A Destructive Obsession with OFW Remittances
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| BusinessWorld Online |
... Millions of Filipino men and women had to leave their country for jobs abroad beneath their level of education. Filipino professionals, whom we recruited to work in Singapore are good as our own. Indeed, their architects, artists, and musicians are more artistics and creative than ours. Hundreds and thousands of them have left for Hawaii and for the American mainland. It is a problem the soltuion to which has not been made easier by the workers of a Philippine version of the American constitution.
That should be a very alarming fact! I'm amazed I'm reading on Facebook how some people cited Lee Kua Yew's famous quote against the Marcoses from the same book but they're still opposed to opening up the country to more foreign investment. Some say that Singapore only opened up to foreign direct investments (FDIs) because it wasn't rich in natural resources. Yet, Vietnam, a Communist country rich in natural resources, opened up to FDI, and look where it went. Lee Kuan Yew even mentioned his meeting with the great Communist economic reformer, the late Do Muoi, who was also mentioned in the same book. If they should want to learn from Singapore--we need to open up the economy. Heed also to what Lee said about OFWs. Right now, his son, Singapore Prime Minister Lee Hsien Loong, would still have to deal with OFWs in Singapore. It's been some time, especially since the economic reforms from Ramos up to former Philippine President, Rodrigo R. Duterte, haven't been enough.
Take a look at the idea of OFWs as the "bagong bayani" or "new heroes"
Yet, there's this trend that was taught in schools that Overseas Filipino Workers (OFWs) are indeed the new heroes. Why are they called the new heroes? It's all in the name of one word--remittances. One could argue that if it wasn't for the OFWs--the country would be poor. I even met this 60-year-old dancer (and it's safe to assume he's a former dancer due to his old age, he was 59 the last I ran into him) who said that I'm stupid to cite about families getting separated from each other. I think he used ot dance at the Excelsior Hotel in Dubai. People can keep talking about remittances. They think that remittances will be the very root core of sustaining the Philippines. When I talk about letting FDIs invest here--they keep insisting in developing through the "Filipino First Policy". Other nonsense goes from that only FDIs will benefit from letting them invest here (read rebuttal here) or even funnier, that FDIs are just there to invade as "imperialists".
The idea of OFW "conquest" and FDI "invasion" may be the prevailing mindset (read here). I could even remember a Filipino nurse in Singapore named Ed Mundsell Bello bragged about "conquering Singapore" only to get kicked out of the country he claimed he was conquering. It was upsetting to see statements on Facebook such as "Hong Kong is an extension of Filipino territory." or "Filipinos invade Malaysia." The Philippines has sent so many OFWs yet not one country has become an extension of the Philippine state. Instead, these OFWs are getting separated from their families. That's why I really must admit that another certain old man I ran into on Facebook (and I argued with that guy) said, "All that talk of separation is just drama." That old man certainly had no idea how world economics and world trade works huh?
However, the idea of OFW vs. FDI game of conquering is far from reality. When OFWs go to another country--they're submitted outside the control of the Philippines. They are there to get jobs which means if you get that job--you're bound to a boss. If they go to Singapore--they're bound to Singaporean laws. If they go to Hong Kong--they're bound to Communist China's laws. Meanwhile, FDIs, where they invest, must also follow the rules of other countries. A food chain may need to adjust its menu based on cultural needs. A restaurant chain would need to eliminate beef from the menu when they're in countries that are predominantly Hindu or Buddhist. A restaurant chain would need to eliminate pork from the menu when they're in a Muslim country. That means Jollibee in Dubai would have to respect Muslim laws and not serve pork on their menu. FDIs are also required to follow labor laws, employ locals first, and more importantly pay their taxes and make sure their businesses are duly registered. An FDI will still be under local control even if they don't have a local partner. They may not have a local partner but they'll still require a local lessor (if the country doesn't sell land to foreigners) to whom they're obliged to pay rent. They will still pay taxes every month (such as VAT), every quarter, and the annual tax. Failure to pay taxes means an FDI becomes a bad tenant. A good tenant pays rent properly. A good business pays taxes regularly. A good FDI follows local laws like a good tenant. A bad FDI can forget about continuing to do business because they're practically bad tenants.
