In a country facing so many problems, the estimated 8 million Filipino overseas foreign workers (OFWs) who live and work abroad are a rare bright spot in an otherwise bleak outlook. Officially, OFWs remit almost $10 billion of cash each year to the Philippines, normally in small amounts, to supplement and even substitute for incomes at home.
The government estimates that each year an additional $2 billion finds its way back to the country through non-banking channels. And the cash has been growing. According to broker CLSA Philippines, run rates suggest total remittances will hit 11% of GNP in 2005.
With that kind of contribution, the OFWs are keeping the Philippines economy afloat almost single-handedly.
"Remittances are larger than tourism, official development assistance (ODA) and FDI combined," says Guillermo Luz, executive director of Makati Business Club. "They are number two only to exports."
Although OFW remittances continue to dig the economy out of its fiscal hole, the system is not without its own challenges. Much of what gets sent back is consumed by dependent families, to supplement low or non-existent incomes at home. Very little gets invested, save for the shiny new condominiums sprouting in Manila and marketed abroad to relatively affluent returning overseas workers.