruing to both sending and receiving countries.
The question then to be asked is if receiving countries are able to utilize the skills and expertise of migrants. Otherwise, this does not constitute a “brain/brawn drain/gain”, but a “brain/brawn loss,” as prior expenditures on education and health, which may otherwise be recognized and utilized in the sending country, is lost as skilled worker is made to do unskilled labor work in the receiving country.
Migration, Remittances and Development
With the above super overview, it is evident that policies that may affect migration and remittances will have serious repercussions to the economy. It is imperative therefore that research with sound theoretical and methodological bases be undertaken to fully understand the migration and remittance dynamics, to maximise the benefits that may accrue to the economy, and to mitigate the effects of whichever that may be harmful. [To be continued, hopefully. Another boring post coming up soon!]
11:37
whoa, at me continuation pa pala to?
tayo ang nagsu suffer kapag yung magagaling natin ay ibang bansa ang nakikinabang. hay.
18:02
someone ismissing doing academic papers...HAHAHA...
kunyari ako teacher mo bibigyan kita ng 2.0
18:36
i won't be missing it for long. back to school na ako uli starting tom. huhu
04:15
aray.
aray!
Im calling 999...
NOSE BLEED AKO.
11:41
me stats ba kung ilan sa mga prof/skilled na lumalabas sa pinas ang bumabalik for good and eventually 'share' kung ano man ang natutunan abroad? and kung babalik man, me stats ba (ulet hehe) na makakapagsabi kung ilang percent nitong 'acquired' knowledge were put into productive use considering ang lag natin in terms ng techno advancement or modern equipments?
12:51
@tagabukid: wala. kaya nga mahirap ioperationalize yung mga hypotheses ng drain, etc. yung stat mismo ng flow at levels problema ang estimation. anyhow, we cannot do anything but make do of what we have.