Fact check OFW’s contribution to the economy
4 mins read

Fact check OFW’s contribution to the economy

The policy of sending Filipino workers abroad is aimed at giving them jobs in labor-scarce countries during periods of economic downturn. It started in the mid-1970s to the 1980s and expanded rapidly from the 1990s to the 2000s. The late Labor Minister Blas Ople was the first to introduce it as a stopgap measure when there was a decline in the supply of jobs in the economy. However, the policy is now a feature of successive administrations, triggered by disjointed industrial policies, low wages for professionals, a shortage of skilled trades, rising numbers of unemployed graduates and other push-and-pull factors for working abroad.

From exotic entertainers in Japan and construction workers in the Middle East to domestic helpers in Hong Kong, our country saw higher skill requirements for overseas Filipino workers, from doctors and nurses, academics and scientists, and architects and engineers to ship captains and naval officers and information technology and computer programmers. Many got higher paying jobs in Canada, USA, East Asia and Europe. In the economy, when the best and brightest talent in the country leave to work abroad, a “brain drain” occurs. It wastes valuable human capital that is crucial to the country’s transformation into an industrial and knowledge-based economy.

The table below shows remittances by overseas Filipino workers (OFWs) have contributed an average of 8.28 percent to the country’s gross domestic product (GDP) over the past 13 years. As the country’s economy expanded, it began to depend on these remittances to stay afloat, especially during an economic recession.

In terms of security risks, one in three OFWs are employed in countries vulnerable to war, terrorism and political unrest. The table below shows that there are approximately 2.33 million registered OFWs around the world, both land-based and sea-based. Most of them are in places in a region where domestic upheaval occurred, such as Saudi Arabia (18 percent), the United Arab Emirates (12 percent), Hong Kong (8 percent) and Qatar (6 percent).

It seems that most OFWs are not only lonely from being away from their loved ones but also risk their personal safety by working in these places. There are one in four OFWs working in cargo ships and luxury ships that sail pirate-infested and Houthi-operated waters such as the Red Sea, the Strait of Hormuz, and the Gulf of Oman. In August 2024, a Greek-flagged oil tanker carrying Filipino sailors was attacked by Yemen’s Houthi rebels in retaliation for Israel’s military campaign in the Gaza Strip.

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Some studies revealed that many OFW households succumbed to adultery, illegal drug and alcohol addiction, and mental health problems. When both parents are apart for so long, it has negative effects on the emotional and psychological well-being of the entire family. Some OFW couples were reported to have illicit affairs during their stay abroad.

OFW households were also reported to spend more than 45 percent of their income on such items as food, clothing, mobile devices, and motor vehicles. Spending on investments, such as housing or real estate, is just less than 10 percent. Thus, when OFWs return home when their contracts expire, many are left without savings or capital assets to venture into alternative livelihood opportunities.

Finally, one of the most despicable issues is the physical and sexual abuse committed against OFWs, especially women. In many traditional and patriarchal Arab countries, there were documented cases of female OFWs being raped by their employers. Other male OFWs were physically abused and forced to live in squalid conditions. The worst is when OFWs come back and enter Philippine airport terminals. Corrupt immigration and police officers would plant prohibited items such as live bullets or narcotics to extort money and harass them.

The importance of OFWs to our economy cannot be underestimated. They send foreign currencies that the country needs to pay for important exports such as fuels, machinery, computers, equipment and other manufacturing inputs. OFWs spread Filipino culture and positive impressions of our race to other countries as soft power.

However, it should be pointed out that the policy of sending more Filipinos abroad is not a long-term strategy. It undermines our human capital and divides Filipino families. What we need is more high-quality, high-paying jobs in this country than elsewhere.