'Remittances alone can't sustain RP economy'
abs-cbnNEWS.com | 06/02/2009 8:06 PM
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The government should not be too dependent on overseas Filipino workers' (OFW) remittances because these are not enough to sustain the declining economy, a group said Tuesday.
According to research group Ibon Foundation, the global economic crisis has already taken its toll on OFW remittances as its growth rate slowed to 2.7 percent for the first quarter of 2009 from 13.2 percent in the same period last year.
This, the group said, makes remittances an "unsustainable" source of growth for the economy.
"The drastic drop in gross domestic product growth in the first quarter of 2009, which pushes the economy to near-recession levels of 0.4 percent, indicates how overseas remittances are already failing to prop up the economy," Ibon said in a statement.
The country's GDP barely expanded in the first quarter at 0.4 percent from 2.9 percent in the same period last year. The latest figure is much lower than the government's 1.8 to 2.8 percent projection, and is the worst since the final quarter of 1998, during the Asian financial crisis.
Given this, Ibon urged the government to reverse its policies on economic liberalization, saying that these have further weakened the capacity of the economy to withstand the impact of the global crisis.
"The slow economic growth only underscores the urgency to put an end to government’s policies that overly rely on unsustainable sources of growth such as overseas workers' remittances and foreign investments," Ibon said.
"The country’s cheap labor export policy may be reaching its limits in the face of global migration trends in the last years and the global turmoil since last year. So many other countries have also been jumping on the migration bandwagon especially with the hype over the last decade of migration as a pathway to development. This has presumably been increasing the supply of migrants seeking overseas work worldwide," the group added.
Earlier, the Joint Foreign Chambers of the Philippines (JFC) said the country's strong remittance inflows will keep the economy afloat amid threats of recession worldwide.
In a report, JFC said money sent home by OFWs and revenues from the information technology services sector will support the continued growth of domestic consumption, allowing the Philippines to show positive GDP growth this year.
Technically, a country slips into recession when it posts negative GDP growth for two consecutive quarters.
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