Exodus: Movement of the People

International Labor Migration & Remittances in the Philippines

Overseas Filipino workers are all over the world

Quick Facts

• Approximately 8 million Filipinos, or 10% of the population, are currently working overseas.

• Filipinos are in over 200 countries around the world.
  

• According to government figures, 2,700 Filipinos leave the country everyday, not including unauthorized migrants.

• During the Spanish colonial period (1565-1898), sons of the emerging middle class known as illustrados were sent to Spain to study while working class men served on ships that moved between Manila and Acapulco (Tullao).
  

• During the American colonial period, colonial ties allowed easy entry of Filipino workers to the plantations of Hawaii and California in spite of restrictive immigration policies toward Japanese and Chinese (Tullao).
  
• Filipino scholars, known as pensionados, went to the U.S. to study.
• Filipinos were also permitted to enter the U.S. Navy.

• U.S. liberalization of immigration policies and removal of quota system in the 1960’s opened the doors for Filipino professionals, particularly nurses, doctors, accountants, engineers, and teachers (Tullao).
  
• The passing of Tydings-McDuffie Act set restrictions on migrant professionals which prompted Filipino overseas workers, especially nurses, to look for jobs in other countries such as the UK, Canada, and Australia.

• Filipino migrants to the U.S. generally remain as permanent residents (Tullao). Permanent residence; however, is mainly offered only to high-skilled workers, whereas low-skilled workers (factory workers, maids, entertainers) generally have temporary work contracts of 6 months to 3 years.
  

Filipina entertainers train to work abroad as singers and dancers

• Filipino temporary migration (Tullao)
  
• Indonesia and Malaysia were popular in the 60’s for jobs in logging and construction.
• Filipinos were ubiquitous as musicians and entertainers in major cities around Asia during the post-war years.
• The oil boom in the 70’s expanded economies in the Middle East. The economic growth attracted Filipinos both skilled and unskilled.
• East Asia growth in Japan, China, Hong Kong, Singapore, South Korea, etc. has attracted many Filipinos working as entertainers, factory workers, domestic helpers, and construction workers.
• Filipino seafarers dominate the world's maritime industry.

• The Philippines has a long tradition of international labor migration with annual outflows rising from a few thousand in the early 1970's to 867,000 in 2001. Filipino migrants generally travel to the Middle East, Japan, Hong Kong, and Singapore for work (Yue).
  

Makati, Manila- The Manhattan of the Philippines

Human Capital

Migration is inextricably linked to the Philippines. From colonization to independence, the pearl of the Orient has been a cultural melting pot for centuries resulting in opportunities for overseas work and studies. More recently, local economic depression, unemployment, and underemployment have fueled demand to work abroad and earn higher wages.

In recent years international labor migration has become increasingly important to the stability and growth of the Philippine economy. In the Philippines, local industries such as call centers and business process outsourcing firms are growing and serve as welcome sources of employment for college graduates; however, these budding industries generally employ only the wealthy, or those who can afford higher education, thus leaving the poor to earn minimal wages driving jeepneys or tricycles or perhaps running a karinderia, a cheap roadside food stand. More often than not, unemployment is the reality of the poor in the Philippines. And despite the hype of a strong peso and the billions of dollars from remittances, the Philippines remains a country where, according to the World Bank, 48% of the population lives on less than $2 a day, a rate that hasn't changed in at least the last 10 years.

Squatter settlements like these dot the Philippine landscape

The Grass Really is Greener
The unemployment rate has hovered at 11% for the last few years. There are not enough jobs. The jobs that do exist do not pay well and do not fully utilize the skills of the work force. College graduates work as messengers, waitresses, and bellboys. Starting salary for these positions can be as low as $5 a day. Underemployment is the norm (23% in January of 2006). Those without college degrees are less fortunate- the available jobs pay even less and many face unemployment.

The Philippine economy is not developed enough to fully utilize its human capital. Because of this, skilled and unskilled workers look abroad to greener pastures where suitable jobs and higher wages can be found.

Eight million Filipinos work overseas, including many high-skilled workers who become permanent residents

Developing countries have done their fair share to capitalize on the glut of labor in the Philippines, and other third world countries for that matter. Developed countries often experience labor shortages as their populations age and their reproductive rates decrease. This can decrease labor productivity, increase cost of labor, and over time cause markets to shrink. An effective way to maintain economic growth and hurdle the aforementioned obstacles is to attract professionals and high-skilled migrants from abroad, thus filling the gaps in the labor force. High wages and relaxed immigration policies such as permanent residence entice the high-skilled workers to emigrate while low wages and unemployment at home push them to leave. All this means the Philippines has almost no chance of retaining its high-skilled workers who instead migrate, often permanently, to countries like the U.S., Canada, and Australia.

