OFW Migration

Fe Pauline C.
Yee November 14, 2019
ECOLITE –V25 SUMMARY/ANALYSIS GROUP 6
SUMMARY
The article “The economic impacts of international migration: A case study on the
Philippines” by Tereso Tullao Jr., Michael Cortez, and Edward See (2007) talks about economic
consequences of international migration. It was tackled that Filipinos migrated in other countries
since there are limited employment opportunities, rapid labour expansion, and an unstable
economy present in the nation. Additionally, the tightening labour market, aging population,
dislike for difficult jobs, and economic stability in other countries entice the labour force in the
Philippines to work overseas. Hence, Overseas Filipino Workers choose to work abroad since they
want to raise their standard of living and for them it is made possible through migrating and
working in another country.

ANALYSIS
In the 1970s, in order to address an escalating unemployment rate and balance of the
payment crisis, the Philippine government adopted a comprehensive range of policies that
systematically encouraged the export of labour (Mendoza, 2015).
Rappler. (2013). Number of OFWs Being Deployed [Image]. Retrieved

from https://www.rappler.com/nation/32361-ph-migration-report-ofws
As seen in the graph above, there are about 36 035, 327 784, 653 574, 988 615, and 1 802
031 OFWs being deployed in 1975, 1985, 1995, 2005, and 2012 (Lozada, 2013). Additionally, the
number of Overseas Filipino Workers (OFWs) in 2018 was about 2.3 million in which brought an
estimated 235.9 billion pesos in remittances to the country (Philippine Statistics Authority, 2019).
This data presents that over the past couple of years there is a constant increase in Filipinos
working abroad may it be land based or sea based due to the amount of money they can send to
their families.
Consequently, with the use of the Rational Choice Theory the paper can further understand
the reason behind the choice of Filipinos to work abroad. The Rational Choice Theory states that
individuals use rational calculations to make rational choices and achieve outcomes that are
aligned with their own personal interest (Ganti, 2019).
According to Rica J (2013), one of the reasons Filipinos choose to work abroad is because
of higher compensation. In the United States the minimum wage per hour is 23.70 USD which is
about 189.60 USD per day (Trading Economics, 2019). On the other hand, in the Philippines
minimum wage per day is 537.00 PHP (Trading Economics, 2018). Comparing both wages in
terms of the Philippine peso the average minimum wage per day in the US is greater by 9 103.00
PHP. The disparity between the wages entices workers because this means that there will be an
increase in household income. Another factor in the decision of OFWs choosing to work abroad
is the instability in the economy of the Philippines (J, 2013). Additionally, According to Shane
Hall (2019), one of the features of a stable economy is a manageable growth in GDP that does not
spark inflationary pressures that result to high prices. However, in the Philippines due to House
Bill No. 5636 there has been an increase in inflation rates. As of January 2018, the inflation rate
was 3.5% the highest inflation rate since 2014 which was 4.24% (Diaz, 2018). This lead to the
rise of prices in drinks with caloric and non-caloric sweeteners, SSBs, fuel and sin tax (Fenol &
Fuentes, 2018). In addition, the majority (54%) of OFW families belong to class D (Hidalgo,
2011). This shows that the income in these household are approximately between 7 890 PHP to 15
780 PHP monthly (Albert, Gaspar & Raymundo, 2015). Hence, since prices are increasing some
Filipinos choose to work abroad in a nation with a stable economy in order to send additional
household income to compete with the prices in the market.

There are numerous benefits of working abroad but all of it come at a cost. Some of these
costs are homesickness and loneliness, culture shock, discrimination, and leaving their families
behind (Natividad, 2012). However, even if these are the costs most OFWs choose to work abroad
because there are no quality jobs available in the country (Bondoc, 2014). According to Jose
Galang (2018), more than 4 out of 10 Filipino who are poor actually have jobs yet they still
continue to struggle with poverty since they are employed in poor-quality jobs. Additionally, being
employed in poor-quality jobs means that they are getting paid less than their counterparts in other
countries. If the benefits of working abroad is the same as the benefits as working here in the
Philippines most OFWs would want to work and come home. Commonly Filipinos work overseas
since it is the most rational choice in order to better their lives. Hence, with the use of the Rational
Choice Theory it explains why the numbers of OFWs have increased over the year and why they
choose to work abroad.

