Victoria Celzo
Two Opposing Views on the Hong Kong Experience
Thesis Statement
The Philippine government sided with the Hong Kong government in its proposal of cutting the wages of foreign domestic helpers in Hong Kong.
I.
The Hong Kong Government, through the Hong Kong Employers of Overseas Domestic Helpers Association and certain members of the Bureau and Legislation Council or Legco, proposed a wage cut for its foreign domestic helpers.II.
The Arroyo government initially accepted and supported the wage cut proposal on the condition that the number of employed Filipino domestics there will not be affected.A.
From the point of view of the Arroyo government, the wage cut proposal should be viewed on a macroeconomic level.1.
The wage cut proposal is better than a complete job loss for Filipino domestic workers in Hong Kong.2.
The wage cut proposal still assures maintenance of foreign remittancesa.
total OCW remittances -- land-based and sea-basedb.
OCW remittances share of GNPc.
OCW remittances as a proportion of export earningsd.
OCW remittances in GNP versus FDI in GNPe.
Remittances for deployed OCW and GNP per capitaf.
Debt paymentB.
From the point of view of OCW-NGOs, particularly Migrante International, this response of the Arroyo government can be attributed to two things.1.
The Philippine government has a mendicant economy.2.
The Philippine government exploits Filipino migrant workersIII.
The Hong Kong government freezes the wage cut proposal.A.
From the point of view of the Philippine government, the diplomatic initiatives they have carried out primarily caused the Hong Kong government to freeze the wage cut proposal.1.
Labor Secretary Patricia Sto.Tomas went to Hong Kong to appeal to the Hong Kong government not to cut the wages and hand carried a letter from President Arroyo expressing the same view.2.
A Lower House delegation was sent to Hong Kong to discuss the issue.B.
From the point if view of Migrante International, the freezing of the wage cut proposal is mainly due to their effort and that of other OCW-NGOs.1.
Protest rallies were held in Hong Kong2.
Protest rallies and lobbying were also done in the PhilippinesIV.
Conclusion and Recommendation
Summary
The Hongkong government ‘s proposed wage cut is considered by the Arroyo government as a good proposal. The President accepted and supported the said proposal with the condition that the jobs of the Filipino migrant workers in Hongkong will not be affected. This was seriously opposed by the Filipino migrant workers in Hongkong, particularly Migrrante International. They accused the President non-supportive of their interests and welfare. Migrante International attributes this kind of response of President Arroyo to the mendicant economy our government maintains. According to this international alliance of the migrant workers, the Philippine government does not want to antagonize the plans of the Hongkong government for fear of a substandard foreign relations with Hongkong which may eventually lead to job loss for Filipino domestics there and a possible decrease in foreign remittances. Thus, it implies that the Arroyo government is wiling to sacrifice the lives and welfare of the migrant workers, not only in Hongkong but in other countries as well, as long as the foreign remittances they send to our country will not be impinged on.
The Philippine government, on the other hand, gave a positive outlook to this proposed wage cut. It takes into consideration the multiple economic benefits from the human capital outflow which is considered the important aspect of Philippine labor migration. Two of the most significant contributions of labor migration are employment and remittances.
It can be inferred from the Philippines’ past labor unemployment and migration patterns that the county needs to be persistent with its policy of encouraging temporary overseas contract work as supplementary means to achieving full domestic employment.
Aside from unemployment alleviation, the government has acknowledged that the millions of dollars that OCWs sent through the Philippine commercial banking system and monitored by the Philippine Central Bank earn the necessary foreign exchange to balance the nation’s financial accounts. The foreign exchange from their remittances has directly assisted in the Philippines’ twin deficits, budget and trade, and indirectly facilitated in the country’s external debt payments. Moreover, Filipinos who go overseas, whether land-based or sea-based, have a high international wage differential compared to the local context – often more than double in certain occupations.
The foreign exchange remittances of OCWs is one of the major contributors to Philippine debt repayments and consequently in controlling the country’s huge debt from reaching critical levels. The Philippine labor would therefore opt to have a decrease in the wages of its migrant workers in Hongkong rather than totally decrease its foreign exchange remittances due to job loss.
