Economy 5 MIN READ

Demand for Filipino migrant workers seen to continue

July 10, 2023By BusinessWorld

DEMAND for Filipino workers is expected to continue, as wealthier countries with aging populations look to fill labor shortages, the World Bank said on Monday.

“Given the need of migrants from other countries, think about nurses, the demand is going to increase. The population of the Philippines is younger and younger. There is an expectation that both the supply of international demand and the supply from the Philippines, the number of migrants, is going to increase,” Quy-Toan Do, lead economist of the World Bank’s Development Research Group, told reporters on the sidelines of a briefing in Bonifacio Global City.

In the World Development Report 2023 released in April, the World Bank noted that wealthy countries will need foreign workers to sustain their economies and “honor their social commitments to older citizens.”

“Many middle-income countries, traditionally the main sources of migration, will soon need to compete for foreign workers — and many are not ready to do so. Low-income countries have large numbers of unemployed and underemployed young people, but many of them do not yet have skills in demand in the global labor market,” it added.

In the Philippines, around two million workers or 5% of the labor force leave for temporary foreign jobs each year, the World Bank said.

In some parts of the Philippines, it noted that the rate of emigration is twice higher than the national average.

“We are comfortable making predictions that in 2050, the Philippines is still an expanding and a young population. The challenge of the (Philippine) demographic is not an aging population, but a young population that needs to find jobs either domestically or internationally. Making the economy of the Philippines productive is the challenge,” Mr. Do said.

The Philippines’ working-age population, covering those 15 years old and over, is estimated at 77.17 million as of May 2023, according to data from the statistics agency.

Mr. Do said that the country is “very much at the forefront” of maximizing the gains of migration, but noted the government should work on improving skills of workers.

“Migration is important both for destination countries and countries of origin. In destination countries, migrants bring relevant skills, dynamism, and diversity. In countries of origin, migrants provide vital support,” World Bank Country Director for the Philippines Ndiamé Diop said.

Digital technology will also make migration more efficient, he added.

“Digital technology allows, for example, a country like the Philippines to tap the talent that exists overseas while they are there. It will allow many workers to provide their services from a distance, in some cases even without leaving the Philippines,” Mr. Diop said.

“There’s a huge potential in the patterns of immigration and the way it contributes to destination countries, but also to home countries. I’m pleased the Philippines has made it a top priority. Digital technology will really be transformational not only for migration policies but in many areas in government,” he added.

Meanwhile, World Bank Senior Economist Soonhwa Yi said that there is a need to ramp up data collection to better manage migration.

“International migration is costly, mainly low skilled migrants incur these costs out of pocket. These may prevent poor, low skilled migrants from opportunities; this may push them to an irregular migration path that may offer cheaper options,” she said.

Ms. Yi also noted the importance of the reintegration of returnee migrants, citing the need for a comprehensive reintegration strategy. This would include support for employment, skills development, and social assistance.

Initiatives to support reintegration include pre-departure counseling and opportunities to develop skills to enhance employability.

The World Bank report also showed that Philippine migrants who have been able to accumulate “sufficient assets” will likely return to the domestic market.

Meanwhile,  Staffhouse International Resources Managing Director Marc Capistrano said one of the challenges that Filipino nurses face is that the education system in the Philippines does not meet the standards of the destination countries.

“The Philippines is widely regarded as the model of managing labor migration. Unfortunately, we are also one of the slowest. We’re all for protective mechanisms, but protection doesn’t mean being a hindrance or making it longer to gain opportunities. As long as the worker is recruited ethically and employers are (reputable), there should be no reason it should be delayed,” he said.

With the continued deployment of migrant workers, the Philippines will likely see a steady increase in remittances.

“All the trends seem to suggest that as more people migrate and have better jobs, remittances are going to increase and cost of remittances will drop. We see the increase in the volume of transfers. There are many factors that can change, which adds uncertainty, but remittances over the years have shown to be very stable and resilient,” Mr. Do said.

According to the World Bank report, the Philippines was the fourth top recipient of remittances in 2021.

Bangko Sentral ng Pilipinas (BSP) Deputy Director Mynard Bryan R. Mojica said that finance technology channels can help increase efficiency and lower costs of transactions.

In 2022, cash remittances sent home by overseas Filipino workers jumped by 3.6% to $32.54 billion.

For the first four months of the year, cash remittances increased by 3.2% year on year to $10.49 billion. — Luisa Maria Jacinta C. Jocson

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