SINCE THE 1970s, overseas Filipino workers (OFWs) have been significant contributors to the Philippine economy, and have even been said to be a major reason why the country did not falter too much in the Asian Crisis.

Just last year, remittances of these workers reached $7.4 billion, or 75 percent more than the total value of the country’s 1998 exports to Japan, second among the Philippines’ top trading partners. Yet the government that benefits from this largesse has yet to return the favor, and seems to be at a perpetual loss over how to ensure that the joy almost all OFWs feel upon coming home will last.

Not that the government hasn’t tried helping OFWs find a stable means of income once they return for good. Indeed, since 1988, the Overseas Workers Welfare Administration (OWWA) has run a livelihood program aimed at helping facilitate the gradual reintegration of the returnees into the economic mainstream. But labor experts say such efforts have not had much effect, and are reflective not only of an inept bureaucracy but also of the shortsightedness of state planners.

A case in point is that of Leni (not her real name) and her family. Leni’s husband had worked in Saudi Arabia in the 1980s before becoming a lecturer for the Philippine Overseas Workers Administration (POEA). But he was simply not making enough to provide a decent education for their three growing girls. So that her husband would not have to work abroad again, Leni borrowed P50,000 through OWWA’s Expanded Livelihood Development Program (ELDP).

Leni wanted to have her very own sari-sari store. Following OWWA instructions, she prepared several documents, including a simple business plan. Soon enough, credit investigators visited her home and she received the money after six months. Leni then attended a half-day training seminar at the OWWA, deemed an instant entrepreneur, and was sent on her way to set up her small business.

Four years later, her husband is once again overseas and Leni now owes OWWA P85,000. As for her store, she says, “Sad to say, it went bankrupt and so repayment has been difficult.”

OWWA Plans and Programs Director Antonieta Dizon herself concedes that loan availees need more than a seminar to make a go of their businesses. “You have to support them in terms of training, you have to closely monitor them, provide a supervised credit,’’ she says. “Basically, if you do not continue to guide them, the project will eventually dissolve because it will only eat capital and earnings. Then it’s finished.”

OWWA insiders say this is essentially what has happened to countless small businesses initiated through the ELDP. Failed businesses, however, only mean those who took out the loans will have difficulty making repayments.

Unsurprisingly, the ELDP has a low repayment rate. According to EDLP Project Development Officer Serge Borgueta, only 20 to 30 percent of those who avail of the program’s loans eventually pay their debts. To Borgueta, though, the reason for this is not the lack of business training or support from OWWA, but because of the “dole-out mentality” that he says is characteristic of Filipinos.

David Dicang, officer-in-charge of OWWA’s Publication and Information Division, agrees with this view. He even adds, “Government should not be seen as an agency doling out. There really has to be a degree of responsibility for those you help to put back on track…We’ve encountered many people that file for loans not to put up a business, but just for the heck of having a loan because there’s a window.”

Yet nongovernmental organizations (NGOs) that offer the same service to the same clientele say the opposite. UNLAD Kabayan, which began operations just three years ago, even says its repayment rate is improving. In 1997, it stood at about 60 percent. This year, UNLAD Executive Director May An Villalba puts the figure between 78 to 80 percent. Villalba also says their loan amounts range from P2,000 to P112,000, while the OWWA has a loan amount ceiling of P50,000 for individual clients.

Why there is a vast gap between the repayment rates of those who take out loans through the ELDP and those who borrow from UNLAD may therefore be more than a matter of one having more clients with the so-called “dole-out mentality.”

In truth, Dizon concedes that the ELDP needs a generous infusion of funds that could be used for monitoring clients. She insists that this is needed in order for the businesses they put up to succeed. But the problem, she says, is that since the repayment rate has been dismal, the board that calls the shots at the OWWA has even reduced the budget for all the program’s support services—thus all the more increasing the chances of the ELDP clients’ businesses to fail.

Dicang, though, argues that the expectations for such programs may be too high. “For $25 (welfare fee paid by each OFW) you contributed two years ago and all of a sudden you come back and you want to file a loan for P50,000, and it’s not only you,” he says. “The scenario is not really balanced. Basically, we cannot accommodate that. How could you expect that much?”

But then the OWWA is not exactly destitute. Its net worth in 1997 was P2 billion. That year, according to the annual report of the Commission on Audit (COA), it collected more than P327 million in overseas workers’ welfare fees, which made up 72.5 percent of its 1997 income. Yet less than a third of what it collected from OFWs was spent on programs and projects; the bulk of its expenses went to operation expenditures.

Still, OWWA did manage to extend training and scholarships to some 40,000 people, as it claimed in the COA report. About 27,000 workers and their families also got livelihood and entrepreneurial assistance that year.

But it is ironic—as well as telling—that the agency that aids OFWs set up their own businesses scored low on the presentation of financial statements. According to COA, there were “negative balances” in the agency’s 1997 books and unliquidated funds amounting to hundreds of millions of pesos. The P173 million balance in receivable loans was also “unreliable due to management’s failure to support the accounts.” In the report, Auditor Maria Bautista said that the basic information was incomplete.

Interviewed recently, Bautista elaborated that upon applying for loans, ELDP clients had given all pertinent data that were then evaluated by the OWWA’s credit investigators. “But then after several months or years, there were instances that these OFWs changed addresses,” she said. “Also, many times, there weren’t any dates.”

Bautista blamed the missing information on “lapses in recording.” And while she said she could not remember exactly how many loan applications in the subsidiary ledger were unverifiable, she stressed that “the numbers are quite impressive, that’s why we arrived at this (unfavorable) finding.” Among the COA report’s overall assessment of OWWA’s 1997 performance: “Management wasn’t able to deliver promptly the programs and services which are intended to advance the interest and promote the well-being of Filipino overseas workers.”