The exodus of skilled workers in the Philippines, if unchecked, can eventually lead to brain drain, or loss of local productivity caused by excessive emigration. This loss of productivity can increase the cost of labor, which may in turn decrease the demand for labor and result in the shrinking of local industries- similar negative effects that developed countries would face if they did not import labor. While migration to labor import countries such as the U.S. relieves the burden of unemployment in the Philippines and provides an injection of foreign currency to the economy, it can also create a labor shortage at home and end up hurting local industries.

Foreign Aid

While the Philippine economy may not directly benefit from the intellectual capital of its high-skilled workers, migrant workers are playing a key role in keeping the economy afloat by sending funds, or remittances, to families at home and providing a much-needed source of income.

The Philippine government is making it easier and cheaper to send remittances home so more of the funds pass through official channels and are counted

Remittances are the fruit of migration for the Philippines. They are the reward for sacrificing labor productivity at home and potentially putting local industries at risk. They are the reward for being isolated from family and loved ones for sometimes years on end. And they enter the country by the billion- $12 billion last year to be exact (and another estimated $8 billion through unofficial channels for a total of $20 billion).

Remittances are the reason the Philippines has been able to avoid falling into economic trouble. They are the reason that President Gloria Macapagal Arroyo is able to tout the economic strength of the Philippines despite the brazen poverty visible in almost every community. They are the reason that plasma TVs sit in living rooms, that gleaming villas sit newly constructed next to the neighbor's shack, that brothers, sisters, cousins, and second cousins are sent to school, that tita (aunt) can get the operation she needs and pay for the necessary medication afterwards, that families can sit at home unemployed and wait for checks or cash in the mail, that a culture of migration develops that relentlessly promotes the romanticism and fantasy of working abroad, and that the Philippine educational system has been focusing on skill sets, such as nursing, that are most appealing to international labor markets.

Caregivers, a profession in demand abroad, learn how to move a bedridden patient out of bed

International Migration- Pros & Cons
An Asian Economic Policy Review article by Siow Yue summarizes the benefits of labor migration:

The bulk of the economic gains from international labor migration accrue at the micro level to the migrants and their families and these gains are often large, as wage levels in receiving countries are much higher than what these migrants received back home in similar occupations. At the macro level, the labor-exporting country benefits from remittances received, and from skills and experiences gained when these migrants return.

Remittances augment domestic savings and provide a steady stream of foreign exchange earnings that help overcome the balance of payments constraint and
improve a country’s credit worthiness for external borrowing.

Remittance-funded houses like the one above provide a stark contrast to the wood and palm leaf houses of the neighbors

A recent case study by Tullao et al summarizes the positives and negatives of labor migration:

Positives of human capital/migrant labor include employment opportunities out of country that may not exist in-country, alleviation of pressure on local economy, remittances and increase in quality of life for those receiving them, injection of foreign currency into local economy, stability of local currency, brain gain (technology/skills transfer of returning migrants).

Negatives of human capital/migration labor include the substantial opportunity cost of overseas employment, decrease in productivity of local economy and comparative advantage (especially if a large number of highly skilled workers emigrate), cost of training for those left behind (especially if education has been subsidized by the state), brain drain, and labor shortage.

Higher education is generally accessible only to the wealthy leaving the poor with few employment options

An Uncertain Future

As the Philippines becomes increasingly dependent on remittances, the local economy will become less significant except to serve as a training ground for new workers to gain experience before going abroad. As stated above, brain drain and labor shortage can threaten local markets and fuel unemployment (increased labor cost as productivity declines can cause decreased output which can shrink markets and decrease jobs). At least families receiving remittances will be shielded economically from political instability and other crises (family illness, unemployment, natural disaster) because a significant portion of their income is derived from stable, external economies outside of the Philippines.

Another effect of remittances has been an improvement in the exchange rate of the Philippine peso, 6.8% against the U.S. dollar so far this year. Normally an increasing exchange rate signals a healthy economy, and in the case of the Philippines it does, except not that of the local economy, but rather of the economies of developed nations that employ Filipino migrants. An increased exchange rate makes exports more expensive, and therefore less attractive, to the international market and also cuts into the profits of call centers and business process outsourcing centers in the Philippines. A higher exchange rate also reduces the value of remittances, which in turn decreases the buying power of families who depend on overseas income.

And this article hasn't even addressed the social cost of international labor migration- of breaking apart families, of mothers, fathers, sons, and daughters working abroad for years on end, unable to come home, and becoming less a family member and more a provider of money, a source of income. The challenges of working in another country, the racism and abuse overseas Filipino workers can face, the very real dangers of being trafficked and enslaved, and the hardship of being away from friends and family are obstacles all migrants must confront. While international labor migration may be necessary to build the Philippine economy, it must be aknowledged that there is a significant social cost to this strategy and programs to support migrants before they leave, while abroad, and upon return must be effectively instituted and implemented by the government in partnership with labor importing countries like the U.S. and supported by non-governmental organizations to ensure that overseas workers receive the support they need at each stage of the migration process.

