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THE
Philippine economy is seen to grow by 6.2 percent this
year fuelled by the remittances of overseas Filipino
workers (OFWs), BNP Paribas chief economist Dr. Andrew
Freris said in a forum organized by the European Chamber
of Commerceof the Philippines (ECCP).
Freris,
according to an ECCP statement released Wednesday,
however quickly warned that with this level of
performance, the country’s GDP growth will again be far
below its potential.
“The
Philippine economy can easily grow anywhere between 10
percent to 15 percent but somehow it is condemned to
subpotential trends,” Freris said.
Also,
Freris said with this rate of economic expansion, the
Philippines will not be able to absorb back into the
economy the millions of OFWs scattered throughout the
world and help solve the perennial problem of brain
drain.
Freris
said the 10 million-strong OFWs will help the Philippine
economy post a 6.2 GDP this year, with their remittances
seen to top 2007’s $15 billion, which already
represented 9.8 percent of the GDP.
“Rising
remittances not only support domestic consumption, they
also help maintain the current account surplus at the
time when the goods and services account is consistently
registering a deficit. Indeed, without these
remittances, the current account would have been
permanently in deficit,” Freris said.
Last
year, the remittance sent home by the OFWs helped the
country post surplus of $3.5 billion. More than half of
the remittances sent back to the country came from the
US,
where 44 percent of the OFWs are located.
However,
Freris said the Philippine economy would need to grow by
at least 14 percent before it could absorb back and
provide livelihood to the millions of OFWs and stop the
brain drain that is giving headaches to existing firms
here, BNP Paribas chief economist Dr. Andrew Freris
said.
“If they
(OFWs) come home now and at the current rate the
Philippine economy is growing, they will only find
themselves unemployed,” Freris said.
He noted
that while the OFWs are helping much in keeping the
Philippines afloat through their remittances, their
absence in the country also results in the lack of
available talent here.
Already,
the ECCP’s Human Capital Club last year estimated that
companies here are incurring additional costs of at
least P1 billion in recruiting and training new staff to
replace those who have left to work abroad.
“The
costs it (exodus of workers) imposes include the
potential loss of educated and skilled workers to the
economy, demographic consequences, as well as the social
cost of broken families,” Freris said.
Also,
Freris said the fact that a lot of OFWs are working
abroad merely as household help or factory and
construction workers—despite possessing far better
skills, qualification and educational
attainment—reflects the severe problem of job-skills
mismatch in the Philippines.
“Exporting domestics and cleaners does not reflect the
skill levels of the workers involved. It reflects the
demand overseas for these skills. The resultant mismatch
of skills also reflects market consideration as their
productivity in a different job is higher outside than
inside the Philippines ,” Freris added. |
