Local gov’ts advised to tap OFW remittances for programs

Written by Jesus F. Llanto
SATURDAY, 19 SEPTEMBER 2009

Expert says families tend to invest 10% of the dollars sent by relatives abroad

Local government units (LGUs) should consider tapping the remittances of overseas Filipino workers (OFWs) in funding projects in their communities, an expert on migration said.

During the Joint Cities Conference on Transparency, Accountability and Competitiveness in Makati City held this week, University of the Philippines political science professor Jorge Tigno said that LGUs can pool portion of the remittances of the migrant workers to help fund projects in their localities.

“We need to think that development can come not only from official development assistance (ODA) and foreign direct investments (FDIs) but also from remittances,” Tigno said.

Around 10% of the 80 million Filipinos are working in other countries and the multi-billion remittances they send annually have boosted consumption and kept the economy afloat.

OFW remittances reached US$16 billion in 2008, according to data from the Bangko Sentral ng Pilipinas. For 2009, preliminary data show that total remittances have reached almost $10 billion in the first 7 months.

$1-B POTENTIAL

Tigno said that studies have shown that about 10% of OFW remittances are saved or are invested by their families.

“That’s more than a billion dollar that we can tap to fund projects in the community,” Tigno said.

“Income remittances have a direct impact,” he added. “Migrants have a tendency to identify with their hometowns.”

LGUs, Tigno said, overlooked the potential of remittances as fund sources for their community projects because local officials think they are not the ones who will benefit from them. He added that most LGUs do not even monitor the migrants in their jurisdictions.

He added that most local development plans of the LGUs do not tackle the role of the migrants and effect of migration in the community.

JOB-CREATING PROGRAMS

“They tap the migrant workers to donate money for the fiesta celebration, construction of waiting sheds or medical missions, which may not be what the LGUs really need,” he added.

Most LGU programs, he added, that are funded with the help of the migrant workers’ remittances are those that have high impact for short term only.

LGUs should implement programs that can generate income and create employment, he said. “LGUs should have a program otherwise the money will go to waiting sheds again.”

Tigno, however, said that even the national government should start drafting a policy to tap the development potential of migration. He added that the current Medium Term Development Plan does not mention the potential of migration and that the National Economic and Development Authority (NEDA) should include the issue in crafting the next MTDP.

“A pronouncement on the part of national government to say that migration has a positive role to play in development is needed,” he said. “Once that’s made then the cue can be taken by the local government and it can encourage them to craft their local development plans that will include the role of migrants.”

BROADER PERSPECTIVE

He said that the national government is having a dilemma with this issue since it could be accused of promoting migration, which is a violation of Republic Act 8042 or the Migrant Workers Act of 1995.

Section 2-C of RA 8042 reads: “While recognizing the significant contribution of Filipino migrant workers to the national economy through their foreign exchange remittances, the State does not promote overseas employment as a means to sustain economic growth and achieve national development.”

Tigno said, however, that the government should broaden its perspective and should realize that acknowledging the contribution of migrants is not necessary promoting migration.

“We are just tapping and managing the phenomenon so it can contribute to local development,” Tigno said. (Newsbreak)