Economic Fall Out to Watch

http://www.manilatimes.net/opinion/editorial/economic-fallout-to-watch/

SOME experts estimate that remittances from overseas Filipino workers, or OFWs, account for about 10 percent of the gross domestic product (GDP). Filipinos abroad sent home more money than expected last year, about $18.8 billion, according to reports. And many of the economists who predict economic growth to continue this year assume that OFW remittances will also increase in 2011, perhaps even breach the $20-billion mark.

Overseas Filipino workers

All is not well in the world, though, and the President and his economic managers need to stay alert and, if possible, anticipate problems in order to contain the possible fallout. Earlier in The Manila Times, the Management Association of the Philippines (MAP) warned about a possible oil-supply crunch and displacement of OFWs resulting from the “people power” revolutions sweeping the Middle East and North Africa. Felino Palafox Jr., speaking as MAP president, said in a statement that the Philippines must brace for a possible recurrence of the 1973 oil crisis. That sounds a bit extreme, but we agree that it does not hurt to prepare for the worst.

Besides oil, an equally grave matter is the welfare of OFWs worldwide. Their remittances fuel consumption growth, which encourages businesses to expand and foreigners to invest here. But reports on Wednesday were ominous about OFW placement prospects and opportunities.

In Libya, at least 30,000 Filipino workers are caught in increasingly violent clashes between the forces of Libyan leader Muammar Qaddafi and those who want him ousted. The Philippines raised a travel advisory to Libya that also impacts on the deployment of workers there. With luck, the political crisis in Libya will end peacefully and swiftly. If it does not, the economic repercussions in Libya would further dampen the demand for foreign labor. The latest reports indicate that the political situation there will get worse before it improves.

The political upheaval that started in Tunisia continues to sweep through the region. Egypt is peaceful for now, but the world is watching the developments there. Meanwhile, the unrest has spread to Bahrain, Yemen and Iran.

Threat from Taiwan
There are also threats to OFW jobs closer to home, in Taiwan. Some 90,000 Filipinos work there, including the undocumented migrants. The present row between Manila and Taipei has effectively stopped the deployment of Filipinos to Taiwan.

We hope the Palace is wise to the situation, because the words coming from Taipei may be misunderstood. As a result of the deportation of the 14 Taiwanese to China, Taipei says that it is only considering a hiring freeze against Filipinos. But in actuality, a freeze is in effect.

In retaliation, the Taiwanese government is prolonging processing the documents of Filipino workers, from mere days to months. The delay is more pernicious than it seems. In effect, the Taiwan-bound OFW is probably going to lose the job opportunity because few businesses can afford to wait months to hire people.

Time is money, as they say. And for Taiwanese managers and entrepreneurs in the market for foreign labor, the more likely response to the processing delay imposed against the Philippines is to hire workers from other countries.

There may be long-term consequences, too. The clampdown on Filipinos workers might trigger more Taiwanese factories to relocate to China, where the labor is cheaper relative to the Philippines.

We hope that it’s not lost on the Palace that despite the belligerent posturing between China and Taiwan, economic and cultural ties across the straits is increasing. Despite being officially at war, China and Taiwan signed last year a bilateral trade agreement—the ECFA or Economic Cooperation Framework Agreement. That agreement allows direct flights from the mainland to the island, without needing to make stopovers in places like Manila. The ECFA also opens up the vast China market even more to the Taiwanese, who were major investors on the mainland even with the political roadblocks. With those obstacles now gone, the Philippines is in danger of becoming irrelevant.

Interpreting Taiwan’s message
Based on recent Palace statements, the Aquino government continues to be clueless about how to deal with Taiwan. First, the President and other Palace officials should remember what mothers typically tell their children—that if there is nothing good to say, don’t say anything. If the Philippines is unwilling to formally apologize to Taiwan, then it should stop saying so. Silence is golden, says another popular maxim.

Instead, we urge the Palace to first understand the situation before it reacts. Taiwan’s President Ma Ying-jeou is seeking reelection this year. The deportation issue is being used by the pro-independence opposition in Taiwan against President Ma, accusing his government of an inability to protect citizens.

We also understand that Donald Lee, the representative of Tapei Economic and Cultural (TECO) in Manila, will likely face a government inquiry over what happened here. Also, he will probably be questioned by opposition lawmakers about his efforts to prevent the Taiwanese criminals from being flown off to China.

Because President Ma and his representative to Manila are under fire from the opposition, it’s no wonder that Taipei officials are talking tough. Because of the deportation issue, the Philippines finds itself between opposing forces in the straits and in the middle of the political arena in Taiwan. And because of poor—and possibly illegal—moves by the Filipinos officials, the OFWs are reaping the consequences.

We concede that what’s done is done. We cannot take back what has already happened. But in the future, we urge the Palace to think more and talk less.

Economically speaking, apart from natural resources, our country primarily depends on the human resources. As much as we know that we’ve been a big exporter of agricultural products that serve as raw materials for the processed goods by other countries, we are also absolutely aware that the world calls for the overseas Filipino workers. Throughout the years, the Filipino hands have significantly risen to be present in many work fields across the globe. As an effect, a huge amount of money remittances is being collected by the Philippines, thus strengthening or should I say sustaining our economy.

I personally believe that this country’s survival rests on its manpower so the recent recall of our OFWs from Libya due to a political conflict in the said country is surely an immense scare. Not only would we receive fewer remittances, but also we’d experience a quick rise in population, a tough task on the government’s shoulders for the recalled OFWs’ welfare, and another rise in the population’s unemployment rate. These are just the beginning so surely, we’d have to expect for more.

The current Philippines-Taiwan stained relations inflicting the opportunities for our OFWs is another story. Based on reports in 2010, Taiwan seeks closer economic ties with ASEAN and as an ASEAN country, we are bound to find ways to learn and have friends with other races. This goal which is supposed to be a back bone in building up economic partnerships with Taiwan is now at stake due to the deportation of 14 Taiwanese to China. Now, Taiwan cogitates a hire freeze for OFWs. Again, the effects which have been already stated in Libya problem above have continually replicated and risen.

Our country is indeed facing bothersome economic issues. But I am certain that these problems, though currently happening, still have solutions. I may not be a professional economist or a government official but I am sure that if they just work hard on it, the government could solve these problems. Even we students and regular citizens could help in our own little ways. I’d like to propose that each of us extend our help and even simply our hugs and smiles to the affected OFWs. We should brace our relationship with Taiwan through learning and respecting one another, raising friendship, and other means. With one heart and two hands, let us do our best to amplify every good for our OFWs’ welfare.