To be sure, problems have hounded the ELDP since it began more than a decade ago. At the time, the program, which catered particularly to marginalized OFWs, featured a non-collateral loaning window with lower rates than the banks. But repayment even then was abysmal, and so banks were brought in as conduit.

The thinking behind this move, apparently, was that repayment rates would then improve. But in a 1998 evaluation report on the ELDP, the OWWA’s very own Plans and Programs Office questions the involvement of what it calls “profit-oriented institutions” in what is essentially an aid program.

The report also criticized the 1993 decision of the OWWA Board of Trustees to impose a minimum collection rate of 70 percent on all regional offices. The Board had made the minimum rate a condition for the release of funds “presumably,” said the report, “because of the belief…that the repayment or collection rate is a major determinant in defining program success.” Instead, it merely slowed down operations considerably since the regional offices could not meet the required repayment rate.

Real estate was soon adopted as preferred collateral by 11 of the 15 regional offices, thereby immediately disqualifying those that required assistance the most. Says Malou Alcid, director of Kanlungan, an NGO that works with abused migrant workers: “Women survivors of violence and unsuccessful migrants are the people who they should prioritize. These are the people that need the credit most. But this isn’t the way the program is designed.”

“On paper, it looks nice, but when you actually try it, it’s different,” says Remy Borlongan, who came home several months ago, after 12 years as a domestic helper (DH) in Hong Kong. “There are so many requirements. They ask for a land title, TVs, appliances. And it takes a long time, up to a year. You might as well go to a loan shark. Who has collateral? And if you had property, why would you go for a loan?”

Some OWWA officials try to dodge questions regarding the ELDP by saying that the agency has not been remiss in strongly advising OFWs before they leave the country to save and invest in small businesses. But to save for sufficient funds for a business takes many years, and OFWs often not only have to attend to the needs of their immediate families back home, but also to those of relatives who refuse to believe that working abroad is not synonymous to striking it rich.

Thus, in a survey conducted by the POEA last year, setting up a business was ranked last among the spending priorities of overseas workers. Instead, the respondents said, they spend their remittances primarily on education and basic needs, such as food, shelter, clothing and medicine.

Borlongan herself spent much of her earnings on the education and the needs of her son. In addition, she and her sister, also a DH in Hong Kong, poured a considerable amount of their incomes to rebuilding their family home in Tarlac. The house, once made of wood, had caved in under the weight of Mt. Pinatubo’s ashfall in 1991. Eight years later, it is a concrete, three-bedroom abode, albeit an unfinished one. The washroom still lacks a ceiling and bathing facilities. In the backyard stands a half-built boarding house.

It may take a while before that structure is completed, along with the rest of the house. The money Remy Borlongan managed to saved before she returned was spent just months after her homecoming. A widow who is a semester short of a college degree, she has since been supporting herself and her son with the little she earns from odd jobs. Only in her 40s, Borlongan is considered too old by most employers. She figures her only hope of keeping her small family fed is having a modest business of her own.

Labor experts say there is no question on who is ultimately responsible for the fate of ex-OFWs like Borlongan: the government. Adds Noel Vasquez, former researcher at the Center for Social Policy and Public Affairs at the Ateneo de Manila University: “What has been lacking in the Philippine case is the linkage between contract migration and the needed structural reforms within the economy. The annual remittances, substantial as they are, have not been sufficiently channeled into investments, either at the national level or by the individual worker….”

“Unfortunately,” he also says, “the benefits of contract migration may have encouraged complacency about facing the economy’s serious structural problem.”

Interestingly enough, the NGO UNLAD Kabayan, which specializes in OFW savings mobilization in host countries, fund management and enterprise development, was born out of a 1994 study that had similar conclusions.

“Despite documented abuses, families splitting up, infidelities, parentless children, migrants still left because there was no opportunity for work,” says UNLAD head Villalba. “So then we conducted a study asking the question ‘Is it possible to have life after migration? And what kind of life is it?’ We looked into the viability of a planned and organized reintegration.”

She recalls, “The research came out with two things which would become the building blocks of UNLAD Kabayan. First, migrants are capable of saving. Second, micro-enterprises can be built and are viable in the Philippines…That was the impetus that brought reintegration as a program in place.”

Villalba, who was formerly the director of the Asian Migrant Center in Hong Kong, is decidedly upbeat about her young organization and the work it is doing. Last year alone, she says, UNLAD helped set up almost 40 family-based micro-enterprises. It has also assisted more than 100 individuals with savings and investment planning since it began operations in 1996. For an NGO with a staff of only seven and an operating budget of over P2 million a year, this is no mean feat. But Villalba says, “When you’re in crisis, you’re always creative.”

Roger Bohning, director of the International Labor Organization’s (ILO) Southeast Asia and the Pacific Multidisciplinary Advisory Team (SEAPAT) acknowledges the sterling showing of NGOs like UNLAD in mobilizing the savings of OFWs “in a particular location such Hong Kong and Japan.”

But he says they do less well when it comes to economic support. Bohning points out that these NGOs must rely on charity funds or one-off projects that are intermittent. More often than not, he says, such projects come to an end before the micro-enterprises become self-sustaining.

Villalba, however, is not easily dissuaded from her optimistic outlook. “The least that can be done is to create a job for yourself as an alternative,” she says. “And if you can create jobs for others, then they’re not compelled to go overseas. On a micro-level, you could build a vibrant economy.”