Undue reliance on OFW remittances | Inquirer Business
Corporate Securities Info

Undue reliance on OFW remittances

/ 04:01 AM January 18, 2022

Last month, President Duterte signed into law Republic Act No. 11641 or the Department of Migrant Workers (DMW) Act.

The new department is aimed at, among others, obtaining the best possible conditions of work for overseas Filipino workers (OFW), and providing timely and responsive services to address their needs regardless of legal status.

There is no question about the invaluable contribution of OFWs to our economy. Their remittances since the 70s have helped stabilize the country’s balance of payments and improve the lives of countless Filipino families.


The Bangko Sentral ng Pilipinas reported that, last year OFWs remitted $31.19 billion from January to November and $29.09 billion in the same period in 2020.


That dollar inflow, and those expected to come this year, would help pay the trillion-peso debt the government has incurred to meet the challenges brought about by the COVID-19 pandemic.

Indeed, the OFWs’ “financial subsidy” deserves utmost recognition by and reciprocation from the government.

But is the creation of the DMW the best way to express that gratitude or address the issues that often arise in the course of their employment abroad?

Historically, Congress creates executive departments to manage a significant facet of daily life in the country which, if not timely and properly addressed, would adversely affect the majority of Filipinos.

The need for such a department has to be critical or compelling because its organization and staffing would require the annual appropriation of millions of pesos in taxpayers’ money. The mission of the department has to be worth its expense.

Thus, for example, in 2016, Congress created the Department of Communications and Information Technology to undertake the “planning, development and promotion of the country’s information and communications technology agenda in support of national development.”


In 2019, it established the Department of Human Settlement and Urban Development to coordinate access to “decent, affordable, resilient and sustainable housing communities to all Filipinos, particularly the underprivileged and those in the low-income bracket.”

The objectives of the DMW hardly compare to those of the abovementioned departments and existing departments.

By creating the DMW, the government is sending the message to the public that seeking overseas employment should be looked at as a fact of life or an integral part of the labor or employment program of the country. That it is so poorly governed it has to send its people abroad and suffer the consequences of such action to help prop its economy.

The DMW, in effect, institutionalizes a scheme that was originally conceived by the government in the 70s as an interim measure to help reduce domestic unemployment and shore up the country’s depleted foreign exchange resources.

What was supposed to be temporary has become permanent and even merited legislative action for that purpose.

Rather than subliminally encourage Filipinos to seek foreign employment with the creation of the DMW, the government should focus on developing conditions in the country that would give confidence to working-age Filipinos to stay at home.

When organized, the DMW would have the traditional bureaucratic complement of a secretary, undersecretaries and assistant secretaries, with the corresponding administrative support staff.

For now, we do not know how much money the DMW would ask from Congress to enable it to perform its assigned tasks.

Note that the budgetary allocation for 2022 of the Department of Science and Technology, which is one of the smallest departments in terms of staffing, is P24.268 billion.

It is reasonable to assume that the DMW’s budget would not be far from that figure. If one-half of that amount is instead allocated to the government offices that are presently attending to the needs of the OFWs, the objectives of the law can be accomplished at a lesser cost. INQ

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TAGS: Business, Corporate Securities Info, OFW Remittances

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