After years of working abroad, she came home to finally be with her son. But to her dismay, he was cold, distant and hostile, and would engage her in shouting matches at the slightest provocation. It was a reaction that mystified this overseas Filipino worker (OFW), until she learned of his diminished status among his peers now that his mother no longer earned in dollars.
So went one case study from Caridad T. Sri Tharan’s doctoral dissertation on women OFWs that sought to uncover the real costs of migration to Philippine society.
“Gender, Migration and Social Change: The Return of Filipino Women Migrant Workers,” was based on Tharan’s in-depth interviews with 14 women returnees now based in Metro Manila, Baguio, Tarlac, Davao and other sites. Written for a doctorate in gender studies at the University of Sussex, England, the research delved into the OFW phenomenon beyond the at least P17-B yearly remittances that some 10 million “modern-day heroes” generate for the country’s economy.
Tharan’s dissertation also showed that many of these OFWs who work menial jobs come home after years or decades of working abroad to a pile of debts and zero savings, simply because relatives entrusted with the household money did not know any better. Some, because of limited education, are also hampered by bad money habits.
But, Tharan observed, “These bad money habits need to be understood within the context of OFWs trying to make up for absence or separation from home with a stream of gifts for their family. There is also the pressure of trying to provide not just for one’s immediate family, but the extended family, relatives and even neighbors.”
The “need to feel appreciated and valued back home” probably because they are devalued abroad in their menial jobs is also behind the OFWs’ compulsion to overspend for their loved ones, Tharan added.
It’s a common enough problem that ASKI Global Limited sought to address by giving OFWs and their families the necessary information they need to manage their finances better.
According to Mary Jane Macapagal, training director of ASKI (or Alalay sa Kaunlaran Skills and Knowledge Institute Inc.), the group was established in 2010 to provide financial education and literacy to OFWs and their families so they could develop entrepreneurial skills and gain self sufficiency through the productive and efficient use of remittances.
An ASKI research on OFWs showed that small businesses started from remittances usually end up a failure because of the limited capacity of the OFW’s relatives to manage the business, Macapagal said.
“Member-borrowers of microfinance institutions from this sector sometimes use the remittance to pay for loans, suggesting that the business loan was not generating sufficient revenues to cover the amount borrowed.”
Asked why ASKI has chosen to focus on OFWs, its chief operations officer Irma Cosico noted that “In the Philippines, a family with a member working overseas is considered as non-poor, thus they are not given the opportunity to access microfinance products and services. Banks, on the other hand, see them as too small with no sufficient asset that can be used as collateral.”
In reality, Cosico added, the remittances from this sector can be huge enough such that part of this can be diverted for productive purposes so that over a period of time, families can use this for their needs instead of totally relying on money from abroad.
The monthly remittances are the biggest resource that families can control and dispose of as needed, said the ASKI COO. “Financial literacy teaches them not only the basics of saving, spending, budgeting, planning and investing; it also teaches them how to make informed decisions on their personal finance.”
The ASKI official also quoted a research study funded by Banking with the Poor Network of Singapore and Australia that showed the financial situation of Filipino household workers in these two countries:
• Most Filipino domestic helpers have been in Singapore between 10 to 20 years, or an average of 15 years. Of those interviewed, very few have savings in the Philippines, and these are mostly used by family members for what they consider “emergency consumption” (parties, weddings, fiestas, sickness and/or death in the family).
• Most OFWs cannot open a personal savings account in Singapore because of such requirements as minimum deposit, minimum maintaining balance, etc.
• Few workers have invested in stocks as recommended by friends because these are instruments they are not familiar with. In many cases, they wind up being taken advantage of by some fly-by-night investment companies.
Making matters worse are some harmful money habits that OFWs have that can be detrimental to their financial health.
“I can speak only about Filipino domestic workers in Singapore,” said Cosico. “Before the Financial Literacy Program, the OFWs there admitted to the following lapses:
• Many OFWs remit money to their families without any precondition. They feel it is their obligation to send money. The husband, parents or siblings are often left on their own to decide how to use the money.
• Some OFWs do not remit 100 percent of their salaries to their families, and instead use a huge amount to buy items they have been deprived of: shoes, clothes, bags, food, entertainment (bar hopping, gambling, movies, etc.). Such expenses often create family conflict or tension.
• Other OFWs send money home for big-ticket items like vehicles or expensive appliances, depleting what could have been capital for business and more productive pursuits.
