Table of Contents Table of Contents

List of Tables v List of Figures vii List of Text Boxes vii List of Annexes vii List of Acronyms and Abbreviations viii Foreword xi Preface xii Acknowledgements xiii Executive Summary xiv

I. Background of the Study 1 A. Research Objectives 1 B. Research and Survey Methodology 2 1. Baseline Survey and Sampling for Italy-based 3 2. Data Analysis and Focus Group Discussions 4 3. Research Validation 4 C. Scope and Limitations of the Study 4

II. The Context of Migration in Italy and the Filipino Migrant 6 A. The Italian Context 6 1. Demographics of the Migrant Population in Italy 6 2. Salient Features of Present Immigration Laws in Italy 8 B. Profile of Filipinos in Italy 11 1. Recording Available Migration Data about Filipinos in Italy 11 2. Issues and Challenges in –Italy Migration 12

III. The Remittance Environment in Italy and in the Philippines 17 A. Overview of the Italy–Philippines Remittance Corridor 17 B. Remittance Policy and Market Environment in Italy 19 1. Informality of Remittance Channels 19 2. The Banking and Remittance Regulatory Environment 20 3. Anti-Money Laundering Law and Other Security Measures 21 C. Remittance Policy and Market Environment in the Philippines 23 1. Remittances and Migration Profile of the Philippines 23 2. Remittance Transaction Costs for the Italy–Philippines Corridor 26

IV. Survey Findings on the Remittance Behaviour of Filipinos in Italy 28 A. Demographic Profiles of Surveyed Filipino Remitters 28 B. Migration History and Current Occupation 30 C. Frequency, Amounts and Beneficiaries 32 D. Channels, Services and Products 36

iii Table of Contents

E. Non-Monetary Remittances and Hand-carried Remittances (Padala) 41 F. Income and Expenses of Italy-based Filipino Remitters 43 Special Section: Households and Families of Italy-based Filipinos 46 1. Household Composition 46 2. Households’ Income Sources and Expenditure 48 G. Savings and Investment Practices and Behaviour of Italy-based Filipino Remitters 48 H. Retirement Plans and Aspirations of Filipinos in Italy 58

V. Leveraging Migrants’ Remittances for Development 61 A. The Context of Migration and Development 61 1. Fiscal Position of Origin Country 62 2. Poverty Reduction 62 3. Uses of Remittances by Migrant Households 62 4. Investments in Human Capital 63 5. Housing 64 B. Philanthropic Activities of Italy-based Filipinos 64 C. Philippine Government Programmes on Migration and Development 66 1. Protection of Nationals Overseas 67 2. Reintegration Services 67 D. Allied Government Programmes and Services Tapping Migrants’ Skills and Resources for Development 71 Evaluating Philippine Government Agencies’ Services 72 E. Philippine Civil Society Organizations 76 F. Rural Banks, Cooperatives and Microfinance Institutions 77 G. Italian Efforts Related to Migration and Development 81

The Italy–Philippines Migration and Remittance Corridor H. The Work of Filipino Associations in Italy for the Homeland 82 1. Membership in Organizations 83 2. Filipino Associations in Italy as Agents of Change: Prospects and Challenges 84

VI. Recommendations 88 A. Enhancing and Strengthening Philippine Government Programmes and Services 89 1. Imparting Financial Literacy / Knowledge to Migrants and Their Families 89 2. Reviewing Reintegration Processes and Services 90 3. Tapping the Migrants’ Welfare Fund as a Source for a Development Fund 91 4. Improving Local Environments for Migrant Entrepreneurship 92

iv The Italy–Philippines Migration and Remittance Corridor Table of Contents Table of Contents

