COLUMN ONE : Living Off Expatriate Labor : Unable to find work at home, Filipinos have scattered around the globe; more than 380,000 live in Southern California. The money they send to relatives keeps Manila’s shaky economy afloat.
The ad boldly states a basic precept among Philippine expatriates in California--people who may have both feet firmly planted in a new life, but maintain deep attachments to the old one.
“Your remittance dollar supports more than just your family. It supports a nation,” goes the pitch in a recent issue of Philippine News by BPI Express Remittance Corp., one of the plethora of foreign exchange services that advertise in Filipino community newspapers.
Indeed, overseas Filipinos--even naturalized U.S. citizens who have immersed themselves in American culture--say they feel an abiding obligation to send money home to their kin.
The term “remittance dollar” doesn’t refer to major infusions of working capital or big investments in the Manila stock exchange. Rather, it’s a collective shower of small cash transfers, generated by Philippine professionals and contract workers who span the world. Their payments add up to an incredible sum--billions of dollars a year, the largest single source of hard currency for their struggling homeland.
“I still send back a few hundred dollars every month,” said Artemio Pagdan, a Pomona physician and Philippine community leader who immigrated in 1962.
Distinctive among the huddled masses of global economic migration, overseas Filipinos represent the elite, high end of the labor market. They are generally well-educated and usually accomplished speakers of English. But like other itinerant workers, they lack opportunities in the dysfunctional Philippine economy.
So women with college degrees serve as maids in Tokyo and Hong Kong. Doctors and engineers find employment in Saudi Arabia. Semi-skilled laborers toil in Kuwait, while Filipino seamen ply the oceans on the world’s ships. Filipino business graduates dominate the middle-management ranks of many multinational corporations in Southeast Asia, earning wages they couldn’t dream of at home.
Filipinos also make up one of the fastest-growing immigrant groups in the United States, accounting for more than one in every five newcomers from Asia since the end of World War II. Filipinos outnumber Chinese residents as the largest Asian population in Southern California, as well as in the rest of the state, and they place a close second nationwide, according to the 1990 U.S. Census.
Yet unlike Chinese or Korean residents, Filipinos tend to scatter rather than cluster in ethnic enclaves, quickly assimilating into the American mainstream. They are, in their own words, an invisible minority, poorly organized and grossly underrepresented in public office.
But Filipinos stand out, conspicuously, at the banks.
The U.S. Filipino community wires home about $1 billion in cash each year. As the BPI advertisement suggests, Filipinos not only support their relatives, but prop up an economy that was looted by the late President Ferdinand Marcos and, until recently, crippled by political turmoil.
The 1990 Census counted 1.4 million Filipinos nationwide, more than half in California. Unofficial population estimates go as high as 2 million. Whatever their numbers, Filipinos are the vanguard of a global expatriate community that includes 2.5 million more temporary contract workers in Asia and the Middle East, deployed in a Philippine government program for the jobless. (The latter group represents about 4% of the total population of 64.2 million.)
Sordid stories abound of forced prostitution in Japan, physical abuse by employers in the Middle East and recruitment fraud in Manila. The Philippine public was outraged earlier this year when Malaysian police, looking for illegal immigrants, rounded up thousands of Philippine maids attending Easter Sunday Mass.
Despite such controversy, no one is complaining about the influx of money. Annual worldwide remittances--through official banking channels as well as illicit cash courier services--are estimated between $2 billion and $6 billion.
These payments unquestionably are the largest single source of foreign exchange reserves available to the Philippine government, providing dollars for purchasing strategic imports and making payments on a $34-billion foreign debt. They also fuel a vast underground economy that has thrived through years of social chaos, official corruption and massive capital flight.
A couple of hundred dollars sent home each month can have a radical effect on people’s lives--building houses in depressed rural villages, paying off medical bills, sending little brothers and sisters and cousins to school.
“The remittances by overseas Filipinos to their families are considered direct foreign aid, because they do not go through the channels of corruption,” said Alex A. Esclamado, editor and publisher of Philippine News, which is based in South San Francisco and has a national distribution.
Philippines government statistics show about $1.7 billion was remitted by banks worldwide last year, but that figure doesn’t count the services of non-bank foreign exchange dealers. These money networks cannot pay dollars in the Philippines, but they can beat the banks on speed, delivering pesos overnight.
