Effect of Arab Revolt on OFW Remittances

What will be the effect of the Arab Revolt on the remittances of OFWs? Well, in short – VERY LITTLE. And here are a number of reasons why:

Small OF Populations. The revolts have so far been in countries with relatively small OF populations. Tunisia, Libya, Egypt, Yemen and now Syria have few OFs. There were more OFs in Bahrain and Oman, but in Oman’s case the problem seems to have been short-lived. The Bahrain problems have not caused an exodus of OFs. If big protests take place in Saudi Arabia (which has at least 800,000 OFs) it will be only then when we should worry about OF remittances.

OFs Don’t Flee. OFs don’t immediately flee when there is conflict. No Filipinos have left Yemen since their troubles started. In Libya, the majority seem to have decided to stay on, despite the civil war. And when they do flee, they try to get another job in the region. I remember when Kuwait was invaded (in 1990); many of the Pinay domestics there evacuated with their employers to Europe, and they found other jobs there.  OFs don’t want their deployment fees to go to waste; and many also don’t want to abandon their jobs, since this may result in their being blacklisted (or so they fear).

War Premium. OFs who stay on in the middle of conflict may even earn more because of war premiums. During the Iran-Iraq war of (1980-88) many Filipino seamen collected 4 times their regular pay when their ships entered the war zone. Of course, many also died during this war, because many ships were torpedoed, but that’s something else. It seems that nurses in Libya are now earning 3 times their normal pay because of the war.

Post-revolution Boom. After the revolution – whether or not the revolution wins – economic development seems to favor the hiring of more OFs. If the tourism industry is stimulated, this would mean more Hotel/Restaurant workers would be needed – and this almost certainly would include Filipinos. If health care services would be expanded, this would mean employment for Filipino nurses. If a construction boom ensues, they would need Filipino construction workers.

Locals Work for Government. In the Gulf, local workers aspire to work for the government; leaving the bulk of private sector jobs to migrants of all kinds. A lot of these migrants come from non-Gulf countries like Egypt, Jordan or Lebanon; but they also include workers from places like the Philippines. Filipinos will always find work in the private sector there, since we are known to be good workers. Some companies even advertise the fact that they have Filipino workers – putting up signs saying that “We have Filipino workers”. Filipinos are the last to be laid off, and the first to get hired. Our place is assured.

Can “Bangkok” Also Happen in Manila?

With the Thai army dispersing the “red-shirts” from their positions in Bangkok, some people ask whether or not Manila is also ripe for a Bangkok-like class struggle. After all, they say, there is also a big gap between rich and poor in the Philippines. And Thailand and the Philippines are sort of comparable in terms of size, stage of development, etc.

Safety Valves
Well, I don’t think so. The main reason for saying so, is that the Philippines has various “safety valves” that the Thais do not have. In the first place, come the OFWs. People who are not able to find jobs in the country have the option of going abroad. Filipinos are very much able to go abroad to work, compared to the Thai (who don’t speak English, and thus aren’t able to work abroad en masse). Thus, we can say that the option of working abroad is one of the safety valves in Philippine society.

The second safety valve, ironically, is our home-grown communist insurgency. Why would that be?  People who are particularly mad about the present system have the option of joining the NPA in the countryside. Despite various efforts, the NPA remains restricted to countryside operations, where they face local challenges e.g. armed right-wing groups etc. The NPA does not retain that much left-over energy to fight in the cities. And the CPP-NPA is actually already coopted into the political status-quo and will not do anything to really threaten it.(see: CPP-NPA Helps Maintain Status Quo in the Philippines)

Elections
And then comes elections, which are particularly popular for Filipinos. Our elections “work”, in the sense it brings about a relatively peaceful transfer of power (though still within the ruling elite). Despite everything, elections are part of a system of patronage, even of (temporary) dissent, and it does let off so much of the pressure in the system.  The circus atmosphere of elections also distract people from their pressing problems.

And the people still believe in elections. They still think that change is possible through the electoral process. If only good leaders get chosen, the country will improve. They believe a lot more in elections than revolution or other extra-constitutional means to change things. Military coups don’t really make it in the Philippines – the only successful coup (if you could even call it that) was the 1986 “People Power” revolution.

