1. Foreign Sector and the National Transfer Accounts (NTA): The Case of the Philippines Researchers/Institution: Rachel H. Racelis and John Michael Ian S. Salas Philippine Institute for Development Studies F ourth Annual National Transfer Account Workshop 2007 January 19-20, Berkeley, California

2. Foreign Sector and NTA: Need to explore the significance and possible implications of overseas Filipino workers (OFWs) remittance in NTA analysis This presentation: Shows preliminary results of analysis of age profiles of “OFWs” remittance and domestic workers’ earnings using 1999 data

3. Context of Philippine Labor Export: The Philippine government promoted the export of labor in the 1970s Short-term solution to unemployment and balance-of-payments problems Unemployment situation in the Philippines not changed substantially over the last 30 years

4. number of “overseas Filipino workers” or OFWs rose substantially

5. OFW remittance as a share of source of labor income is rising

6. Question #1 and Findings: How does the age profile of OFW and their remittance compare with those for local workers and their earnings? -The age distribution of OFW and local wage earners are similar. -Per worker remittance increases with age while per worker earnings of the self-employed by age has the inverted U-shape.

9. Question #2 and Findings: Have OFW remittances significantly influenced or reshaped the age profile of total labor income? -The general flatness of the distribution of total OFW remittance by age has not significantly altered the overall distribution of total local labor income by age. -But the upward shifts in local labor income due to the addition of OFW remittance differed slightly among age groups, with highest at 15% for 25-34

11. Question #3 and Findings: Has the addition of OFW remittance to household resources significantly influenced the overall pattern of lifecycle deficits or surpluses by age? -size of OFW remittance relative to the aggregate surplus varies widely across age groups, about 70 percent in the 25-29 age group and only 10 percent in the 55-64 age group -but it does not significantly alter the overall distribution of surpluses by age

14. OFW-related estimation issues encountered: OFWs are not included in survey household roster Remittance from abroad is reported as a source of household revenue OFW remittance reported in survey is net of OFW consumption  if OFW consumption is to be included in household consumption – how to estimate and what to use for aggregate control  if OFW is incorporated as a household member - what to use as sampling weights

15. Thank you.