PH Can multiply growth through Labor export industry support—report
MANILA, Philippines – A Group of prominent economists led by globalization expert John Paul C. Tanchanco report that the Philippines has the core competence to continue to be the strongest economy in Asia amidst European, US recession and slowdown of China.
“The Philippines is very unique. It’s a powerful labor export economy. Evidently its market leadership through OFWs and BPOs shows that its core competence is its People … People Power” says Tanchanco, CEO of T1W and Makati’s BMBA charter President.
Tanchanco notes that the world is going through globalization. His research shows that each country is moving towards its own core competence through the invisible hand. Further analysis presents that the Philippines’ core competence is its human resource. The value for cost of human resource in the Philippines is very efficient compared to other countries in the market.
It has distinct leadership in quantitative qualities measuring work attitude, english proficiency, tenure, costs and efficiency. The country is also among the most preferred by major industries of developed and even developing countries.
Japan External Trade Organization supports Tanchanco’s research and reported that the country has a lower average labor cost than China, Malaysia and Thailand with productivity and skills that are higher than most its neighboring countries.
“In this era of globalization, investors abroad continue to look for cost efficient ways to increase bottom lines and to connect to the global economy… Outsourcing and hiring Filipino workers are one of the best solutions that even our neighbor developing countries have considered very profitable.” Adds Tanchanco who also created the Overseas Filipino Investors Program that was spearheaded by Malacanang PMS a few years back.
The respected economist, Dr. Lawrence Dacuycuy, who is chair of De La Salle University School of Economics also supports their research and believes that the country’s diligent English speaking human resource is one of the key driver of Philippines growth and resiliency.
“For every job laid off in developed nations, more jobs are created in BPO countries such as the Philippines. Furthermore, foreigners have considered Filipinos to be the best choice for labor intensive jobs in other countries,” says Dr Dacuycuy
“Our tight family values and bayanihan culture has also made us unique because a large portion of OFWs income from abroad are always shared hence our robust Remittances of over $20 billion and growing.” adds Tanchanco
NSO data supports the economists showing that 32 percent of all OFWs in 2010 worked as laborers and unskilled workers and they also sent majority of the total remittance received by the country in that year. The remittance sent by laborers and unskilled workers comprised the biggest share with P20.6 billion or an average remittance of P39,000 per OFW.
“Remittance inflows can be used to stimulate more growth and distribute income through a compounded multiplier effect if used widely. A study done that I advised on showed that it can also help redistribute income and reduce Income Inequality if channeled properly,” says Dr Dacuycuy.
Numerous research and policy recommendations created by Tanchanco and Dacuycuy have presented that Labor Export is a core competency of the Philippines. The money inflows from this industry can have a greater multiplier effect if channeled wisely into Investments. If the remittances are not channeled wisely into more investment activity, their studies using Family Income Expenditure Survey data from 1988 to 2000 show that income inequality worsens.
World Bank confirms that Philippines has the highest income inequality in South East Asia. Tanchanco’s study empirically validates that one factor that contributes to inequality is the Remittances. It also states that one way the country can decrease inequality is through channeling of inflows from the Labor Export Industry.
The Labor Export Industry is comprised of both the OFW and BPO industry. Their studies state that if a good portion of the money inflows that come in through this industry are channeled into Investments such as Small and Micro Businesses and Real Estate Rental Investments then a higher multiplier effect and more equal redistribution of income can happen across the country to compliment the healthy Disposable Income they bring to boost the country’s Consumption Spending, growth rates, reduce poverty and income inequality. This would also support the FDI’s and other Philippine industries that are growing such as Tourism, Agriculture, Real Estate, Retail and Manufacturing. The multiplier effect can help the Philippines attain its MTPDP goal of 7-8% that can even surpass China’s growth rate.
“We hope that this information can inspire the stakeholders of the labor export industry, their families, financial institutions and LGUs to create ways to channel Labor Export Inflows into more investments as we unite in achieving more prosperity for ourselves and the county,” adds Tanchanco.
T1W is the Expert authority on applied economics advisory and investing in the Philippines through alternative assets and commercial real estate.