The Philippines' long relationship with migration has had its share of positives and negatives: while the country receives much needed cash from abroad, this same monetary inflow works to stunt local economic growth and increase the gap between rich and poor, which is a huge gap since almost half the population lives on less than $2 a day. While migration labor employs those who would either be underemployed or unemployed at home, it also creates brain drain and labor shortages in local markets. It has been found that many high-skilled workers stay abroad permanently, which does not promote brain gain where the Philippines would benefit from their newfound skills and intellectual capital. Whether international labor migration will lead to significant local economic growth in the long run is still open to debate, but from government quotas of 1 million plus migrants a year to the flourishing culture of migration, for better or worse the Philippines has whole-heartedly adopted international labor migration as a prime strategy for economic development.

But how does this relate to human trafficking?

Find out in part two coming later this week...

Sources
The Economic Impacts of International Migration: A Case Study on the Philippines
Tereso Tullao, Jr., Michael Angelo Cortez, Edward See
Center for Business and Economics Research and Development
De La Salle University- Manila, Philippines

Labor Mobility and East Asian Integration
Siow Yue CHIA
Singapore Institute of International Affairs
Asian Economic Policy Review (2006) 1, 349–367

Table Scraps

An update on my most recent activities:

1) Trekking through the jungle barefoot braving armies of biting ants, gigantic centipedes, river spirits, muddy slopes, and tropical heat to film for my documentary on trafficking. Despite multiple near-death experiences it was worth the wild baked mini-crabs (just pop them in your mouth), the shower in the mountain spring, and being swallowed by the jungle far away from cell phones, iPods, and my computer.

2) Trekking through the inner city down streets choked with colorful patoks (jeepneys), cruising police paddy wagons with lights flashing, sixteen year-old prostitutes, and gangs of irate city workers wielding wooden clubs who harass the working girls, again to film my documentary.

3) Interviewing government officials on the efforts, successes, challenges, and frustrations of combating trafficking in the Philippines for my research project.

4) Recording the final tracks for my album "Beat Down Human Trafficking," which will be available on the Human Trafficking Project's soon-to-come website late July.

5) Working with a web designer to create said website that will house my various trafficking-related projects.

And much more... but I have been neglecting the blog.

Article of substance coming soon, plus some surprises in the near future...

New York to Adopt Long Needed Anti-Human Trafficking Legislation

May 16th, 2007:

Governor Eliot Spitzer, Lieutenant Governor David Paterson and legislative leaders today announced an agreement on legislation that will combat the trafficking of human beings. The legislation makes Sex Trafficking and Labor Trafficking felony-level crimes and provides access to state social services for trafficking victims.

Read the official press release here.

The Trafficking Victims Protection Act of 2000, a federal anti-trafficking law, was passed in the United States in 2000. New York will join 29 other states in adopting state level laws to address trafficking.

For states without anti-trafficking legislation of their own, human trafficking is a crime but there's no state law against it. This means only federal authorities can pursue traffickers- the problem is federal prosecutors don't have the resources to go after smaller-scale traffickers and instead focus on prosecuting the biggest cases.

Last year the New York State Senate and Assembly passed competing anti-trafficking bills and could not reach an agreement on final legislation. The issues of contention included how much to punish customers of prostitutes and what help to offer victims of trafficking willing to testify against traffickers.

In the soon-to-be-passed legislation, the lowest-level patronizing a prostitute crime will be elevated from a B to an A misdemeanor. Assistance available to victims of trafficking includes case management, emergency temporary housing, health and mental health care, drug addiction screening and treatment, language and translation services, and job training. Victims can also apply through the federal government for special T visas that allow the victims in the United States to testify against the traffickers and eventually becoming eligible for refugee status.

The adoption of state level anti-trafficking laws is an important step in combating trafficking allowing local law enforcement and criminal justice systems to address the issue, instead of leaving it to federal prosecutors, and providing state level social services to assist victims of trafficking.

This Week in the Philippines #2

Vote-Rigging, Medical Tourism, and Human Trafficking: Shaken, Not Stirred

Philippine President Gloria Macapagal Arroyo shows her finger marked with indelible ink after casting her vote in her hometown of Lubao. (Source: Corbis)

Philippines Probing Election Cheating
After the dust settles from the May 14th elections, allegations of vote-rigging abound.

The Philippine Peso Gains on the Dollar
Remittances and foreign investments are credited.

The Emerging Industry of Medical Tourism in Asia
High-quality medical care on the cheap, and afterwards you can get a facial and relax on a private beach.

