Advantages and Disadvantages of the Philippines Labour Export Policy

      Following a 1970s global recession and resulting economic crisis in the Philippines, unemployment became a crucial problem, the unemployment rate rising to 11.8 percent in 1970, which was very high in the history of the country. For this problem, former president Ferdinand Marcos saw that the export of Filipina labour would create an opportunity to reduce unemployment and solve the economic crisis. The Philippines Labour Export Policy was an important policy to decrease the unemployment ratio and developed the Philippines economically from the past to the present. In this article, I will analyze the advantages and disadvantages of this policy, along with lessons that Thailand can also learn from it.


1. Economic stimulation and reduced poverty nationwide
      The remittance received by Filipinos from their family members working abroad can improve their life quality, as well as meeting basic expenses, for example rent, family education, etc. Moreover, this personal expenditure has contributed to the economic growth of the country. Statistically, remittance returned to the Philippines has increased over the years. In 2011, the remittance from workers abroad accounted for more than 20 billion US dollars. This remittance reduced the poverty level and increased the international reserves of the country.

2. Assistance from Filipinos working abroad
      The social responsibility culture of Filipinos abroad has made an important contribution in their own country. More than 4,000 Philippines organizations exist around the world, such as the Filipino Alumni Organization, due to Filipinos in foreign countries having similar connections with their roots and background. So, these organizations help the Philippines with many projects for school and church development, public health, child institutional care and so on.

3. Skill development of workers in foreign countries

      Filipino workers have gained knowledge and skills from working in other countries. For example, personnel development and technological exchange result from the export of labour from Philippines to Japan. Traditionally, the Philippines and Japan have cooperated in technological exchange and the development of workers? capability through the Japan International Training Cooperation Organization (JITCO).


1. Less national development

      In the condition that the country has to depend on remittance, it has exceedingly affected country development. Specifically, brain drain is the problem that caused Philippines to lose high-quality human resources to work aboard instead of developing the country. Therefore, this problem is one of the factors that hinders Philippines from fast development in comparison with other countries in South East Asia. The reason is that exporting the Filipino labor aboard makes the production output in the country to be low. It also makes this country lack investment in many areas such as infrastructure, agriculture, export and social development. In addition, the families that depend on the remittance tend to work less. In terms of the country?s administration, being dependent on the remittance is also a crucial reason why the government cannot develop the country efficiently.

2. Shortage of skilled labour nationally
      One important factor forcing the Filipino workforce to work abroad is their higher income. For example, nursing is one important overseas health care occupation. When the income of nurses in the US and the Philippines is compared, the average income ratio of 10:1 can be considered an important factor drawing Filipino nurses to choose to work abroad, and consequently also causing a nurse shortage in the country. There has also been a doctor shortage in the Philippines since the year 2000, with more than 11,000 doctors having changed their careers in foreign countries into that of nursing. Moreover, in 2006 due to the higher income of nurses, more than 6,000 doctors chose to further their study in nursing programmes in order to be nurses abroad. Some teachers also changed their professional status in order to be maids in foreign countries and obtain a higher income. This phenomenon has tremendously affected the quality of the education and health care systems in the Philippines up until now.

3. Workplace harassment
      Filipino labourers, especially female workers, may face problems of violence in working in foreign countries, with such brutality possibly originating in the Philippines. For example, foreign workers forced by their families to work abroad may face many forms of violence, including physical, mental and sexual mistreatment in workplace conditions that are cruel, oppressive and isolated. Female workers of male bosses are moreover likely to be mistreated very easily.

4. Family problems  
      Due to the fact that parents need to work in foreign countries, children raised without parents tend to have more mental illness, compared to children born in  secure family settings with parents on hand.

      The Philippines Labour Export Policy has propelled economic development over four decades, reducing poverty and unemployment in the country. However, due to the brain drain and low investment nationally this policy is unable to develop sustainability in the Philippines. In addition, this policy has led to a shortage of human resources, workplace violence and family problems arising from conditions in which parents must work abroad. In conclusion, what the government of the Philippines must resolve is how the country can develop sustainably without depending on remittance.  

      Lessons for Thailand: Thailand is a country that depends on unskilled labour from foreign countries such as Myanmar, Laos, and Cambodia. At the same time, Thailand also exports Thai workers to other foreign countries, for example maids, chefs and other workers. Thailand thus should be aware of the free flow of skilled Thai labour in 2015, raising the question of how as a country Thailand would handle a shortage of skilled labour in the future as the Philippines has had to do and what the government should therefore do in order to make Thai labour competitive on the international market in the future. 

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Kriengsak Chareonwongsak
Senior Fellow at Harvard University?s Center of Business and Government.