B. Strengthening the Migration and Development Framework and 93 Migration Policies in the Philippines 1. Review of the Overseas Employment Paradigm 94 2. Integration of Concrete Milestones Concerning Migration and Development into the MTPDP 94 3. Policy Advocacy 95 4. Access to Information 95 C. Improving the Investment Environment for the Productive Flow and Collection of Remittances 95 1. State Development of OFW Bonds 96 2. Pre-Need and Insurance Products 96 3. Migrant Philanthropy 96 D. Enhancing the Banking and Remittance Environment of the Italy–Philippines Remittance Corridor 97 1. Actions for Italy 98 2. Actions for the Philippines 99 E. Creating an Enabling Environment for Filipino Migrants in Italy 99 1. Strengthening Support for Migrant Integration 100 2. Cooperation among Labour Sectors 100 3. Opportunities for the Youth 101 4. Regular Dialogue between Italian and Philippine Stakeholders 101 F. Areas for Further Research on the Italy–Philippines Remittance Corridor 101 1. Impact Assessment of Stakeholders’ Migration and Development Efforts 101 2. Studies to Support Coordination between Italy and the Philippines 102 3. Disparities in Migration and Remittance Data 102 4. Remittance Behaviour of Filipinos in Italy 103

Bibliography 104

List of Tables Table 1: Italy-based Filipino remitter survey locations 3 Table 2: Top 16 foreign populations in Italy (male and female, as of 1 January 2009) 6 Table 3: Distribution of the Filipino migrant population in Italy, by capital cities and other communities 7 Table 4: Employed persons in economic sectors, 2006 (by nationality and sector, %) 8 Table 5: Immigrant worker quotas in Italy by country-based preferential allocations within the yearly contingent 10 Table 6: Total number of newly deployed workers in Italy (from 1993 to 2007) 12

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Table 7: Remittances from Filipinos in Italy (USD thousands) 17 Table 8: Remittances by Italy’s immigrants to their countries of origin (in thousand euro) 18 Table 9: ’ remittances by region of origin 23 Table 10: Overseas Filipinos’ cash remittances coursed through formal and informal channels(in USD millions) 24 Table 11: Global reach of remittance services by major Philippine commercial banks 26 Table 12: Average costs and exchange rate margins 27 Table 13: Age distribution of respondents 29 Table 14: Legal status of migrants 29 Table 15: Levels of educational attainment 30 Table 16: Respondents’ first year in Italy 31 Table 17: Countries of residence/work before Italy 31 Table 18: Current occupation (multiple responses) 32 Table 19: Frequency of remittance to the Philippines 33 Table 20: Frequency of remittance by gender (%) 33 Table 21: Monthly amount remitted in euro 34 Table 22: Monthly amount remitted in pesos 35 Table 23: Occasional amounts remitted per transaction (in euro) 35 Table 24: Occasional amounts remitted per transaction (in pesos) 36 Table 25: Recipient of remittance in the Philippines 37 Table 26: Popular remittance channels 38 Table 27: Source of awareness and information on remittance channels 39 Table 28a: Philippine banks most commonly used by respondents 39 Table 28b: Remittance channels used by Filipino migrants in Italy

The Italy–Philippines Migration and Remittance Corridor Table 29: Comparison of the remittance channels Filipino migrants 40 have used Table 30: Satisfaction level with existing remittance transfer services 41 and other services from the private sector 42 Table 31: Other non-monetary items sent back home 43 Table 32: Value of cash and gifts bought home (weighted averages) 43 Table 33: Personal sources of income (employment and other sources) 44 Table 34: Monthly income from one source of income 44 Table 35: Monthly income from a second source of income 44 Table 36: Monthly income from a third source of income 45 Table 37: Breakdown of household expenses of respondents 47 Table 38: Household composition (multiple responses) 48 Table 39: Household members contributing to household income 49 Table 40: Monthly savings amount (in euro) 49 Table 41: Where savings are kept 50 Table 42: Banks that respondents use for their savings

vi The Italy–Philippines Migration and Remittance Corridor Table of Contents Table of Contents

Table 43: Investments in Italy and in the Philippines 51 Table 44: Top responses to investment-related questions 54 Table 45: Estimated monthly budget of overseas Filipinos in Italy (in euro) 55 Table 46: Annual budget of overseas Filipinos in Italy (in euro, selected scenarios using the data from survey) 57 Table 47: Type of business aspired for 59 Table 48: Places in the Philippines to retire 60 Table 49: Items to which remittances are allocated by beneficiary families in the Philippines 63 Table 50: Causes to which overseas Filipinos in Italy donate 65 Table 51: Interest in contributing to help communities in the Philippines 65 Table 52: Preferred charitable and community causes (top-of-mind) 66 Table 53: Satisfaction ratings for government organizations 73 Table 54: Satisfaction ratings for government organizations 75 Table 55: Performance of the Philippine Cooperative Central Fund Federation for the Livelihood Development Program for OFWs 79