“It’s an intangible aspect of the local economy in the Philippines,” said Rodrigo De Leon, Los Angeles branch manger of the Philippine National Bank, whose branch alone remits as much as $45 million a year. “It feeds a good part of the population which would otherwise be disenfranchised.”
Cash also is routinely concealed in the traditional balik bayen (“homecoming”) crates shipped through specialized cargo handlers. Expatriates take cash to their relatives when they visit or entrust large sums to be hand-carried by friends; some use couriers hired by travel agencies, community sources say.
“It’s considered unusual for any Filipino to go home without a wad of money for their family, and it’s part of our culture to send home packages,” said Wilma Casaclang, deputy California labor commissioner in Los Angeles. “A good 90% of Filipino Americans have to send back money. It’s an obligation.”
In Tagalog, this obligation is expressed by the term utang na loob , literally “debt from within.”
The concept bears resemblance to the Confucian value of filial piety, but it applies to downstream relationships--younger siblings, for example--as well as to elders, patrons and authority figures. In a nation that is predominantly Catholic, large extended families tend to compound the debt.
Casaclang, who came to the United States 30 years ago, said she doesn’t send money home only because she’s the youngest in her family. But she paid her school tuition in the Philippines with remittances from seven older siblings working and studying abroad. Sometimes she “played tricks,” she confessed, collecting tuition from all of them at once.
“There can be negative effects,” Casaclang said. “People can lose their incentive to work, because the dollars keep coming.”
Indeed, analysts note that most of the overseas cash spills directly into the sieve of consumer spending, without collecting in savings accounts where it might be put to productive use by industry, creating jobs that might draw the Filipino expatriates back home.
“Their best asset is their human resources, and their No. 1 export is labor,” said Joyce Chang, an economist with Salomon Brothers in New York and author of a favorable report on the Philippine economy. “But overseas remittances aren’t important in capital formation or portfolio investment flows. I don’t see that they have much correlation to economic growth.”
Actually, gross national product expanded by a surprisingly robust 4.8% during the first quarter of this year, exciting interest among financial analysts who long have dismissed the Philippines’ economy as a basket case.
“I came back with the feeling that the economy had turned the corner,” said Suhas L. Ketkar, an economist with CS First Boston who recently visited the Philippines. “The change wasn’t necessarily economic, though. It’s the enhanced political stability, and the psychology.”
With this new flicker of hope, the Manila government says human exports--in the form of the government’s expansive overseas placement program--are only a short-term solution. It hopes the program will become unnecessary as the economy expands.
“It’s a temporary program, and we hope the numbers of overseas contract workers will lessen once the economy picks up,” said Manuel Imson, labor attache at the Philippine Embassy in Washington and a high-ranking official in the Overseas Employment Administration. “Unfortunately, we haven’t seen that trend yet.”
Filipinos in America, meanwhile, are warily watching developments back home.
The number of naturalized Filipino Americans seeking visas to reside in the Philippines has risen sharply in recent years, but the scale remains very small.
In Los Angeles, for example, the Philippine consulate processed 81 such applications in 1991; in the first five months of this year, 144 Filipino Americans applied for resident visas. The six counties of Southern California are, according to census data, home to 387,563 Filipinos, the largest concentration outside the Philippines.
So far, there are few signs of the kind of “reverse brain-drain” seen in the local Taiwanese and Korean communities, observers say.
“People would rather slug it out here. Most professionals would only consider going back as a last resort,” said Ernesto Cortez, a civil engineer and president of the 150-member Philippine-American Chamber of Commerce in Los Angeles.
“But as a businessman, I see opportunities that make it worthwhile to consider,” he added.
Cortez brought his contracting company to Los Angeles six years ago because “business was at a standstill” amid the political turmoil of former President Corazon Aquino’s administration. He had contracts canceled on the pretext they were “tainted by corruption,” a charge he vehemently denies.
Now Cortez plans to invest in a joint venture with an American design firm, using the Philippines as a base to target markets throughout Southeast Asia. He’ll split his time between his adopted U.S. home and his native land.
At this end, Cortez said his mission is to educate American Filipinos in entrepreneurship, which doesn’t seem to come naturally to many. Risk-averse and steady salary earners, Filipinos prefer to be employees, he said.