Four Jailed on Human Trafficking
The Philippine justice system lives up to its name.

UN Criticizes Japan on Sex Slaves
Japan denies involvement in government-sanctioned forced prostitution of women across Asia for its soldiers during WWII.

This Week in the Philippines #1

Election Season: Let the Madness Begin...

*This Week in the Philippines is a new section that will provide a weekly glimpse into the political and cultural climate of the Philippines.



Vote Osama Bin Laden
Educator, environmentalist, peace advocate?

Nation goes to polls today
What's at stake: 12 senators who will serve for six years and 250 congressmen and partylist representatives, 81 governors, 81 vice governors, 770 provincial board members, 118 city mayors, 118 city vice mayors, 1,510 municipal mayors, 1,510 municipal vice mayors, 1,322 city councilors, and 12,092 municipal councilors.

Police form task forces to curb election violence
173 election-related violent incidents, 113 dead, and 121 wounded

Politicians and their private armies go overboard
Pistol packin' politicos, high powered rifles, and unlicensed firearms

Election fraud
A recent survey shows that 70% of the public in Metro Manila expects there to be cheating in vote-counting

Until next week...

Pacman the Politician

Manny Pacquiao: Boxing Hero, National Icon... Politician?



Jorge Solis falls in eight rounds to the whirlwind of oddly angled ferocious hooks, upper cuts, and never-ending combinations launched by the Tasmanian Devil of boxing known as Pacman.

Manny "Pacman" Pacquiao is a national hero of the Philippines who has toppled dozens of contenders, including legendary Mexican fighters Erik Morales and Antonio Barrera, with his flurries of non-stop punches that drop his opponents to the canvas (his current record is 44 wins, 3 losses, and 3 draws).


Pacquiao vs. Solis- Sunday, April 15th, 2007 in San Antonio, Texas

In the Philippines you can see Pacman in advertisements ranging from karaoke machines to ice cream, soy sauce to socks, sports drinks to beer (including a new commercial with former rival Erik Morals). In short, his smiling mug is plastered on just about any billboard space available. A Pacquiao fight is like an undeclared national holiday in the Philippines. The country shuts down, the streets are empty, and everyone is huddled next to their television sets anxious to see their chosen son bring one more victory home for the pride of the Philippines. When he returns from fights Pacquiao is greeted by screaming fans and politicians alike and treated like royalty. He is also sent congratulatory messages from the president.


The new San Miguel Beer commercial starring Manny Pacquiao and Erik Morales

On a sunny Sunday morning in April I watch the Pacquiao-Solis fight in a packed movie theater. The audience cheers with each Pacquiao punch and gasps as his opponent, the relatively unknown but previously undefeated Mexican fighter Jorge Solis (32 wins, 2 draws prior to the fight), connects with his own punches. More details on the fight from ESPN.

After Pacquiao is announced the winner to his adoring masses, the lights have dimmed, and the gloves are cut off, Pacman must now prepare for a different kind of fight. Manny is running for a congressional seat in his hometown of General Santos City, Mindanao in the upcoming May 14th election. The opposition candidate for reelection, Rep. Darlene Antonino Custodio, is the youngest legislator in the country and a member of one of the elite political families from Mindanao.


Darlene Antonino Custodio- Pacman's competition

With political and financial power hanging in the balance, elections in the Philippines are a dirty business.

From In Asia:

Though the highest office in the land is not on the ballot, citizens will vote for 17,889 different positions at different levels: Senators (twelve elected nationwide), Members of Congress (both district and party list), provincial governors, vice governors, and board members, and city or municipal mayors, vice mayors, and councilors.

From Reuters:

So far [in 2007], 95 people have been killed since campaigning started in January, including two gunned down last month when police acting as bodyguards for rival politicians exchanged fire at a road block. In the 2004 presidential elections, 189 people were killed and 279 wounded.

"Elections in the Philippines have always been violent," said Benjamin Lim, political science professor at Ateneo de Manila University, adding mid-term polls were more bloody due to intense rivalry among local politicians. "The stakes are much higher. If they lose, they will lose prestige, money and connections because political offices have been a source of good income for our politicians."

Recently Pacquiao has openly accused Ms. Custodio's camp of offering P 100 million (2.1 million US) to have him killed, a charge which Ms. Custodio vehemently denies. Pacquiao has responded by doubling the size of his personal security detail and rallying the support of actors and entertainers for his candidacy.