Important points to consider:
§
The twin proposals of the Hong Kong government, wage cut and abolition of the live-out arrangements of foreign domestic helpers, have received countless questions and responses. The wage cut proposal in particular, has become a battle for Filipino migrant workers who comprise the largest group of migrant workers in the former British colony. For this reason, they possess the right to probe certain plan, scheme and proposals concerning them. Through this wage cut proposal two opposing views on labor migration have come to materialize – the economic dimension presented by the Philippine government and the social dimension presented by the migrant workers and OCW-NGOs, particularly Migrante International.§
The Philippine government, as a political actor and machinery in the economy, will generally take the proposal in a macroeconomics level. As an important means for the government of low-growth countries like the Philippines to finance their development, the Philippines’ export of labor as well as its labor migration policy should be given economic imperative by the government. It was reported that the Arroyo government supported and accepted Hong Kong’s wage cut proposal including the abolition of live-out arrangements. This support however can only be made possible on the condition that the number of employed Filipino migrant workers in Hong Kong will not be affected. In other words, the President agrees to cut the wages of foreign domestic workers provided that Filipino domestic helpers working there will be retained and that they will still be able to send remittances back home.§
What the Arroyo government takes into consideration in its initial approval of the wage cut proposal are the economic benefits of labor migration. In most of the labor-sending countries in the world like the Philippines, the most important contribution of labor migration aside from the employment is through remittances. The government has acknowledged that the millions of dollars that OCWs sent through the Philippine commercial banking system and monitored by the Philippine Central Bank earn the necessary foreign exchange to balance the nation’s financial accounts. The foreign exchange from their remittances has directly assisted in the Philippines’ twin deficits, budget and trade, and indirectly facilitated in the country’s external debt payments. Moreover, Filipinos who go overseas, whether land-based or sea-based, have a high international wage differential compared to the local context – often more than double in certain occupations (Medina 1995).§
The remittances contributed by Filipino migrant workers can be classified into the following: 1) the total OCW remittances, land-based and sea-based from which Hong Kong has become one of the top ten sources; 2) OCW remittances share of GNP which helped stabilize the government’s national accounts through the facility of small-business start-ups, consumer spending, and small-scale construction; 3) OCW remittances as a proportion of export earnings wherein OCW remittances were included into GNP as a part of goods and services exports, and have became a major component of the country’s total export earnings and in reducing the gap between exports and imports; 4) OCW remittances in GNP versus FDI in GNP wherein the GNP by remittances is usually larger and more substantive than the total foreign domestic investment (FDI) for a same time span; 5) Remittances per deployed OCW and GNP per capita which can be attributed to the government’s policy of mandating most OCWs to send back approximately 50-80% of their basic salaries to pre-designated beneficiaries in the Philippines and; 6) as Debt payments responsible in consequently controlling the country’s huge debt from reaching critical levels (Medina 1995).§
Because the remittances are used not just to support the needs of the immediate family of a domestic worker but also to meet the needs of a wider network of kin, there is a pressure for a domestic worker to send money home. Thus, any migrant worker facing a wage cut proposal will resort to any effort to oppose such suggestion.§
There is more to labor migration then the remittances our country may acquire. The psycho-social dysfunctions of labor migration – ill-treatment, physical assault, sexual abuse, emotional depression, family breakdown and the likes – are becoming alarming as more and more Filipinos join the overseas employment market. These problems associated with labor migration seem to imply that "the social costs are not worth it". This is what the migrant workers and OCW-NGOs, not only in Hong Kong but all over the world, are incessantly fighting for.§
On January 31, 2002, the Education and Manpower Bureau had announced that it would not implement a wage cut on that year on foreign domestic helpers but the decision about whether or not the live-out arrangements will be abolished has yet to be decided. With this announcement comes the issue on what really causes the freezing of the wage cut – the lobbying of the migrant workers or the diplomatic initiatives of the Philippine government. While collective efforts of migrant workers both in Hong Kong and in the Philippines (through their various protests and lobbying) were visible in opposition to the proposed wage cut, the Philippine government for its part had also made diplomatic efforts to appeal to the Hong Kong government regarding the wage cut proposal. However, many employers of foreign domestic helpers in Hong Kong are spreading rumors that President Arroyo, during her visit in Hong Kong last October has already agreed to the twin proposals of the Hong Kong government as long as the job market for Filipino contract workers in Hong Kong remains unaffected. Whether or not these rumors are true, the reasons why the government will opt to agree with and consider the wage cut proposal of the Hong Kong government are seen from a macroeconomic level.
Conclusion
The Philippine government at first supported the Hong Kong government in its wage cut proposal for the reason that the Arroyo government views such proposal as a good one in terms of employment and remittances assurance. However, the lobbying of Migrante International and other OCW-NGOs, both in Hong Kong and the Philippines, prompted the Arroyo government to alter its position on the issue. It can be inferred that the OCW-NGOs as interest groups had a great influence on the Philippine foreign policy based on the decision of the Hong Kong government to freeze the wage cut of its foreign domestic helpers.