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F ourth Annual National Transfer Account Workshop 2007 January 19-20, Berkeley, California

Foreign Sector and the National Transfer Accounts (NTA): The Case of the Philippines Researchers/Institution: Rachel H. Racelis and John Michael Ian S. Salas Philippine Institute for Development Studies. F ourth Annual National Transfer Account Workshop 2007 January 19-20, Berkeley, California.

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F ourth Annual National Transfer Account Workshop 2007 January 19-20, Berkeley, California

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  1. Foreign Sector and the National Transfer Accounts (NTA): The Case of the PhilippinesResearchers/Institution:Rachel H. Racelis and John Michael Ian S. SalasPhilippine Institute for Development Studies Fourth Annual National Transfer Account Workshop2007 January 19-20, Berkeley, California

  2. Foreign Sector and NTA: • Need to explore the significance and possible implications of overseas Filipino workers (OFWs) remittance in NTA analysis This presentation: • Shows preliminary results of analysis of age profiles of “OFWs” remittance and domestic workers’ earnings using 1999 data

  3. Context of Philippine Labor Export: • The Philippine government promoted the export of labor in the 1970s • Short-term solution to unemployment and balance-of-payments problems • Unemployment situation in the Philippines not changed substantiallyover the last 30 years

  4. number of “overseas Filipino workers” or OFWs • rose substantially

  5. OFW remittance as a share of source of labor • income is rising

  6. Question #1 and Findings: • How does the age profile of OFW and their remittance compare with those for local workers and their earnings? • The age distribution of OFW and local wage earners are similar. • Per worker remittance increases with age while per worker earnings of the self-employed by age has the inverted U-shape.

  7. Question #2 and Findings: • Have OFW remittances significantly influenced or reshaped the age profile of total labor income? • The general flatness of the distribution of total OFW remittance by age has not significantly altered the overall distribution of total local labor income by age. • But the upward shifts in local labor income due to the addition of OFW remittance differed slightly among age groups, with highest at 15% for 25-34

  8. Question #3 and Findings: • Has the addition of OFW remittance to household resources significantly influenced the overall pattern of lifecycle deficits or surpluses by age? • size of OFW remittance relative to the aggregate surplus varies widely across age groups, about 70 percent in the 25-29 age group and only 10 percent in the 55-64 age group • but it does not significantly alter the overall distribution of surpluses by age

  9. OFW-related estimation issues encountered: • OFWs are not included in survey household roster • Remittance from abroad is reported as a source of household revenue • OFW remittance reported in survey is net of OFW consumption if OFW consumption is to be included in household consumption – how to estimate and what to use for aggregate control if OFW is incorporated as a household member - what to use as sampling weights

  10. Thank you.

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