As election day draws closer, please browse the following articles to get a taste of the cult of Pacquiao, his entry into politics, and the inevitable drama of election season in the Philippines:

1. Pacland- The Official Manny Pacquiao Website
2. In the Philippines: The Build-up to May 14th Elections (In Asia)
3. Election Violence Escalating in the Philippines (Intl. Herald Tribune)
4. Pacquiao Announces His Decision to Enter Politics (The Manila Bulletin)
5. Pacquiao Accuses Political Rival of Assassination Plot (GMA News)
6. Rumor of Pacquiao Ambush Spreads (GMA News)
7. Pacquiao Hires Additional Security (ABS-CBN News)
8. Pacquiao Supporter Switches Sides (GMA News)
9. Split Personality: Pacman vs. Politician (The Manila Times)
10. Election Season Violence In the Philippines (Reuters)
11. Yet Another Victim Linked to May 14th Elections (Asia News)

Ready, get set, vote!

Cooking Up Profit

Social Entrepreneurship as a Key to Development in the Philippines

Written by Justin Hakuta

Water boils. Machinery grinds and whirls. Dough is shredded into thin ribbons.



I am at a factory in Davao, Mindanao surrounded by piles of pancit, the ubiquitous noodle of the Philippines sold by the kilo, boiled or fried, and devoured by the ton with vegetables and a combination of shrimp, chicken, or pork topped off with a dab of fish sauce and calamansi, the Filipino version of lemon.

But this is no ordinary factory—it is an enterprise funded by the heroes of the Philippines, the balikbayans or overseas migrant workers who are single-handedly saving the Filipino economy from plummeting into disarray one foreign dollar at a time (in 2006, remittances totaled between 12-14 billion US). Two seafarer brothers, the Jandugs, have combined their savings to build this noodle factory named Best Choice, a prosperous, family-owned small business run by a third brother, an ex-teacher who manages daily operations.



Launched in 2001 with the brothers’ savings and a loan from Unlad Kayaban Migrant Services Foundation (Unlad), a social entrepreneurship-focused NGO, Best Choice produces two varieties of pancit (canton or bihon, thick or thin) as well as fruit preserves of coconut and different beans used to make the popular Filipino desert halo-halo, literally mix-mix.

Now self-sustainable, Best Choice has a full-time staff of 22 and has managed to fill a niche market supplying supermarkets and department stores with freshly made noodles and halo-halo ingredients, all while beating off the competition’s cost undercutting by providing a superior quality product and service with a smile.



But this transition from savings to concept, from start-up to self-sustainability did not happen overnight.

Migration Nation
The Filipino economy is heavily dependent on remittances, or money sent home from workers abroad. It is an oversimplification to say that this alone contributes to a stagnant local economy. But a dependence on international labor markets where close to a million workers per year, including many of the country’s best and brightest, seek employment elsewhere has an undeniable impact on the local economy’s productivity and ability to generate new jobs.

I won’t go too in-depth on this topic, Filipino labor migration has been covered in a past entry (click here); however, it is within this culture of seeking a better life through international employment that I stumble upon Best Choice, which was built from the savings of overseas Filipino workers (OFWs) and is now generating jobs and creating economic activity in a community where previously there was little.

Studies have shown that OFW savings are generally spent fulfilling the basic needs of the family: improving housing, funding educational opportunities for children, and starting or investing in small businesses such as sari-sari stores (your local bodega shop) or money lending businesses. The issue with starting businesses is that many OFWs lack the technical or financial skills required to run a successful operation.

Oftentimes the go-to business solution for returning migrants is to open a sari-sari store. This business can potentially be doomed from the start for a number of reasons including the following:

1) If you create a sari-sari store that is one of say twenty other sari-sari stores within several blocks radius, carving out your niche will be tough. Unless you have a unique product line or genius marketing skills, more than likely you will be one amongst a crowd of stores who are saturating the market with candy, cigarettes, chips, soap, and bubblegum. There is actually a Filipino term for killing a successful business through market saturation. It is called the “hot pandesal syndrome” which refers to the delicious semi-sweet buns you can buy freshly baked on almost every block in the Philippines. Essentially when one pandesal store opens and becomes popular in a neighborhood, the hordes soon follow until there are so many pandesal joints that profit amongst them becomes close to nil. The same phenomena can be observed with water purification stores, chicken breeding, or cell phone accessories—name a popular product and chances are “hot pandesal syndrome” has already struck it.

2) Beware the family, for they eye your products with hunger. It is not uncommon for family members to use the food, drinks, etc. of their sari-sari store without paying for them. While skimming from the top of the inventory may be necessary for those who would otherwise spend the day with an empty stomach, it ultimately results in the store taking a financial loss, and with the size of Filipino families, this loss could be quick and devastating.

Avoiding a variety of these common pitfalls, Best Choice represents something refreshing and unique amidst the economic landscape. It has secured deals with its clientele—as long as its product maintains its quality and reasonable price, it will retain its accounts and beat back the competitors. Because of Unlad’s business trainings and ongoing support, management is equipped with the skills to run a successful business. Complemented by a committed, happy-to-be-employed staff, who by the way receive full healthcare coverage, Best Choice has become self-sustainable and is able to provide jobs to community members with plans of expanding in the near future.