Given such realities, the Metrobank Foundation (MBFI) partnered with ASKI to help OFWs and their families learn how to use their money more efficiently:
In 2011, MBFI teamed up with ASKI Global Ltd. and ASKI Philippines for the Financial Education Program for Overseas Filipino Workers and their Families in the Philippines. A grant of P250,000 allowed ASKI to offer the program to 57 low-income professional and non-professional overseas workers in Singapore and 22 family members in the Philippines. The series of training was held in Nueva Vizcaya, Pangasinan and Quezon City.
Metrobank Foundation president Aniceto Sobrepeña explained the bank’s involvement: “Since we put a high premium on empowerment among others, we trust that funding a parallel Financial Education Program is a stepping stone to a more sustainable life for the OFWs in Singapore and their families here in the Philippines. We were very happy knowing that the training of the 57 low-income professional and non-professional overseas workers benefited by the grant resulted in an increase in savings and the establishment of a number of businesses managed by both the workers and their families. This inspired us to expand our intervention by embarking on a bigger OFW program.
“In the light of Metrobank’s 50th anniversary, we are exclusively partnering with ASKI on a two-pronged Financial Literacy Program for OFWs through an endowment fund that will be a source of micro-loans to provide seed capital for business. A back-to-back training for the overseas workers and their families will be a prerequisite before they can avail themselves of the loan.”
The mechanics of the financial literacy program were simple enough: After attending the group’s financial literacy seminar, the OFWs in Singapore gave ASKI the contact numbers of their families and relatives in the Philippines. Through ASKI Phils., the OFWs’ families and relatives from Regions 1, 2 and 3, were brought together for a similar training.
The topics in the module cover savings and spending, budgeting and investing.
“We advise them to practice this formula: Income minus savings equals expenses,” Macapagal said, adding that the usual mindset is for people to spend first and consider whatever is left as savings.
So far, Metrobank has funded 79 OFW beneficiaries under ASKI Philippines, and there are requests for the group to extend the same service to OFW families beyond Northern and Central Luzon, Macapagal said.
“Family members coming from the Visayas and Mindanao need to wait for the training roll-out,” she said, adding that other family members, whose OFW kin are deployed outside Singapore, have requested for a similar training for OFWs in Hong Kong, Taiwan, Dubai, the US and Italy.
The slow approach seems grounded in reality.
Metrobank Foundation has acknowledged that “programs like these do not have an instantaneous impact on beneficiaries. Changing in attitude and behavior is a long-term process.”
The Foundation added: “While the beneficiaries of the program are mostly non-professional overseas workers, most of them domestic helpers in Singapore who work abroad to meet the needs of their families, (their efforts) are not enough to break the cycle of poverty unless there is a change in their mindset on how to effectively and efficiently manage their income from working abroad. By educating the OFWs and the families, they are empowered to save and look for sustainable income. They may even provide livelihood opportunities to their local communities.”
That’s on the long term. But already, some of the beneficiaries have started feeling the change in their attitude towards money.
Melinda Manglong of Pangasinan credited the training for making her “more frugal.” She has opened a bank account, bought another motorcycle to do business and increased her income, she said.
For Nancy Beltran, making her money grow meant increasing her investments on farm lots and putting up a piggery. “I am now planning to buy farm equipment to make (my business) more productive so I can earn more.”
Katrina Regidor, 26, of Manila has also opened her own savings account and makes sure to record and compute all her expenses and earnings, something she has learned to do only lately.
Already, she added, she has acquired a house and is paying for its amortization.
The ASKI formula for savings is something that Isabel Bolante of Tayug has learned to live by. “After the training, I became more aware of budgeting. Before, when I get remittances, I spend first and save whatever is left. But now, I save first before spending.”
Spending wisely is the biggest lesson she has learned from the financial literacy workshop, said Marites Arzina. “I used to manage my money any which way. Walang direksyon. I buy whatever I want. I had no priorities. But the training made me realize how important it is to plan your expenses and discipline your spending habits.” •
10 Most Harmful Money Myths Among OFWs and their Families:
1. Financial security lies with having a good-paying job with a good company
2. My family or relatives will take care of me.
3. You must have money to make more money.
4. Failure is bad.
5. All debts are bad.
6. Money is the root of all evil.
7. I don’t have what it takes to be rich.
8. Money is scarce.
9. The rich are defined by their income.
10. Someone who saves money for the future does not trust God.
Money Matters
Topics included in the ASKI-MBFI Financial literacy seminars
Common reasons for financial failure
1. Procrastination (A lot of people postpone an investment and savings plan until it is too late.)
2. Lack of discipline
3. Inadequate protection against unexpected events
4. Excessive borrowing
5. Lack of knowledge
6. No planning
Essential personal financial skills
1. Planning
2. Budgeting
3. Savings and investments
4. Credit management
5. Smart shopping
6. How to educate yourself