List of Figures Figure 1: Concentration of Filipino migrants in Italy 7 Figure 2: Ownership of selected items, as percentage of the total 53 number of respondents

List of Text Boxes Text Box 1: Financial inclusion of immigrants in Italy 22 Text Box 2: Financial literacy for overseas Filipinos 25 Text Box 3: Almost nothing left to save in the monthly budget? 55 Text Box 4: A workers’ resource centre in the host country 70 Text Box 5: Filipino councillors in Italy as “influences” for fellow Filipinos 85 Text Box 6: A Filipino migrant’s hometown with an “Italian facade” 87

List of Annexes Annex 1: Sampling Formula to Determine Survey Respondents 113 Annex 2: Details of the Surveys Conducted in the Philippines and in Italy 114 Annex 3: Philippine Government Services in the Protection of Nationals Overseas 115 Annex 4: Reintegration Services of Philippine Government Agencies 119 Annex 5: Philippine Civil Society Organizations 122 Annex 6: Philippine Cooperatives 125 Annex 7: Profiles of Some Filipino Migrant Associations in Italy 126

vii List of Acronyms and Abbreviations

ABI Associazione Bancaira Italiana ISMU Fondazione Iniziative e Studi sulla Multietnicita ADB Asian Development Bank ISTAT Istituto Nazionale di Statistica AML Anti-Money Laundering KOOL-N Kooperatibang Likas ng Nueva Ecija BdI Banca d’ Italia Landbank Land Bank of the Philippines BDO Banco de Oro Universal Bank LDPO Livelihood Development Program for BIBE Bank IM Bistum Essen OFWs BPI Bank of the Philippine Islands LGU Local Government Unit BSP Bangko Sentral ng Pilipinas LinKaPil Lingkod sa Kapwa Pilipino BTL Bannuar ti La Union Metrobank Metropolitan Bank and Trust Company CeSPI Centro Studi di Politica Internazionale MFI Microfinance Institution CFO Commission on Filipinos Overseas MICOOP Microfinance Innovations in Cooperatives Programme DFA Department of Foreign Affairs (Philippines) MSAI Migrants’ Savings and Alternative Investment DOLE Department of Labor and Employment (Philippines) MTO Money Transfer Organization DTI Department of Trade and Industry MTPDP Medium-Term Philippine Development Plan (Philippines) NATCCO National Confederation of Cooperatives EC European Commission NLDC National Livelihood Development ERCOF Economic Resource Center for Overseas Corporation Filipinos NLRC National Labor Relations Commission EU European Union The Italy–Philippines Migration and Remittance Corridor NRCO National Reintegration Center for FGD Focus Group Discussion Overseas Filipino Workers FWRC Filipino Workers Resource Center NSO National Statistics Office GFMD Global Forum on Migration and OECD Organisation for Economic Development Co-operation and Development Pag-Ibig Home Development Mutual Fund OF Overseas Filipino INAFI International Network of Alternative OFCs OFW Family Circles Financial Institutions OFW IOM International Organization for Migration OTOP One-Town, One-Product

viii The Italy–Philippines Migration and Remittance Corridor List of Acronyms and Abbreviations List of Acronyms and Abbreviations

OWP Overseas Workers Program PTTC Philippine Trade Training Center OWWA Overseas Workers Welfare Administration RCBC Rizal Commercial Banking Corporation PCF Philippine Cooperative Central Fund ROSCAS Rotating Savings and Credit Associations Federation SEA South-East Asia PhilComDev Philippine Consortium on Migration SEDPI Social Enterprise Development and Development Partnerships Inc. PhilHealth Philippine Health Insurance Corporation SIDC Soro-Soro Ibaba Development Cooperative, Philippines PhilPaSS Philippine Payments and Settlements System SOF Survey on Overseas Filipinos PNB Philippine National Bank SPSS Statistical Package for the Social Sciences PDOS Pre-Departure Orientation Seminar SSS Social Security System (Philippines) PEOS Pre-Employment Orientation Seminar TESDA Technical Education and Skills Development Authority PERA Personal Equity and Retirement Account Law UIC Ufficio Italiano dei Cambi POEA Philippine Overseas Employment UN- INSTRAW United Nations International Administration Research and Training Institute for the Advancement of Women POLO Philippine Overseas Labor Office