Best Choice is an example of a need being identified, in this case a lack of noodles and fruit preserves, and met with sound business skills and know-how. Best Choice is an example of money being used to not only generate profit for an individual and his/her family, but also to create jobs where previously there were none, and share the wealth. It is a glimmer of possibility for the Filipino economy that the billions of dollars pouring in from abroad can be used towards creating local employment opportunities, where perhaps one day Filipinos will be able to choose between staying in their country or moving abroad for work out of preference, not necessity.

A For Profit Non-Profit
Unlad Kayaban Migrant Services Foundation (Unlad) is a humble non-governmental organization (NGO) with grand ambitions. Tucked away in a quiet Metro Manila neighborhood next to the University of the Philippines, Unlad is one of the organizations at the forefront of social entrepreneurship in the Philippines.

Unlad originates from migrant labor roots. In 1989 its founder and current Executive Director, May-an Villalba, a former teacher, established the Asian Migrant Centre (www.asian-migrants.org) in Hong Kong, which focused on legal assistance and crisis intervention for migrants. Invariably after each case, migrant workers would look for a new employer no matter how harrowing their experiences had been because they had no job opportunities at home and their families depended on them for income. The only option was to find a new job abroad and pray for an employer who would not abuse them.

It was this lack of opportunity and vulnerability of migrant workers that spurred Ms. Villabla to build a mechanism whereby migrants could work abroad in the near-term, but create long-term opportunities in their hometowns so that they would not have to migrate for lack of work or money. In 1996, Ms. Villalba formed Unlad Kabayan to become the dedicated vehicle to develop this concept in the Philippines.

More about Unlad Kabayan straight from the horse’s mouth:

Our strategy is to empower local communities in the Philippines to build strong and sustainable communities through enterprise development. We are different in that we work with previously untapped sources of entrepreneurs and finances: migrants and remittances. As of 2006, nine million Filipinos reside and work overseas, earning and sending money to their families for primary needs and personal consumption. These monies are called remittances, which in 2005 totaled $10.7 billion. If mobilized, remittances can jumpstart local enterprises, creating jobs and income for local people. Unlad works with migrants to curtail extraneous spending and to save and invest in projects that will raise the socio-economic well-being of local communities.

Unlad was established in 1996 to respond to the urgent need for migrant workers to plan and organize their return to the Philippines. In 1994, it started as a special program of the Asian Migrant Center based in Hong Kong organizing savings associations [or groups of migrants that save a percentage of their earnings] as a capital build-up mechanism that would establish income-generating activities in the Philippines.

As it mobilized savings, investments and building enterprises, Unlad realized the potential for migrant savings to generate jobs and income for the unemployed and to support the livelihood of poor farmers and workers [at home in the Philippines]. Upcoming entrepreneurs and small enterprises also confront problems that usually cause their businesses to fail, such as lack of management skills, knowledge and technology. To counter these problems, Unlad [employs training sessions and ongoing project monitoring] towards [developing sustainable businesses that can] compete in a dynamic and challenging economic environment.

Since 1994, Unlad has been involved in migration at various levels, both in addressing its benefits and harnessing it as a tool for socio-economic development.

Through Unlad’s programs, products are created, jobs and incomes are generated, economic transactions in the community are stimulated, and migrant workers can come home with dignity. Since 1996, Unlad has expanded from assisting small trading enterprises such as sari-sari and supply stores to incubating larger enterprises such as food processing, free-range poultry production, and agribusiness production and processing.

Not everyone is born an entrepreneur, and Unlad goes to great lengths to reach out and educate migrants about the risks and rewards of investing. For those who chose to participate, training in savings strategies, business management, and investing is provided.

From left to right: Best Choice's manager, assistant, and Unlad's Executive Director, May-an Villalba, reminisce about Best Choice when it first stared

The idea is to arm returning migrants with the knowledge, skills, and support required to operate a successful business so they can be part of revitalizing the local economy instead of becoming a victim of it.

Successful Unlad projects include Best Choice, a coconut husk processing plant, a biodynamic farm, a rice center, and food processing as well as virgin coconut oil processing enterprises.

Social Entrepreneurship & Human Trafficking
You may be wondering what this has to do with human trafficking (trafficking). Why, if I am conducting a study on trafficking, would I spend my time interviewing an organization that deals not with migrants who have been enslaved, abused, and exploited but instead with those who have finished their overseas contracts and are returning home looking for ways to maximize their earnings?

