Wednesday, February 27, 2008

Among OFWs, we need more ‘TNTs’

Migration is a natural phenomenon. As the song goes, birds do it, bees do it, even educated fleas do it.

Practical steps on how to stretch your dollar or dinar

By Pat Sto. Tomas

Chairman, Development Bank of the Philippines

Migration is a natural phenomenon. As the song goes, birds do it, bees do it, even educated fleas do it.

The non-migrant is the oddity. If you do not live where you were born, you are a migrant.

So enough already. Let’s stop the national flagellation and defeatist mantra that we leave the Philippines because there are no opportunities here. The human race and the not-so-human race leave for perceived better opportunities. Why else do you see all those foreign-looking nationals in Ortigas, Makati and my native Mindoro?

But this is not about migration. This is about how migration can be made to work for the OFW himself or herself. This is how that hard-earned dollar (or euro, dinar or dirham) can go a longer way so that it benefits not just the family that is left behind but the one who leaves as well.

Save, Save, Save!

I have a few suggestions.

First, we need to have more TNTs. That is correct. We need more people who can do Tago ng Tago (TNT), hindi Gastos ng Gastos.

If you make $400 a month (that is minimum wage for domestic helpers), open an account for yourself. Deposit at least 25% of your income to that account. Let that be an account which you cannot withdraw from for a specific period of time, usually your contract duration. Ask the bank to put it in a higher yielding account other than savings. If you have a 12-month contract, you would have saved $1,200 or P48,000 for one year.

The assumption is that an OFW leaves only if what he gets abroad is at least double what he makes in Manila. You may send $200 to your family but you may want to impose a number of conditions to that remittance.

Start a business

One is that they may avail themselves of a loan from the Overseas Workers Welfare Administration or OWWA (up to P40,000) that allows them to start up a little business. This can be done even before the OFW leaves and after his contract is processed.

For that amount, one telephone company will give you an Internet Service Package where OFW beneficiaries can derive some income through rental time. The Internet package may also be done in conjunction with cell phone loading operations. This should allow repayment of the loan anytime from 6 months to one year.

I also know of one company that allows small investors to distribute their products such as soft drinks, hot dogs, tocinos and assorted household necessities for a minimum investment of P20,000. This can be sold in your neighborhood.

Keep a book of accounts

The second condition for the regular remittance is to keep a book of accounts for expenses sourced out of remittance. This allows all concerned to monitor costs every month and to be mindful of what is necessary and what isn’t.

The OFW is not a milking cow. Separation should be a reason for undertaking fiscal discipline and engaging in activities that keep the family together. Within the family, there should be a designated treasurer, an auditor who verifies the expenses and renders a report to the chief financial officer—the OFW.

The OWWA organizes family circles for people left behind. Ask them to put you in touch with family circles in your area. The family circle is supposed to facilitate support. They should be able to tell you where to access services for things like counseling for rebelling children or tutoring for those who do not quite make good in their academic studies.

Join family circles

At the same time, family circles are supposed to facilitate bulk-buying of basic necessities like rice, cooking oil, pork, fish, chicken or even school supplies. This should also be a source of savings for families who wish for their remittances to go a longer way.

It is tempting to view having an OFW as an opportunity to splurge. If income from the home-based business exceeds payment for business-related expense, the remaining $100 can be shared between OFW and the family so that there may be room for a little luxury.

I am a penny pincher myself, so what about putting that money towards an education fund for the children or a housing fund for the family. My sense is, after five years of a regime like this, we would have learned not only financial discipline but a better appreciation of the kind of hard work and loneliness that affects an OFW and his/her family. The OFW experience can thus be a self-limiting exercise if everybody cooperates.

After Tago ng Tago, we might be Tuwang Tuwa because all that sacrifice would have made possible better opportunities for the OFW and his /her family.

The author is chair of the Development Bank of the Philippines and former labor secretary.


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