This reminds me of what Andrew J. Masigan also wrote on Business World the following:
As usual, the dollar inflows from OFW remittances and service exports (IT-BPO industry) save us from financial ruin. Between 2016 and 2020, OFW remittances pumped-in an average of $32 billion a year while our service exports contributed an average of $36.5 billion a year.
Have OFW remittances and service exports been enough to cover our deficits? No. There is a still a gap and it is funded by debt.
I may have different political views from Masigan. However, Masigan, like the late Carlos Celdran (who left us too soon) also knew the problems of protectionism. Masigan is right in stating that while OFW remittances do help--it's never enough to cover the deficits. Relying on OFW remittances for more than 30 years (and I'd say it's probably been since 1970s) has done little to alleviate foreign debts whether it'd be from the reign of the late Ferdinand E. Marcos Sr. or the COVID-19-related debts. If we seriously want to pay--we definitely need more taxes. Yet, some people like IBON Foundation still think it's best to "tax the rich" or even have that destructive obsession with cash handouts (read here). The OFW remittances have never been enough. It's crazy to ignore the social impact that it has on the OFW families--not especially separation. Even worse, some are working to the bone on Christmas Eve while their families may waste the remittance.
Instead, FDIs will provide jobs and revenues needed by the country. That's why I'd listen to Singaporean-Indian Kishore Mahbubani over former Philippine Chief Justice Hilario G. Davide Jr. when it comes to economic policies (read here). Mahbubani had said it right about FDI and called the anti-FDI mentality third-world stupidity. As mentioned earlier, failure to pay taxes is a no-no for FDIs. FDIs need to pay their taxes and they only get rich after their net income after taxes. Anything left after taxes is theirs to keep. Mahbubani not only spoke it--Singapore proved it. Stop saying that Singapore is too small for the Philippines to follow. China, Vietnam, and India are bigger than Singapore. Yet, think about how the late Deng Xiaoping (who died in the late 1990s) actually brought China to a great horizon. Vietnam's Do Muoi's economic revolution caused it to rise. India's open policy in the 1990s made it a world power.
Instead of OFW remittances (which may take longer than usual)--FDIs paying taxes will be better. The Bureau of Internal Revenue (BIR) could care less if the business is foreign or not. Foodpanda and Grab (both foreign delivery services) pay their taxes. McDonald's pays its taxes. Chatime pays its taxes. I get a receipt from every foreign company I buy something from. In short, the receipt means the BIR will have a collectible amount. Filipino accountants will have to file it to the BIR. The BIR will get ready for a collection of taxes every month, every quarter, and every April 15th. Relying alone on Filipino businesses will not do. FDIs will produce the taxes that will make it into the national treasury faster than OFW remittances. It's because when businesses earn (whether local or FDI)--they must declare it, get taxes paid, and that tax will produce revenue for the country.
Even better, having more FDI will mean that OFW families can start getting employed one by one. It would mean that more OFWs can return home, work at home, be with their loved ones, and getting employed will become the norm. Sure, there are always those times when newbie earners or businessmen make terrible financial mistakes. However, failure isn't always final. I've suffered from bad credit before. Some people even lost millions of pesos before they succeeded. Having FDI will mean that local businesses may find room to expand (and therefore need to employ more people) or more people looking for jobs will get jobs. Sure, the Korean language schools may be bringing in foreign workers (ex. Korean staff) but they'll still need Filipino teachers to teach English, Filipinos to act as security guards, Filipinos to act as office workers, etc. Most of the employees by FDIs will be the locals. They will all end up producing a more productive workforce that will remit money faster and more securely than OFW remittances.
