Coronavirus threatens Philippines' 'economic lifeline' of OFW remittances

A flotilla of 17 cruise ships arriving in Manila Bay would normally gladden the hearts of Philippine officials, but not when they are filled with thousands of Filipinos who have lost their jobs abroad because of the coronavirus pandemic.

For decades, the Philippines has relied on its overseas Filipino workers, or OFWs, to drive economic growth and provide a cushion against financial crises with their remittances. Last year, an estimated 10 million OFWs sent about US$30 billion home " equating to nearly 8 per cent of the country's GDP.

But that amount could be set to plummet by some US$6 billion in the wake of the pandemic, according to an estimate by the Ateneo Centre for Economic Research and Development in Manila, which if it happened would be "the steepest drop of remittance inflows in Philippine migration history".

More than one in 10 Filipino households have a family member who is an OFW and their remittances are "a major economic lifeline", Atteneo said.

A cruise ship is seen anchored in Manila Bay amid the coronavirus pandemic. Photo: EPA

Yet as the pandemic shuts down businesses and industries all over the world " leaving thousands of OFWs out of work and returning home " that lifeline is now under threat.

Overseas Workers Welfare Administration chief Hans Cacdac has said up to 45,000 workers could arrive by sea and air this month and next, on top of the 26,700 or so who have already returned.

The cruise ships idling in Manila Bay have about 5,000 OFWs on board, local news outlet ABS-CBN has reported " though much like their compatriots who came back by other means, they will not be able to immediately return to their home provinces.

Each will have to be tested for the virus and quarantined for 14 days, either on board their ships or in hotels. Meanwhile, there have been reports of returning OFWs facing hostility in the towns where they have been billeted.

The Philippine Coast Guard, which is in charge of processing returning workers, said it had tested 14,418 of them for the virus between May 2 and 10. Manila's airports were closed to incoming flights for much of this period, to prevent the country's testing capacity from being overloaded by the rapidly growing flood of new arrivals.

For years, Philippine governments have lauded OFWs as "heroes" for going abroad to work and enduring separation from their families.

But returning workers now face economic hardship upon their release from quarantine, and may not even be able to make it home amid the coronavirus lockdown of Metro Manila, which was recently extended until the end of the month.

Daisy Mandap, an activist and editor of Filipino community newspaper The Sun in Hong Kong, said that the Philippine government is not doing enough for its overseas workers.

Philippine President Rodrigo Duterte has been criticised for not doing enough to help the families of OFWs. Photo: AP

She said that while President Rodrigo Duterte's administration had promised to help the needy with food and cash handouts, this has not been extended to the families of OFWs.

"The government has exempted OFWs and their families from receiving financial assistance, when the very reason they decided to go abroad was because they were jobless and didn't have money to feed their families back home," she said.

"Meanwhile, we have OFWs experiencing difficulties because they did not get paid when they got caught in the various restrictions imposed by the Philippine government on those leaving for abroad, particularly for Hong Kong."

Even OFWs who did not lose their jobs face hard times, with the Ateneo Centre estimating that "about 300,000 to 400,000" have been affected by lay-offs and pay cuts.

Some of the 900,000 Filipinos working in Saudi Arabia have seen their salaries slashed by up to 40 per cent, according to Rodolfo Estimo, a former editor of the country's Arab News newspaper.

Yet he said Philippine government officials had done little to support them, with some even "scolding OFWs" for trying to claim food and cash assistance from the Philippines Overseas Labour Office in Saudi Arabia.

Nearly 170,000 OFWs have applied for a one-time cash payment of 10,000 pesos (US$197) offered by the government, according to Cacdac, the Overseas Workers Welfare Administration chief, but fewer than 52,000 of these applications have been approved, with only 40,572 payments distributed so far.

This cash "is only for those who either lost their jobs, or got sick of Covid-19, or both," said Mandap, the activist. "And even that will not go far enough because there is no telling when they can work again."

Past crises, such as the Gulf War, have forced the repatriation of OFWs before. Photo: AP

Past crises, such as the Gulf War, have forced the repatriation of OFWs before, but these displacements were usually only temporary.

Even during the global financial crisis of 2008, many OFWs managed to keep their jobs or find new ones in their adopted countries, by "deskilling [so that] an engineer laid off continued to work as an electrician [for example]", the Ateneo Centre said " resulting in remittances actually increasing to US$19 billion in 2009 from US$18 billion the year before.

However, a return to normalcy in the wake of the coronavirus is not expected any time soon " particularly for hard-hit sectors like the cruise industry.

Nicky Franco, research head of brokerage firm Abacus Securities, estimated that it may take "18 months or more" for these types of jobs to return " but he does not see the Philippine economy struggling too badly in the meantime.

"Remittances now account for 7.8 per cent of GDP [and] even in the unlikely event that they drop by 50 per cent that would still only be 3.9 per cent of GDP," he said.

This article originally appeared on the South China Morning Post (SCMP).

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