Trafficking is the product of a number of factors including poverty, poor education, lack of jobs, feminization of migration, organized crime syndicates, government corruption, and low awareness of trafficking at all levels of society. One of the major factors driving migration, and as a result creating a large population that is susceptible to trafficking, is the lack of local job opportunities. Many communities in the Philippines are rife with unemployment, not from lack of demand or motivation but from lack of jobs. The urban centers such as Manila in the north and Davao in the south offer some possibilities, but the demand for jobs far outweighs the supply.

While jobs can be scarce in the Philippines, particularly to those who have not attended a big name university, the global market is hungry for low-skilled, low paying jobs such as domestic and agricultural work that may be viewed as undesirable to those living in the developed world. Globalization has brought countries and economies across the world closer together. A country like the Philippines, who’s economy is based largely on exporting labor, has reacted to this increased connectivity by meeting international demand for these low-skilled jobs.

While this provides opportunities for the unemployed, it also creates a large population of migrants who are vulnerable to trafficking and exploitation at the hands of dishonest recruiters, corrupt government officials, and scheming employers. Further, the nature of jobs like domestic work, where a woman is placed into the home of a family and potentially cut off from the outside world, creates a risky environment for the maid who can be abused by the employer away from the public eye.



Percentage of the Filipino population living below poverty line in 2003, by province. Provinces with darker shades have more people living below the poverty line. Source: Wikipedia

Trafficking is a problem that reflects a variety of issues in a culture and an economy such as a patriarchal society and widespread corruption. This is why a holistic approach to combating trafficking that includes social entrepreneurship is needed. Anything less would be incomplete.

While donations and charity are still needed to address socio-economic issues, social entrepreneurship and the services offered by Unlad are integral in stimulating the local economy and combating trafficking, potentially putting more than 10 billion dollars worth of annual remittances to productive use that could benefit individuals, communities and, if effective on a large enough scale, the country.

Transforming Waste into Profit
Three hours from Best Choice, down dirt rounds, past lines of banana and mango trees and blue-domed mosques with peeling paint, past countless posters promoting local politicians and the projects they have sponsored to drum up support for the coming election in May, past the eyes of countless vigilant cocks confidently strutting and curious half-clothed children, past military check points complete with guards armed with what looked like M-1 Garrands from the second world war, there lies a factory that has taken a formerly useless waste material and converted it into pure profit.

The material in question is coconut, the husks to be exact. Coconuts are harvested for their meat and juice, not for their hard shells, which traditionally are discarded to form heaps of what resemble brownish skulls.



Macabre imagery aside, Davao Oriental Coco Husk Social Enterprise Inc. (Davao Enterprise) is generating serious business. Processing coconut husks into fiber which is used to make anti-erosion nets (for which Unlad won an Ashoka Changemaker Award in 2005), handicrafts, wallpaper, bed fillings and more, Davao Enterprise has found a truly productive use for an abundantly cheap resource that was previously discarded and left to rot.

Launched in 2004, Davao Enterprise was incubated by Unlad and a local development NGO, Kalumonan Development Foundation. It is an example of an enterprise that corresponds to Unlad’s vision of social entrepreneurship: economically sustainable, gender-fair, protects the environment, practices accountability and transparency, and promotes the community’s health and well-being.


Photo by Bernice Roldan

With an onsite staff of 70, an additional 30 home-based artisans, and plans to expand, Davao Enterprise has been able to provide jobs in a community that has few other employment opportunities. Unlad was instrumental in getting Davao Enterprise off the ground and to this day continues to monitor the business and assess opportunities for growth and ways to further streamline the production process and improve efficiency.


Photo by Bernice Roldan

With production nearing 100 tons a month, demand for processed coco fiber is showing no sign of slowing—something that has not gone unnoticed by others. Indeed several other coco-processing factories have sprung up in the past few years, including one started by a local government official, giving Davao Enterprise a run for its money; however, the migrant-supported facility has managed to keep its edge through faster production. China has been one of the main destinations for this processed fiber where it is used to fill mattresses, although a market has emerged for coco fiber handicrafts and anti-erosion nets as well.


100% coco fiber handicrafts


Anti-erosion nets for which Unlad won an Ashoka Changemaker Award in 2005
Photo by Bernice Roldan

The processing plant is a lively place. Women laugh and gossip as they spin thread from the coco fiber. Nearby a dozen men are busy throwing coconuts onto a conveyor belt that moves slowly towards a grinder. Dust fills the air. Shirts cover mouths. Thousands of coconuts sit in patient silence, awaiting their turn. Trucks arrive sporadically with fresh shipments of husks. Processed fiber is packed into bales and stacked on top of one another like giant cubes of shredded wheat cereal.



Inside the factory store, rows of multi-colored handicrafts, from bowls to purses, fans to hats, fill the shelves, each with its unique blend of colors. The texture of the processed fiber is almost rubbery: soft and malleable to the touch yet with enough firmness to hold shape.