ix

Foreword Foreword

At 200 million migrants worldwide, who send home an estimated USD 283 billion of foreign exchange earnings in 2008 (World Bank), remittances have been the most visible and immediately measurable gain from the international migration of people seeking employment and productive lives abroad. Important questions have been raised as to how remittance flows have actually made an impact on development. In recent years, development, as produced by migration flows, has been a major topic of discussion in international policy conventions such as the Global Forum on Migration and Development.

Remittances have been acknowledged for sustaining the Philippines’ consumer-driven economy, for the rise of the OFW middle class, for the growth of the service industry and the real estate residential sector, and for the improved access to health and education services. There is value in understanding consumer behaviour and spending patterns in relation to how they affect savings, investments and enterprises. Although the migrants and their beneficiaries have absolute control of the use of their remitted earnings, if they are taught how to spend these responsibly and are shown other spending options, the re-channelling of remittances for greater gains becomes possible.

This study reviews the migration and the remittance corridor between the Philippines and Italy through a development lens. The migrant flows from the Philippines to Italy make a strong case for development analysis. Filipino migrant workers in Italy have been able to show back home the fruits of their hard work through the improved quality of lives of their families and generous contributions to the philanthropic projects of their adopted communities in Italy. They provide regularization programmes to irregular migrants, offer entrepreneurial and language training facilities, and allow Philippine banks to promote remittance programmes. These are the tags usually attached to Filipino migrant workers in Italy. With its attempt to broaden the baseline data useful in migration and development analysis, this study hopes to contribute to the discussion of the many other complex issues and challenges surrounding Filipino migrant labour in Italy.

The International Organization for Migration (IOM) aims to build the knowledge about the impact of migration on development and how migration can propel development. The IOM has been building the capacity of member-countries to understand migration and development as a coordinated policy and governance framework. It plays a key role in organizing and sustaining the Global Forum on Migration and Development in the hope of supporting the Government of the Philippines in translating knowledge into policy and action.

Bruce Reed Regional Representative IOM Mission with Regional Functions, Manila, Philippines

xi Preface

This study was carried out by the International Organization for Migration (IOM) with its partner, the Economic Research Center for Overseas Filipinos (ERCOF). The findings are based on the project entitled “Improving Knowledge of Remittance Corridors and Enhancing Development through Interregional Dialogue and Pilot Projects in South-East Asia (SEA) and Europe, with special focus on the Philippines and Indonesia”. The project was funded by the AENEAS Programme of the European Commission (EC).

The aim of the project was to promote the link between remittances and development in SEA and to support the European Union’s ongoing efforts of managing migration challenges and promoting development in SEA countries where migrants originate. Towards this objective, three activities were carried out: i) baseline research on selected remittance corridors, ii) national and regional dialogues on remittance and development, and iii) pilot projects to promote productive use of remittances. The baseline research targeted four remittance corridors: Malaysia–Indonesia, Netherlands–Indonesia, Malaysia–Philippines and Italy–Philippines.

This study focuses on the remittance corridor from Italy to the Philippines which represents a significant portion of the total remittances to the Philippines. The findings and recommendations of the research are intended for the benefit of policymaking processes that promote the productive use of remittance. Further studies on this topic are highly encouraged and the materials used for this report can be made available upon request from IOM Manila.

This research was undertaken by the following members of the ERCOF and IOM project research team:

ERCOF

The Italy–Philippines Migration and Remittance Corridor Ildefonso F. Bagasao, Principal researcher Ma. Lourdes T. Lopez, Market research specialist Jeremaiah M. Opiniano, Migration and development specialist Bernadette Radcliffe, Banking specialist Erik Paolo Capistrano, Research associate

IOM

Aiko Kikkawa, Project Manager, IOM Mission with Regional Functions (MRF) Manila Ricardo R. Casco, National Programme Officer, IOM MRF Manila

xii The Italy–Philippines Migration and Remittance Corridor Acknowledgements Acknowledgements

IOM and ERCOF express their gratitude to the following organizations and individuals instrumental to the completion of this research.

