The Mobile Filipino: Glorified Victims of the Crisis of Capitalism


The Mobile Filipino: Glorified Victims of the Crisis of Capitalism

By: Marlon Cornelio and Rafaela David, Akbayan Youth – Philippines.

Parts of this paper were presented during the Workers Youth Festival, 9-12 May, Dortmund Germany. First published in the Newsletter of the International Union of Socialist Youth (IUSY). 

The future doesn’t look bright in the Philippines. That is, at least for some 60 % of Filipino youth, from rural and urban, ages 15-30, who desire to work abroad because of higher pay according to the 2010 Youth Study of the National Youth Commission. This is despite the knowledge that working abroad is not healthy for family stability, according to more than 70% of those surveyed. About 85% of those surveyed recognize limited opportunities to earn a living in the country.

While noble with intentions to support their families by working abroad, young people, — future scientists,engineers, teachers, medical practitioners, etc. — comprising a third of the Philippine population, are leaving their country for “greener” pastures. Already, about 10% of the 100 Million Filipinos are working abroad, known as overseas Filipinoworkers (OFWs). They are ‘honored’ by the government as the ‘new heroes’ for sending back remittances amounting to more than US$ 20 B a year, 4th largest in the world next to China, India and Mexico, and keeping the economy afloat despite the global economic crises.

Additionally, there are about a million young Filipinos, physically in the country but working for businesses abroad, working in call centers or business process outsourcing (BPOs), one ofthe fastest growing industries in the country for the past years. In 2012, the BPO sector generated revenues of more than US$ 13 B. The industry has grown an average of 20-25% from 2009 to 2012, and is projected to grow more in the coming years.

The global outsourcing industry is one of the few industries that thrived despite the economic crises in the past years. In 2009, the global revenues increased from US$ 106 B (2008) to US$110, employing a total of close to 4 million professionals. By 2016, the industry forecasts revenue of US$ 300B with almost eight million employed. In the Philippines, US$ 25 B, about a tenth of the world revenue, is projected for 2016, with a direct workforce of 1.3 million, accounting for nine percent of GDP.

The numbers for both industries look promising. Philippine economic managers have only praises for the workers in these two industries for the 6.8 % growth in the GDP in 2012 despite the global economic crises.

But is this internationally-dependent, service industry-backed growth sustainable? What is this growth if not a symptom of capital crossing borders to increase profit by exploiting cheap labor?

Indeed, this growth based on mobile labor brings to the fore three important issues that need to be looked at: (1) the ever-adapting nature of neoliberal capitalism, (2) unsustainableand inequitable growth in the Philippine economy and (3) the high cost of labor trading on workers’ rights.

Why the Philippines? — Capital Exploring Greener Pastures

Alongside the mobility of labor is the mobility of capital. Capitalism, always in a state of crisis and expansion, has found its way yet again across borders, this time around, across the Philippine border and other developing countries, for the cheapest labor.

Dubbed as one of the “Tiger Cub Economies” of Asia, the Philippines, like other developing countries, has proven an attractive market where cheap labor can be bought to stabilize the capitalist crisis that had been growing in the shores of developed countries. On the one hand, labor migration or the OFW phenomenon has proven to make capital more profitable, with Filipinos themselves becoming cheap commodities for sale, pushing the service sector in countries abroad at highly profitable rates. It has also provided a way out for businesses not to heed to the demands of more organized labor movements in developed countries.  It is not uncommon for migrant workers to be pitted against local workers.

The whole business of labor export has also led to the investment of capital to institutions that profit from the trade of labor. These include both legal and illegal recruiting agencies, big corporate service providers and even government agencies. Employers in receiving countries are of course more than willing to accommodate OFWs for the sake of skilled workers at cheaper labor costs.

More recently, we also see outsourcing as another form of capital adaptation. Investments poured in the Philippines as the country has become a location of choice for companies outsourcing operational processes, voice and non-voice, such as human resources,information technology support, medical transcription, engineering services,animation, game development and finance and accounting. According to the Business Processing Association of the Philippines (BPAP), the Philippines has the largest number of voice-BPO employees in the world and has established itself as a mature tier-1 destination globally.

In its reports, BPAP attributes the attractiveness of the Philippines as an outsourcing destination to a number of factors including strong English-speaking capabilities, low infrastructure and labor costs, large base of fresh graduates and talent availability, as well as strong government support.

Demand for the Philippine labor force, therefore, increases with high supply of cheap yet skilled workers — a  more than good deal for most investors.

