The Philippine Economy: A House of Cards

The Philippine Economy: A House of Cards

Post by Matthew Newfield. Colgate Class of 2023.

Migration from the Philippines has become extremely commonplace as migration is central to the Philippines’ economy’s well-being. The persistent trend of emigration in the Philippines began when the Philippines government started the overseas employment program. This program was launched in response to the Philippines’ economic instability in the 1970s and sent Phillipino workers to middle eastern countries experiencing labor shortages.

The facilitation of overseas employment had drastic repercussions where ten percent of the Filipino population works overseas, and the Philippines has the third-highest number of recipients of remittances in the world, with remittances totaling up to 26.9 billion United States dollars. With many of the Philippines’ high skilled workers overseas, the Philippines experiences a “brain drain” where Filipino doctors, engineers, and mechanics do not contribute to bettering the Philippines. As well, the remittances received have an enormous impact on the Filipino economy where, “At the macroeconomic level, the surge in remittances has been boosting the Philippine peso, easing the foreign debt burden and taming national inflation.” (Baggio 110).

However, a reliance on remittances is not a viable solution to domestic economic issues as remittances do not significantly impact the domestic economy. Additionally, policies such as the 1934 Tydings-McDuffie Law, where Filipinos became subject to United States migration quotas unless of a labor shortage, reveal that labor migration is not a viable solution to domestic economic issues. Policies such as this demonstrate that overseas labor is not guaranteed and is dependent on necessity, and quotas, similar to the 1934 Tydings-McDuffie Law; limiting migration will, in turn, lower remittances and negatively affect the economy.

Even with resilient economic growth in the Philippines, where gross domestic product rose six percent yearly from 2011 to 2016, the emigration rates remained stable. Emigration has remained steady because, even with economic growth, the Philippines has been unable to alleviate high domestic unemployment rates. The continuation of policies promoting emigration and the inability to alleviate domestic economic issues have made the Philippines economy particularly vulnerable.

The use of labor migration for economic stability has proved to keep the Philippines afloat; however, worsening climate conditions and global economic changes may challenge this tactic’s success. The Philippines is extremely vulnerable to climate change and has experienced an increase in the frequency of natural disasters. With natural disasters occurring more frequently than before, the Philippines will become a more challenging place to live, and there may be a significant increase in emigration rates unrelated to labor migration. The refugees that natural disasters will create may influence countries’ immigration policies on Filipinos, lessening the number of Filipinos allowed to migrate. The Filipino refugees may impact Filipino laborers’ ability to enter foreign economies, as there will be significantly more Filipino immigrants.

Additionally, faced with sustainability, the world is beginning to replace oil consumption with renewable energy. The lowering demand for oil lowers oil prices and will create a surplus of workers in this sector. As many overseas Filipino workers are laborers in oil fields, the lower demand for labor in the oil-producing countries will lessen the number of Filipino workers necessary for oil-producing countries. The decrease in overseas employment opportunities will lower the amount of money in remittances and may negatively impact the Philippines’ economy’s welfare.

Lastly, the COVID-19 pandemic caused a worldwide economic downturn, where unemployment rose, and economic activity decreased. The pandemic not only slowed the global economy but impacted travel itself, causally lowering the number of foreign workers allowed in a country. The coronavirus pandemic may reduce the number of Filipino laborers permitted to migrate for work, consequently impacting the Philippines’ economy’s welfare. Additionally, the pandemic has contracted the global economy and has lowered labor demand as the pandemic has reduced output, which will decrease the amount of overseas Filipino laborers working and sending remittances home.


Asis, M. (2017, November 30). The Philippines: Beyond Labor Migration, Toward Development and (Possibly) Return. Retrieved October 08, 2020, from

Asis, M. M., & Baggio, F. (2008). Moving out, back and up: International migration and development prospects in the Philippines. Quezon City, Philippines: Scalabrini Migration Center.

Maruja M.B. Asis Maruja M.B. Asis. (2019, July 19). The Philippines’ Culture of Migration. Retrieved October 08, 2020, from

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