On the Italy side, the research team is grateful to Cristina Liamzon of Associazione Pilipinas OFSPES (Overseas Filipinos’ Society for the Promotion of Economic Security), who coordinated the research in Rome, providing invaluable assistance in pooling the field interviewers and encoders (May Alcantara, Analiza Bueno, Frangelico Gregorio, Maria Asean Ng, Jocelyn Ruiz, Lizette Toledo, Marita Toledo, Flora Ventura, Rodrigo Wong and Hazel Ycasa, as supervised by Carina Diregla). Also recognized are Alexandra M. Ganzon, the research coordinator in Milan and Biella; Rosanna C. Espiritu and Evelyn F. Ulpindo for data encoding and processing in the Philippines; Charito Basa and Rosalud dela Rosa of the Filipino Women’s Council who provided valuable insights to the research; the officers and staff of the Rome branch offices of the Philippine National Bank (PNB), Bank of the Philippine Islands (BPI), Banco de Oro (BDO), Rizal Commercial Banking Corporation (RCBC), Metropolitan Bank and Trust Company (Metrobank) and Land Bank of the Philippines (Landbank), for valuable information gathered on Filipino remitters; the Sentro Pilipino chaplaincy in Rome, for insights into the Filipinos in Italy and their associations. The team would also like to thank officials of the Italian government, namely, the Bank of Italy, the Ministry of Interior and the Ministry of Labour; the Philippine Embassy in Rome, specifically the Philippine Ambassador to Italy and the Office of the Philippine Labour Attaché in Rome. Special acknowledgement goes to overseas Filipino workers (OFWs) in Italy and their leaders, including Filipino migrant councillors in Rome, whose hard work and sacrifices for their families have provided inspiration for this research.

On the Philippine side, the research team is grateful to the representatives of the following Philippine government agencies for their insights into the study: Bangko Sentral ng Pilipinas (BSP), Department of Labor and Employment (DOLE), Philippine Overseas Employment Administration (POEA), Overseas Workers Welfare Administration (OWWA), Commission on Filipinos Overseas (CFO), National Reintegration Center for Overseas Filipino Workers (NRCO), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth) and Home Development Mutual Fund (Pag-Ibig).

The research team would also like to thank all the discussants and participants who provided valuable insights and comments to the preliminary findings of this research presented at the Interregional Policy Dialogue on Remittances and Development: Harnessing the Development Potentials of Remittances (The Italy–Philippines Link), organized by IOM and held in 19–20 May 2009 in Rome, Italy.

Appreciation and credit also goes to Akira Murata and Catherine Calalay for reviewing the research data and performing an initial editing of this study for publication.

Last but most important, IOM and ERCOF are grateful for the support that the EC extended to this research project.

xiii Executive Summary

A. The Context of Migration from the Philippines to Italy

Immigration to Italy. Statistics from Italy indicate that the country hosts some 3.8 million foreigners, which includes 113,686 Filipinos. Italy is a young immigration country and its dynamic migration policy framework is based on the country’s need for certain occupations, skills and talents. Italy has continuously clarified the policies and requirements surrounding its quota-based labour migration system through which properly documented foreign workers pass through. Italy’s system also provides for family reunification opportunities, the devolution of migrant regulation, integration schemes to regional or local governments, and amnesty programmes to undocumented workers. The country promotes that their migration policies reflect its recognition of the principle of equality, of migrants’ rights and the country’s desire to help migrants integrate into local society.

Emigration from the Philippines. The Philippines is the origin country of some 8.7 million Filipino emigrants. This figure includes an estimated 82,594 temporary migrants, 24,598 permanent migrants, and an estimated 13,000 undocumented Filipinos in Italy. The Philippines has established a complex migration bureaucratic system wherein several government agencies manage the outflow of Filipino citizens overseas and seek to address the positive and negative consequences of their migration. There are also numerous actors from the private sector and civil society in the Philippines that are involved in international migration and development issues.