May-an, the Executive Director of Unlad, chats with the staff about equipment upgrades and maintenance work. There is discussion about renting an extra machine that will increase production but the plant will be essentially breaking even. This will, however, allow more people to work at the plant. “We should rent the additional machine,” says May-an. After all, this business has two forms of profit: monetary and social. The more staff are employed, the more money flows into the community: supporting families, putting food on the table, supporting education.

This is social capital.

Keeping production constant and increasing processing speed will be integral to staying competitive. There is no shortage of husks. The key is maintaining the machines so they can continue to produce ton after ton of processed fiber.



The processing plant bumps and shakes through the window of my van. The cracking and grinding of husks fade into the distance. It is time to head back. The drive home is spent discussing social entrepreneurship as a tool for social change: everything from blogs to online social networks, biodynamic farms to animal manure, apathy to activism, and dedication, delusion, and romanticism was touched on.


Photo by Bernice Roldan

Two Examples, One Blueprint
I sit in the lounge of my business hotel (free Wi-Fi) in downtown Davao after a day of visiting two Unlad-supported businesses. Sipping a San Mig Light (the Filipino equivalent of Bud Light) and pecking away at my laptop, my head spins from the possibilities and the excitement of seeing such an idealistic concept in the flesh. In many ways social entrepreneurship is idealistic, but this does not mean unrealistic. The concept is based on finding creative ways to address social issues. One interpretation would be running a business whose profit is measured not only in net monetary gain, but also social capital. Other examples of social entrepreneurship include reforming the school curriculum in India to reinforce the cultural identity of minority ethnic groups, working to provide electrical energy to impoverished rural areas in Brazil, or, like Nobel Peace Prize winner Muhammad Yunus, using microfinance as a gateway out of poverty for the poor in Bangladesh and beyond.



For Unlad, social entrepreneurship brings with it the promise of using migrant savings to revitalize the Filipino economy, inject much needed cash to poor communities, and create employment alternatives to the exodus that is labor migration.

Of course, like anything else, there are obstacles. According to the U.S. Small Business Administration, ninety five percent of small businesses in the U.S. fail within the first five years. For Filipino migrants, who return home with their savings, generally to unemployment and with few viable options beyond reapplying to work abroad, sending a son/daughter who is old enough to be a nurse, domestic worker, or seafarer to the Middle East, Europe, Asia, or the United States, or depending on a cousin or uncle who is currently abroad, the need to generate income from savings is critical to a family’s ongoing financial well-being.

Businesses like Best Choice and Davao Enterprise offer only a taste of what can be achieved with savings and support provided by organizations like Unlad, even within an economy that offers few breaks and is often completely closed to the poor.



Social entrepreneurship is not the be-all end-all of the Philippines’ local economic woes, but it is certainly a step in the right direction. While the government and large corporations are strategizing on how to best maximize labor migration and cater to international markets, organizations like Unlad are pushing the concept of social entrepreneurship and encouraging the use of migrant savings in a way that fuels jobs, benefits the local economy, and ultimately helps lift people out of poverty and the financial vulnerability that allows trafficking to prosper.

Back Home
I return to Manila with a different feeling than what I’m used to after conducting four months worth of trafficking-related interviews. Usually I talk to anti-trafficking NGOs that, after describing their generally excellent programs and revealing an inhuman perseverance, lament about the state of the justice system, the state of the government, and the need for additional funding. These are real, serious issues that often put a damper on the work of NGOs in the face of scarce resources and overworked staff. This is not to say anti-trafficking NGOs in the Philippines do not experience successes—the passing of the anti-trafficking law in 2003, the local systems that have been established to identify, rescue, rehabilitate, and reintegrate trafficking victims, and the push towards creating more aware criminal justice and law enforcement agencies—are all tangible signs of progress that can firmly be accredited to NGOs. But hearing about social entrepreneurship and seeing the possibilities in the flesh was refreshing and uplifting.

It is inspiring knowing that through self-empowerment and providing an opportunity, determined Filipino migrant workers, many of whom took the risk of being trafficked by working abroad, are able to return home and build off of their earnings in a way that can, with enough momentum, help rebuild their country and economy one noodle, one fruit preserve, one coco fiber at a time.


Photo by Bernice Roldan

About the Author
Justin Hakuta is a U.S. Fulbright Scholar currently studying non-governmental organizations combating human trafficking in the Philippines. A graduate of Carnegie Mellon University (2004, B.S. in Decision Science), Hakuta has worked as a researcher at the Midtown Community Court in New York City helping formulate policy to reform the criminal justice system and continues to pursue his interest in human rights and social entrepreneurship by collaborating with organizations like Unlad Kabayan.

Related Links
New York Times Magazine- A Good Provider Is One Who Leaves
Carnegie Mellon University News Blog