It is only when the result of elections are not respected, that Filipinos opt for more violent means. This happened in 1986, when Marcos attempted to thwart the election result in his favor. And, sad to say, again in 2001 when a middle class “People Power” revolt overthrew Erap Estrada; effectively negating his landslide victory in elections. This gave rise to”EDSA 3″ where many poor people demanded the return of Estrada to power, and ended up in rioting that reached Malacanang. We can compare EDSA 3 to “Bangkok”, because it was a revolt of the poorest segments of the population; however, EDSA 3 failed miserably, and one factor in this was the lack of leaders.

Can EDSA 3 Happen Again?
Perhaps. But it will not be successful, especially because many of the people who could be their leaders are now involved in elections, or in NGOs, in the countryside (as NPAs) or abroad. The main mass of people tend more to the pro-election, gradual reform of society – revolution or urban uprising are just not attractive.  There is no way that they will be able to sustain an uprising in the city for weeks, even months.

The Future of BPO in the Philippines

The BPO (Business Process Outsourcing) industry in the Philippines is going to quadruple in size in the next 5 years. Thus, it will grow from employing about 500 thousand people now, to about 2 million in 2015. This is not only be an expansion in terms of size, but it will also come with significant changes.
Here are some of them.

Careers, Higher Salaries
When the BPO industry grows to two million, it will have to outgrow the current model of young people doing this for a few years and then moving on. When the industry will be 2-million employees strong, it will be too big to afford the present level of turnover.  This means that the industry will have to find better ways to retain personnel, to make them want to stay on longer and make their work in the BPO industry their careers.

For one, this means that salaries need to rise somewhat. From about PhP 12 thousand entry-level now, to about PhP 20 thousand entry-level in 2015. And that staying on will result in  increased pay with experience. This increase will not price out Philippine BPO, since it will be then about 4 times cheaper than their US counterparts.

A BPO agent receiving a  PhP 10 thousand salary would easily be enticed by a salary of $1000 abroad. However, at a salary of PhP 20 thousand, they would not consider leaving unless they receive an offer of $2000 or above. BPO jobs will have to compete with the Overseas job market for qualified workers, and this is another reason why its salaries will have to go up.

And there needs to be certain amenities for BPO workers, especially for those working the night shift: shuttle buses, 24-hour fast food eateries, 24-hour groceries etc. , gyms, etc. And then, there need to be pension plans in place, which are preferably industry-wide plans.  I foresee that BPO centers will then tend to cluster in the same areas, so that the attached services are located together also.

English Proficiency
There needs to be a thoroughly new way in which English proficiency is taught to call center agents. While a lot of the training will probably remain at the company level, the education especially in English, needs to improve significantly. English proficiency for admission as call-center agents may then be done by special courses offered in the various universities.

All this would mean that the demand for good English teachers will increase. English teachers will then be in short supply, and they need to do a lot more teaching, and thus the salaries for English teachers will have to be increased.

Other BPO
As the call-center type of BPO expands, other types of BPO will also logically be brought in. For example, if a BPO center does the accepting of orders for a certain product, then it may be logical to also base that company’s product distribution for Asia or Southeast Asia in the Philippines. And then, logically, also the accounting functions associated with this.  This could be done by BPO companies or by the mother company setting up a Philippine office.

Then consider medical transcriptions. It may be logical to also outsource the analysis of Xrays and Echos to the Philippines.

Qualitative Changes in Economy
The BPO industry, if it succeeds in quadrupling in size by 2015, would also have led to the transformation of the Philippine economy as a whole. While todays 400 thousand workers seem to be able to do there thing without too much effect on the overall economy; 2 million workers will have a more pronounced effect.

For one, 2015 may see a new trend of lower OFW deployments. With BPO work getting more attractive, more Filipinos will opt to stay in the country. OFWs will have to be either more qualified than the BPO workers (and thus earn more than $2000) or less qualified than BPO workers (and earn less than $1000). The layer in-between will be a battle-ground between BPO and OFW.

The extension of high-speed fiber-optic lines all over the country (which is necessary if BPO companies are to spread to more cities) would cause the rapid improvement in internet connectivity throughout the Philippines. Internet access will be faster and cheaper, and a lot of people (even in the more remote towns) will have access to the Internet. And this will have a profound effect on business throughout the country.

The mere volume of the BPO industry will have effects on labor laws, zoning rules, and laws governing ICT.  Transportation networks will have to consider people travelling at the middle of the night. Or, if brownouts are still a problem – there may be “brownout-free” zones established where BPO firms are located.