Profile of Filipinos in Italy. Some Filipino temporary migrants have become permanent residents of Italy. ISTAT data cited in the Organisation for Economic Co-operation and Development ’s migration statistics databank (OECD, 2009) show that only 1,382 Filipinos have acquired Italian citizenship from 1996 to 2004.

Approximately 80 per cent to 90 per cent of Filipinos in Italy are domestic workers or caregivers. There

The Italy–Philippines Migration and Remittance Corridor are also a significant number of permanent settlers, reunified families and Filipino children who have been petitioned by their parents to settle, study and work in Italy.

Issues facing Filipinos. Filipinos in Italy face myriad obstacles, most of which are interconnected. They are often about the types of jobs they land and, with these Filipinos being first-generation migrants, also about a host of underlying sociocultural and economic issues. These include: the problems of over-skilled or overeducated Filipinos who end up working in domestic services; the pressure to take on multiple jobs to be able to earn more and provide for themselves and their families in Italy and back in the Philippines; the complexities of irregular or illegal migration; and the difficulties in sociocultural adaptation and integration, with particular emphasis on migrant children.

xiv The Italy–Philippines Migration and Remittance Corridor Executive Summary B. The Banking and Remittance Environment in the Italy–Philippines Corridor

1. Italy

Regulatory body. The Italian central bank, Banca d’ Italia (BdI), is the primary regulator of banks and other formal financial institutions in Italy. Its function includes the licensing, regulation and monitoring of bank and non-bank institutions that are engaged in the transfer of remittances. As a country that is not only a host country but also a country of origin for migrants, Italy itself receives a considerable amount of remittances from Italians overseas.

Remittance data. The processes for collecting, monitoring and reporting data about the outflow of remittances from Italy have been placed under massive review and assessment in the last five or six years. The old monitoring system recorded EUR 2.706 billion of remittance outflows in 2004. In 2007, under a new reporting formula, remittance outflows amounted to EUR 6.043 billion.

Such a dramatic rise in remittance outflows may be attributed not only to an increased volume in remittance outflow but also to the new system that was more successful in collecting remittance numbers. The Italian regulatory bodies dealing with remittances made decisive steps to improve the management and monitoring of these outflows. It integrated a formerly independent money laundering authority into the BdI and included the transactions of money transfer organizations or MTOs (which are considered non-bank agencies) in the monitoring system. Other measures adopted were bimonthly reports of outgoing remittances by the sender’s province and recipient’s destination country, the cross-check of figures with bank reports, and a new system that streamlines figures from bank and MTO reports.

Financial inclusion of migrants in Italy. A survey by the Italian Banking Association of the financial and insurance needs of migrants showed a high “financial inclusion rate” (approximately 70% to 80%) among foreigner populations in Italy, including Filipinos. The 2008 survey also identified certain factors that influence a migrant’s decision to use Italian banks, such as: nationality, education, previous bank experience in origin country, length of stay in Italy, improvements in employment status, ability of bank to offer products and services that directly respond to migrants’ needs, and gender.

Filipino remittances from Italy. BdI data shows that based on total figures from 2004 to 2007, Filipinos in Italy are the third biggest remitters at EUR 1.746 billion.

2. The Philippines

Banking sector. The Philippines has a relatively well-developed banking and financial sector, compared with other developing countries that deploy migrants abroad. The sector is regulated primarily by the country’s central bank, Bangko Sentral ng Pilipinas (BSP), which regulates and licenses banks, non-banks and new entities involved with remittances or remittance-related operations. The BSP also has an Anti-Money Laundering Council that enforces the country’s anti-money laundering and anti-terrorist financing laws.

xv Remittance players. The remittance sector has grown alongside the expansion of the Philippine overseas deployment system. Philippine banks, foreign and locally owned MTOs, telecommunications companies, and other financial institutions are now involved in remittances.

Remittance players in Italy. In Italy, six Philippine banks provide services to Filipinos but their licences are limited to money transfer operations. Despite this limitation, they dominate the remittance market in this corridor. Among the international money transfer agencies, Western Union is the dominant provider.