“The Filipinos who came here in recent years are career people,” Cortez said. “It’s only after the recession that a lot of professionals are realizing there are greater opportunities and considering going into business for themselves. But they’re doing it very cautiously, not jumping on a bandwagon.”
Filipinos got a late start in the American immigration experience, compared to other Asians who began arriving in the late 19th Century. Although the Philippines became a U.S. colony in 1898, Filipino contract laborers weren’t brought in to work the fields of Hawaii and California until the 1920s, after exclusionary laws barred entry by Chinese and Japanese.
Fred Quevedo’s father was among them, one of the venerable manongs (community “elders”) who arrived as a farm worker in 1924, later to become a labor organizer. California-born Quevedo, now a gynecological surgeon practicing in Burbank, grew up following the seasonal crops up and down the San Joaquin Valley with his family.
“Then I decided that education was the way out of there,” he said.
The younger Quevedo went to Manila, where he attended medical school and married a Filipina before settling in Los Angeles. He maintains strong ties to his ancestral homeland, returning once a year to conduct medical missions in rural areas. Keeping with tradition, Quevedo sent back cash to put his niece and nephew through school.
Gregorio Santillan, a biophysicist who teaches at California State University, Los Angeles, is another community leader who returns to the Philippines to share his expertise.
A former student dissident who was blacklisted for protesting martial law under Marcos, Santillan went back last year to help set up a bio-technology program at the University of the Philippines. He is a volunteer in a Manila government program called Transfer of Knowledge Through Expatriate Nationals.
“Overall, I felt the situation was very optimistic,” he said of his visit, “even during the electricity brownouts.”
But Santillan said he is not quite ready to participate in yet another government program--one that offers special incentives for Filipino scientists willing to return.
“We’ve considered it, but I think I can contribute more to the country by not going back permanently. As a scientist, there’s better access to information here,” said Santillan, who has retained his Philippine citizenship, even after his wife became a naturalized U.S. citizen and his children were born here.
“It’d be difficult for my family to go back. The kids are in school; their lives are here,” he said. “We’re very attached to the Philippines and in touch with what’s happening there, but we’re very American too.”
Filipinos are among the most rapidly expanding immigrant groups in America and now account for the largest Asian population in Southern Califonia and the state as a whole.
FILIPINO POPULATION / U.S. Total 1970: 346,060 1980: 774,640 1990: 1,406,770 ***
IMMIGRATION TO U.S. BY COUNTRY OF BIRTH
Top three homelands over last decade. Data are for fiscal years.
1984-93 1991 1992 1993 Mexico 2,723,321 946,167 213,802 126,561 Philippines 552,926 63,596 61,022 63,457 Mainland China 329,411 33,025 38,907 65,578
AVERAGE HOUSEHOLD INCOME BY ETHNIC GROUP
Southern California, 1990* Filipino: $50,517 Other Asian: $46,917 White: $50,177 Hispanic: $34,081 Black: $32,659 Avg. all groups: $45,179
* Los Angeles, Orange, San Diego, Riverside, San Bernarino and Ventura Counties.
Sources: U.S. Census, Immigration and Naturalization Service
A Dysfunctional Economy
With a legacy of corruption and political instability, the Philippines lags far behind other Asian developing countries in economic growth. The government estimates that 2.5 million of its citizens--nearly 4% of the population--are engaged in contract work overseas. Estimates of the money they send home run as high as $6 billion.
ECONOMIC PROFILE Population (1992 estimated): 64.2 million Overseas Contract Workers (1991): 2.5 million Gross Domestic Product (1993): $53.7 billion Cash Sent Home by Filipinos overseas: $2 billion to $6 billion Of that sum, funds sent by banks: $1.7 billion Per capita GDP: $807 Inflation rate: 8.4% Total exports: $10.9 billion Total imports: $10.7 billion ***
ECONOMIES OF SOUTHEAST ASIA
Economic growth (1993) Singapore: 9.7% Malaysia: 8.4% Thailand: 7.6% Indonesia: 6.7% Brunei: 2.0% Philippines: 1.6% ASEAN overall*: 6.8% * ASEAN is the Assn. of Southeast Asian Nations
Sources: U.S.-ASEAN Council; World Bank; Philippine Overseas Employment and Workers Welfare administrations.