By Danica M. Uy

Philippines ranks 9th in global migrants with 5 million abroad

Posted on December 05, 2016

THE PHILIPPINES ranks 9th worldwide in terms of global migrants from the country, according to a report by McKinsey Global Institute (MGI).

The newly launched MGI report shows that about half or 119.5 of the world’s 247 million migrants have moved from developing to developed countries while a third or 79.6 million moved from a developing country to another.

The Philippines accounts for an estimated 5 million or about 2.025% of the 247 million total migrants as of 2015.

The top ten countries of origin are India, Mexico, Russia, China, Bangladesh, Syria, Ukraine, Pakistan, the Philippines, and Afghanistan.

“At the country level, the top ten nations have accounted for 60% of the growth in total migrants in developed countries since 2000,” the business and economics research arm of McKinsey & Company said.

The top 10 migrant destinations were the United States, Germany, Russia, Saudi Arabia, United Kingdom, United Arab Emirates, Canada, France, Australia and Spain with the US taking the bulk of immigrants at 19% or 47 million people.

A survey conducted by the Philippine Statistics Authority showed that one in every four overseas Filipino workers (OFWs) or 24.7% of the 2.4 million OFWs in April to September 2015 worked in Saudi Arabia, the top destination of OFWs.

Other popular Asian destinations of OFWs were the United Arab Emirates (15.5 %), Hong Kong (5.9%), Kuwait (5.8 %), Singapore (5.7%) and Qatar (5.5 %).

“MGI estimates that in 2015 the world’s 247 million cross-border migrants made an absolute contribution to global output of roughly $6.7 trillion. They contributed 9.4 percent of global GDP (gross domestic product), despite making up just 3.4 percent of the world’s population,” the report said.

Only 25 countries capture 90% of the economic benefit with the US seeing $2 trillion injected into its GDP in 2015, followed by Germany ($550 billion), the United Kingdom ($390 billion), Australia (330 billion) and Canada ($320 billion).

“Migrants originating from developing nations accounted for some $4.1 trillion (or roughly 60%) of the overall global impact of migration, and those from developed origins contributed some $2.2 trillion. The top five pairs of origin and destination countries, as measured by economic impact, together account for some $800 billion of GDP impact, or 12 percent of total global output. The United States is the destination country in three of these corridors, realizing the largest gains from workers who arrive from Mexico, India, and the Philippines,” the report also said.

However, destination countries are not the sole gainers in human capital.

“Many migrants go abroad to find higher paying work with the explicit intention of supporting the families they leave behind -- and these financial flows are often significant,” the report said.

MGI cited the Philippines as an example with OFWs flying abroad to work and remitting $28 billion to the country’s GDP in 2014.

“Remittances are a rapidly growing cross-border capital flow, totaling $580 billion in 2014 (roughly 8.7% of the output generated by migrants). In 2014, the largest inflows went to India ($70 billion), China ($62 billion), and the Philippines ($28 billion).”

However, MGI said that some developing countries would have benefitted more had their people stayed.

“While developing countries receive $370 billion in remittances from migrants in developed nations, this sum is roughly 50 percent lower than what migrants from these developing countries would have generated if they had not moved,” the report read.

BSP data showed that personal remittances from OFWs reached a total of P28.308 billion in 2015, growing by 4.4% compared to the $27.273 billion remitted in 2014. Cash remittances for 2015 hit $25.607 billion, 4.6% higher than the $24.628 billion cash remitted in 2014.

As of September 2016, preliminary BSP data showed that $22.108 billion had been sent to the Philippines by the overseas workers, 4.7% higher than the $19.482 billion sent home in August. Cash remittances hit $20.025 billion as of September, higher by 4.8% than the $17.642 billion recorded in August.

“Today immigrants tend to earn 20 to 30 percent less than native-born workers,” said MGI, which projected an additional $800 to $1 trillion boost worldwide if countries narrowed the wage gap to 5-10%.

According to MGI, one of the problems faced by developing nations with regards to human capital was brain drain, with poor regions like sub-Saharan Africa and developing Asia losing a third to a half of their college graduates, especially professionals, a trend that could cause major gaps.

Approximately 52% of migrants from the Philippines going to OECD (Organisation for Economic Co-operation and Development) countries have attained tertiary education “more than double the 23% of the Filipino population overall.”

Besides the brain drain, MGI also said that wages of low-skilled workers could fall between 0-7% due to emigration.

“However, while emigration has its costs for some origin countries, it also creates some longer-term benefits” such as better job matches, better incentives to invest in education and social remittances, trade and investment flows.

Social remittances meant the skills, experiences, networks and knowledge brought back into the country when emigrants return.

“The Philippines, for example, is a big exporter of nurses. The emigration opportunities associated with nursing have stimulated the development of a sophisticated system of high-quality private education that helps to educate low-income women and open a career path for them. Large numbers of nurses stay after their education, and today the Philippines has more trained nurses per capita at home than wealthier countries such as Thailand, Malaysia, and Great Britain,” said MGI.