Returning heroes

Thousands of OFWs are returning home as the economies of their host countries suffer serious downturns due to the coronavirus pandemic, and it is a sad homecoming. They lost their jobs, no job prospects here.

They are also having a tough time getting to their home provinces due to bureaucratic delays in processing their quarantine paperwork. No way to treat returning modern day heroes. Good thing the President gave the bureaucrats an ultimatum to get them home in three days.

The OFWs are coming home in droves, straining the quarantine facilities of the government. Foreign Affairs Undersecretary Sarah Lou Arriola reported that 28,589 OFWs have returned to the country as of May 21.

More OFWs are expected to be back because they have been laid off by their employers as lockdown closed many businesses. Some 300,000 OFWs are expected to return to the Philippines this year, DILG Secretary Eduardo Año told ABS-CBN’s TeleRadyo.

Particularly hard hit are Filipinos working in cruise ships. Many of them are waiting for their cruise ship companies to fly them back to Manila from various ports worldwide. Philippine Airlines had been kept busy flying to exotic ports like Barbados and Miami to bring the Pinoy seamen home.

Because jobless OFWs abroad need help, close to 86,000 of them have been extended assistance by the labor department through the Philippine Overseas Labor Offices (POLOs) in 40 posts across the globe.

Those qualified were granted the one-time P10,000 cash assistance from the P1.5-billion emergency aid program for OFWs who were displaced from their jobs due to lockdowns in their host countries or stranded by the community quarantine in the Philippines.

OFWs who are stranded in their job sites and/or experience “no work, no pay” due to the pandemic since  March 1, are also eligible for the cash aid.

According to the World Bank, money sent home by Filipinos working abroad reached a record $30.1 billion last year, equal to about 10 percent of the country’s gross domestic product.

The BSP’s baseline assumption is that remittances will grow three percent this year, BSP assistant governor Iluminada Sicat was quoted in a Bloomberg story. However, she added that with some OFWs being sent home, the bank now is “seeing some contraction in remittances by about 0.2 to 0.8 percentage point,” with further declines possible as the pandemic continues.

The World Bank predicts remittances to the Philippines will fall about 13 percent this year, Dilip Ratha, senior financial economist in Washington, said in an e-mailed reply to questions from Bloomberg.

Remittances from OFWs have saved our economy for years. What was supposed to be a temporary strategy of sending workers abroad started during the Marcos years became a permanent part of our economy.

OFWs provided a steady stream of foreign exchange, helping offset the widening trade gap and limit the current account deficit. Remittances also provided the strong purchasing power that fueled a boom in our economy.

Due to the worldwide pandemic, Manny Geslani, an old hand in the manpower export business, said only the Balik-Mangagawa medical personnel have been deployed for new hires since last March.

Even before the pandemic, Geslani said, re-hires last year had taken a 50 percent drop due to poor economies in the Middle East. Only Taiwan and Hong Kong markets were not affected. With the resurgence of protests in Hong Kong, the future of that market for our workers is in doubt.

We will be severely challenged by a serious unemployment problem with returning OFWs, local businesses closing due to the lockdowns and new graduates joining the labor force.

If this government knows what’s good for us, it will move faster in improving our investment climate. There had been long pending proposals to amend laws to better attract investors. But nothing much has moved in Congress.

We are also losing the contest to attract companies leaving China to Vietnam, Thailand and Indonesia. An economic emergency with serious social stability implications is in the offing.

The economic managers have good proposals, but the politicians tend to water those down for their self-interest. Hopefully there is more patriotism among the legislators as they tackle the well thought out proposals from DOF and NEDA. Otherwise, we have big problems ahead.

Crony bailout?

With the government desperately trying to scrape up money from its various agencies to beef up the coronavirus fund, guess what the Department of Energy is planning to do?

It wants to buy 10 percent of the Malampaya shares acquired by Dennis Uy from Chevron. That will cost the taxpayers some $56 million or some P2.8 billion. That’s also equivalent to the premium over book value Uy paid when he bought the shares.

PNOC-EC already has a 10 percent share in Malampaya that was acquired years ago. That enables government access to inside knowledge of what’s going on with the project.

Energy Secretary Alfonso Cusi doesn’t need the additional shares now. It is obviously to help a crony who could use some cash these days. Didn’t Cusi sell his Starlight logistics/shipping company to Dennis Uy some years ago?

Actually, Cusi earlier announced the plan to buy Malampaya shares from Uy was a done deal. He later retracted that, saying the COVID crisis prevented completion of the deal. But he said he would find ways to advance the planned transaction.

That purchase is not without risk. We are talking here of a nearly exhausted gas reserve. While technology can squeeze out some more gas from it, that’s not a guarantee.

Drilling new wells in the hope Malampaya can be productive beyond 2024 is a speculative and expensive venture specially with the collapse in world oil prices. Probably that’s why Uy wanted to minimize his exposure.

If Cusi is protecting the interest of the people, he would have asked Uy and Shell for a carried interest, meaning additional free shares in exchange for an extension of the concession agreement.

Finance Secretary Sonny Dominguez should have a say on “investments” like this. Sweetheart deal, if we ever saw one and at the worst possible time.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco