Domestic helpers help economy more than mining–study

MANILA, Philippines — Domestic helpers, one of the “lowest valued economic activities in the country,” contribute more to the economy than mining, an independent research think-tank has said.

Domestic household workers “contributed at least P167.4 billion worth of services and remittances to the economy” while the mining industry contributed only P122.1 billion to the economy based on the Mines and Geosciences Bureau, Sonny Africa of Ibon Foundation said in a recent statement.

In terms of job generation, “there were 1.95 million domestic help employed in the country, aside from some 1.3 million more overseas,” Africa said. In comparison, only 211,000 were employed in mining, Africa said.

Africa said in a later interview that they chose to look at domestic work “as a reference point to put mining into context because its among the lowest valued economic activities in the country, and moreover is something readily familiar on a daily basis for most Filipinos [including mining execs themselves].”

“We compared [domestic help and mining industry] mainly to underscore how exaggerated are the claims of mining firms [on] their contribution to the economy in the absence not just of significant domestic processing but, indeed more importantly, local industrial production,” Africa said.

Mining gives only “short-term benefits to local communities [and] last only as long as mines are operating,” Africa said. He added that “at best, mining is just sheer extraction,” so the benefits “end once the mineral resources are used up.”

Africa said that it was “important that the gains from this wealth be squeezed out throughout its value chain because we only have a short window to benefit from this [limited resource].”

Ibon computed the figures by multiplying the number of household workers and their average daily basic pay of P140.89 as gathered on data from the Labor Force Survey, and then multiplying this with the 365 days in a year, to get a total of P100.3 billion per year.

The figures from overseas were achieved by multiplying Ibon’s estimate of 1.3 million overseas domestic workers and their estimated monthly remittance of P4,300 or $100, to get the total of P167.4 billion

Need for domestic industry

“The long-term loss of Philippine mineral resources is irreversible,” Africa said.

In order for the Philippines to benefit from its limited mineral wealth, there should be a domestic industry “that processes its mineral wealth and uses these as inputs for manufacturing higher-value intermediate and final goods,” Africa said in another statement.

Mining firms currently just extract the country’s mineral resources which are exported for the benefit of foreign industries. These industries then process the minerals to create goods that the Philippines imports at a much higher price than when they bought the raw minerals.

The current value generated by mineral extraction and export is estimated to be $840 billion but “if there are Filipino industries to process these minerals and manufacture intermediate and final goods, these could be used to create at least US$7.3 trillion or more worth of products,” Africa said.

Cellphones are an example of how the natural minerals could be processed to create higher-value products, Africa said.

The typical low-end cellphone that costs P888 is estimated to contain 16 grams of copper, 350 milligrams of silver and 34 milligrams of gold, or around P102 worth of metals, Africa said. High-end cellphones that are more technologically advanced would need more minerals and are also priced much higher that typical cellphones, he added.

This means that the Philippine economy could greatly benefit from using its own mineral resources to create goods.

“The country will not be reaping the full benefits from the irreversible extraction of its mineral resources if there is no Filipino industry that processes these minerals and that also manufactures final goods,” Africa said.

Many jobs will also be created in the manufacturing industry that uses the processed minerals, Africa said.

“Increased mining will not accelerate economic growth and development if there is no domestic industrial base,” Africa said.

The government should not just seek an increased share of mining firms’ revenues from extracting raw materials but should actively create the conditions for the Philippines to get the larger benefits from manufacturing intermediate and final industrial goods,” Africa said.