Ever since former Philippine dictator Ferdinand Marcos gave the green light to exportation of housemaids to other countries, the money the migrant workers send back home has remained an important source of national income for the Philippines.
However, for decades, almost every Philippine leader had to face a dilemma. While they didn’t want the nation to forever rely on the export of cheap labor to drive the economy, they also felt it was a risky proposition to seek substantially higher wages for the workers.
That is because of fears that raising the average wage of the workers could render them uncompetitive in the labor market.
Now, the current president, Rodrigo Duterte, appears to have found a solution: the China market.
Ever since he took office, Duterte has been working aggressively to mend fences with Beijing and seek closer bilateral relations.
But of course, there is no such thing as “unconditional love” in world politics, including Duterte’s intense eagerness and untiring effort to befriend China.
As everybody can tell, the only reason why Duterte is eagerly going to such great lengths to please Beijing is that he is craving the vast China market.
Being a pragmatic politician, Duterte is perfectly aware that China is well placed to help his country achieve economic transformation, through various means including funding massive infrastructure projects and opening China’s market to the Philippines.
Suffice it to say that Duterte understands very well that if the Philippines is to fundamentally transform its economy, it will need a strong and sustainable growth engine, and that growth engine can’t be anything else other than the China market.
It is against such a background that Silvestre Bello III, secretary for labor of the Philippines, indicated in April that Manila and Beijing had concluded an agreement over importing Filipino labor.
Under the agreement, the Chinese government would import 300,000 Filipino workers per year to work not only as housemaids, but also take up positions such as English teachers, caregivers and cooks.
According to Bello, China has also promised that the average monthly salary for a Filipino English teacher or private family tutor would be US$1,500 (approximately HK$11,700).
Even though the two governments are yet to officially confirm the agreement, if it does materialize as Bello has claimed, the economic implications for both the Philippines and China will be ground-breaking.
Many Filipino housemaids working overseas are highly educated (e.g. university degree holders) and are fluent not only in English but also in other languages such as Spanish and Cantonese, in quite a few cases. Yet they are often severely underpaid.
For example, in Hong Kong, the average Filipino domestic worker only makes one-third of what a fresh local university graduate earns per month.
If China really imports Philippine talents in massive numbers and paying them decent salaries that are commensurate with their abilities and qualifications, it will substantially boost the average income level of the Filipinos, thereby allowing the Philippines to quickly rise to the ranks of middle-income countries.
As far as Chinese middle-class families are concerned, they can also benefit from the importation of highly educated Filipino foreign workers.
It is because hiring a Filipino English tutor for their kids would be much cheaper than hiring a westerner.
The massive importation of highly educated Filipino workers into China could also facilitate a cultural paradigm shift. In time, Philippine migrant workers are likely to become more high-end and higher-value added than their Indonesian and Thai counterparts.
If the Philippines begins exporting highly-educated talent instead of cheap and low-skilled labor, it may gradually set the country on a course toward becoming a nation of decent living standard.
Meanwhile, for middle-income families in Hong Kong in which both parents are working, it could be their worst nightmare if China is really going to pay English-speaking Filipino workers US$1,500 a month, because that will definitely trigger a mass exodus of Philippine housemaids from the city.
If they want to retain their Filipino housemaids, the families will have to pay them over HK$10,000 per month.
For families which can’t afford that amount, there are only two choices left: either one of the working parents will have to quit their jobs, or they will have to switch to Indonesian, Thai or Bangladeshi housemaids and expect generally more-intense cultural differences.
This article appeared in the Hong Kong Economic Journal on April 25
Translation by Alan Lee with additional reporting
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