Growth for Growth’s Sake

The Philippine government, hence on its part, has been more than willing to oblige foreign investors, promoting both officially and unofficially labor mobility both outside (in the form of OFWs) and inside (in the form of BPOs), citing labor as one of the country’s richest resource, lauded further by the government for keeping the Philippine economy growing in the midst of the global economic meltdown.

The optimism on our economy basedon the 6.8% growth in GDP in 2012 however is misleading.

Looking at the Philippine economy closely, it is evident that the service sector contributed mostly to the growth. This proves problematic as even the Asian Development Bank (ADB) in its recent report stated that unless government supports policies that promote a more robust manufacturing sector, the Philippines has a long way to go to achieve inclusive growth.

The report further stated that the Philippines’ reliance on BPO industry and remittances-driven private consumption do not provide higher paying jobs needed to reduce poverty. This is more importantly critical as even if job creation has increased due to BPOs and OFWs, total labor force participation has not increased. Moreover, the pool of skilled workers are forced to take low-productivity jobs both here and abroad, while there is an increase in the underutilization of moderately skilled workers.

Labor trade and the economic growth subsequently prove both unsustainable and inequitable. Growth herein does not translate to local development and poverty alleviation. It is no surprise then when the growth in the aggregate wealth of our 40 richest families in 2011 has shown to be equivalent (in value) to 76.5 percent of the growth in our total GDP at the time.

The Price of Growth – The High Cost of Labor Trading On Workers’ Rights

The creation of jobs here and abroad has been hailed as among the most important indicators of growth in the local economy. But what kinds of jobs are generated in this labor export business?

There are inspiring stories ofFilipinos being lucky and accomplished in their work abroad. However,generally, OFWs are vulnerable to a number of risks when they go out of the country. The risks begin in the Philippines where local recruiters, acting as placement agencies, get high commissions from aspiring applicants. Once deployed, they are forced to take low-paying contracts that do not reflect earlier agreements with the local recruiters. Many OFWs working in the domestic sector further find themselves in repressive situations, where the pay is lowand the working hours long. Mostly women, they are expected to work 18-20 hours a day and fulfill the sexual needs of their employers. Those in better paying jobs in more developed countries are more fortunate. Nonetheless, they become subject to discriminate office policies and lower salary grades.

This is not to mention the effects of labor migration to both the OFW’s social well-being and to his/her family left in the Philippines. With social adjustments in the new country, integration is not always a pleasant experience, with support systems not readily accessible, especially to those who were recruited illegally. Moreover, the alienation of the worker from his/her family and the dependence bred on remittance becomes a source of conflict in OFW families.

BPO industries on the other hand show another scenario. The entry rate in the industry is between PHP16, 000 and PHP18, 000 which is 50% more than the minimum wage rage in Metro Manila pegged at PHP 389-426 a day. This relatively higher salary however comes with greater cost attributed to odd working hours,irate clients, tedious workloads and heavy performance demands. The Department of Labor and Employment (DOLE) and the International Labor Office (ILO) found the BPO workers have issues on stress, poor diet, physical inactivity, tobacco and alcohol use, HIV and IDS, tuberculosis and violence.

Furthermore, health complaints concerning eyes, cough, voice disorders and insomnia are common among call center agents. The prevalence of these health problems have been noted significantly higher compared to other night shift workers. BPO night-shift workers are also more predisposed to safety issues, particularly petty crimes. Attrition rate is also significantly high in BPO industries at 9-10% at the average. With these working conditions, one out of three would resign at the end of the year or four times as high as the national average on turnover rate. With these considerations, career development and job security are huge challenges.

Towards a Global Network of Workers

Despite such job insecurities,labor migration, real and virtual, is a growing industry in the Philippines. Working abroad or in BPOs has increasingly become the option for young Filipinos and the government lays policies and invests on infrastructures that promote such kind of market behavior. Similar patterns can be observed and should be expected in other developing countries.

The challenge now of the Filipino progressives and their counterparts is three-pronged: one, the immediate task to consolidate the formidable force of the growing number of migrant (OFW and BPO) workers; two, the necessity to develop cooperations with workers in developing and developed countries, in both countries sending and receiving migrant workers; and, three, the large scale work of directing longterm policy from growth to sustainable and equitable development, while providing security and safety nets for the workers and their families.

The first two tasks prove daunting enough. But the growing labor market that transcends national borders provides progressives with a promising international network of skilled cadres. Workers from developing countries should be empowered to collectively bargain and not to take part in the bidding for the cheapest labor. Decent jobs should be a universal standard applied in and demanded by workers in developed and developing countries. If perhaps progressive movements can once again consolidate their ranks, the third task of directing government policies will necessarily follow.