Exploring Links between Education, Migration and Remittances: The Philippine Case

Abstract

For developing countries, remittances have long since surpassed official development aid as a source of external finance. Many countries with large migrant stocks receive more in remittances than in foreign direct investment. Here, we explore interrelationships between education, migration and remittances in the Philippines. Much literature has been devoted to debating brain drain versus gain as well as the costs and benefits of workers’ remittances. Here, we provide preliminary thoughts on how the recent global financial crisis informs these dynamics during changeable global conditions and its implications for other developing countries. As in other migrant-sending countries, remittances to the Philippines – the world’s fourth largest recipient of such inflows – were expected to fall substantially in 2009. Given difficult economic conditions in several destination countries, the knock-on effects of lost employment and stagnant wages were generally believed to cast ominous portents. Both the World Bank and International Monetary Fund (IMF) predicted declines, as did financial services providers Citigroup, the Royal Bank of Scotland and HSBC. The latter even predicted a 20 per cent decline in remittance inflows amid the crisis even though they have grown every year since 2001. Development administrators, too, have expressed wariness about falling remittances due to the crisis (Alexander, 2010). Remarkably, in not a single month did nominal recorded remittances to the Philippines fall on a year-on-year basis from 2008 to 2009, eventually totalling $17.3 billion (BSP, 2010). We believe that this is not a serendipitous occurrence but an outcome born of distinct policy choices. Although administrations come and go, migrant workers remain an indispensable constituency given their importance in helping to insulate the country from balance of payments problems. Moreover, the Philippine example holds insights for other labour-exporting countries. In this commentary, we will discuss preferences from the panoply of policy options that have helped create this result. Surpassing all others is the challenge to equip migrants with relevant skills that the global marketplace requires and that, in turn, lend them much-needed protection. Second is that of broadening geographic possibilities for migrants set against a global backdrop of widespread scepticism of and even outright disdain for open borders. Taken together, measures to address these challenges suggest that migrant-sending states will have a significant role to play as the global governance of migration remains a patchwork quilt at best.