REFERENCES
Albert, J., Gaspar, R., & Raymundo, M. (2015). Who are the middle class?. Retrieved 12
November 2019, from https://www.rappler.com/thought-leaders/98624-who-are-middle-
class
Bondoc, J. (2014). OFW experience: At what cost to family? | Philstar.com. Retrieved 13

November 2019, from https://www.philstar.com/opinion/2014/10/06/1376935/ofw-
experience-what-cost-family
Fenol, J., & Fuentes, A. (2018). Cost of TRAIN: Will soft drink, fuel taxes offset higher take-
home pay?. Retrieved 5 November 2019, from https://news.abs-
cbn.com/business/01/04/18/cost-of-train-will-softdrink-fuel-taxes-offset-higher-take-
home-pay
Galang, J. (2018). ANALYSIS: Why many in the Philippines are poor. Retrieved 13 November
2019, from https://news.abs-cbn.com/blogs/business/04/19/18/analysis-why-many-in-the-
philippines-are-poor
Ganti, A. (2019). Rational Choice Theory Definition. Retrieved 11 November 2019,

from https://www.investopedia.com/terms/r/rational-choice-theory.asp
Hall, S. (2019). How is Economic Stability Measured?. Retrieved 11 November 2019,

from https://bizfluent.com/info-10049313-economic-stability-measured.html
Hidalgo, V. (2011). OFW families living the dolce vita. Retrieved 12 November 2019,
from https://business.inquirer.net/777/ofw-families-living-the-dolce-vita
J, R. (2013). 3 Common Reasons Why Filipinos Work Abroad | IRemit to the Philippines.
Retrieved 11 November 2019, from https://remit.com.au/3-common-reasons-why-
filipinos-work-abroad
Lozada, D. (2013). PH migration report: Number of OFWs increasing. Retrieved 11 November

2019, from https://www.rappler.com/nation/32361-ph-migration-report-ofws
Mendoza, D. (2015). Human Capital: The Philippines’ Labour Export Model. Retrieved 11
November 2019, from https://www.worldpoliticsreview.com/articles/15998/human-
capital-the-philippines-labor-export-model
Natividad, F. (2012). The Common Pros and Cons of being an OFW | Business Tips Philippines.
Retrieved 13 November 2019, from https://businesstips.ph/pros-and-cons-of-being-an-ofw
Philippine Statistics Authority. (2019). Total Number of OFWs Estimated at 2.3 Million (Results
from the 2018 Survey on Overseas Filipinos) | Philippine Statistics Authority. Retrieved
11 November 2019, from https://psa.gov.ph/content/total-number-ofws-estimated-23-
million-results-2018-survey-overseas-filipinos
Trading Economics. (2019). United States Average Hourly Wages. Retrieved 11 November 2019,
from https://tradingeconomics.com/united-states/wages
Trading Economics. (2018). Philippines Daily Minimum Wages. Retrieved 11 November 2019,
from https://tradingeconomics.com/philippines/minimum-wages
Tullao Jr., T., Cortez, M., & See, E. (2007). The economic impacts of international migration: A
case study on the Philippines [PDF] (pp. 1 to 63). Manila: Centre for Business and
Economics Research and Development De La Salle University. Retrieved
from https://drive.google.com/a/dlsu.edu.ph/file/d/1YCAtZ1cBDJTm8S0aEwaIHpHwdO
c5cTCw/view?usp=sharing

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Fe Pauline C.

Yee November 14, 2019

ECOLITE –V25 SUMMARY/ANALYSIS GROUP 6

working in another country.

systematically encouraged the export of labour (Mendoza, 2015).

Rappler. (2013). Number of OFWs Being Deployed [Image]. Retrieved

aligned with their own personal interest (Ganti, 2019).

household income to compete with the prices in the market.

choose to work abroad.

Bondoc, J. (2014). OFW experience: At what cost to family? | Philstar.com. Retrieved 13

Ganti, A. (2019). Rational Choice Theory Definition. Retrieved 11 November 2019,

Hall, S. (2019). How is Economic Stability Measured?. Retrieved 11 November 2019,

Lozada, D. (2013). PH migration report: Number of OFWs increasing. Retrieved 11 November

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