Policy developments affecting remittances. The BSP and major commercial banks have agreed to use the Philippine Payments and Settlements System (PhilPaSS) to lower the costs of local interbank remittance transfers and thereby lowering the costs of remittance. Additionally, the Philippine government has passed a Personal Equity and Retirement Account (PERA) Law that aims to encourage more Filipinos to save and invest.

Migration and development policies and strategies. The management of migration and harnessing the gains from it are not easy tasks, with an estimated 8.5 million to 10 million Filipinos living in some 239 countries and territories overseas. The Philippine system for migration and overseas deployment is implemented through varied but complementary strategies which can be classified into three. The first is Protection, which includes establishing and managing support and a migration environment that supports national development and orientation services for migrants. The second is Migration Management and Reintegration Process, which implements programmes and services to empower overseas Filipinos or OFs (both temporary and permanent migrants) to maximize the gains of migration in ways that will benefit them and their families. The third component consists of Allied Government Programmes and Services, or programmes, initiatives and laws that respond to specific migrant needs and seek to tap migrant capital skills and resources for the development of certain key economic sectors.

C. The Remittance Behaviour of Filipinos in Italy The Italy–Philippines Migration and Remittance Corridor The study carried out a survey among 368 Italy-based Filipino remitters. The major findings include the following:

Demographic profiles. Approximately 70 per cent of respondents are living and working in Rome, the Italian capital. Most of the respondents are female (75%), and the average age of respondents is 41 years old. About 59 per cent of respondents are married and 79 per cent are domestic workers in Italian households. Interestingly, the survey revealed that as many as three fourths of Filipino migrants in Italy have had some sort of college education and 6 per cent even had postgraduate studies.

Awareness of remittance services. The survey respondents exhibited high awareness of remittances services and products. All were able to identify at least two or three banks that offer remittances services in Italy. Another popular method of sending remittances home is the Filipino practice of padala, whereby the money is brought home by relatives or friends to be given to the migrants’ beneficiaries. As much as 97 per cent (332) of the respondents admitted to know about padala.

xvi The Italy–Philippines Migration and Remittance Corridor Executive Summary Approximately 41 per cent of the respondents reported that their main source of information about remittance channels are the banks, which indicates that the marketing of banks are able to reach a significant portion of potential remitters.

Frequency of remittance. Survey results indicate that migrant workers in the Italy–Philippines remittance corridor regularly transfer resources. About 72 per cent of surveyed migrants remit money every month to the Philippines. Another 11 per cent remit every other month, while 91 per cent of the respondents reported that they remit at least every quarter. Women are more likely to remit more often than men (65%), with 77 per cent of women remitting monthly compared to 65 per cent of men.

Remittance size. The average monthly remittance amounts to EUR 354. Several factors contribute to the amount a migrant is able to send: i) the migrant’s income; ii) how frequently a migrant remits and the purpose of the remittance; iii) the preferred denomination of remittances; and iv) the living and personal expenses of the in the host country.

Percentage of income for remittances. Respondents allocate portions of their income as remittances to be sent to the Philippines. On average, the migrants send home 34 per cent of their income.

Remittance in kind. Filipinos in Italy also send non-monetary items home. As much as 77 per cent of the respondents send home items such as food, clothes, accessories, appliances, decorative items, cellular phones and other electronic gadgets.

Personally bringing money home. Three fourths of the study’s respondents said that they bring money home with them. Among these respondents, approximately 39 per cent brought home euros while 53 per cent brought home Philippine pesos. These migrants brought home an average of PHP 268,642 (USD 5,832.96) or EUR 2,461 – an amount equivalent to nearly seven months worth of monthly remittances, assuming an average remittance of EUR 354 each month. At least 27 per cent of respondents come to the Philippines every two years, while 18 per cent return home annually.

Sources of income. The study revealed that Italy-based Filipinos received income from many sources. Among the 314 respondents who work in one job, the average income is EUR 1,044. However, aside from their regular work, many take on more than one job that provides them with extra income ranging from EUR 314 to EUR 474. Additionally, 8 per cent of the respondents received income from businesses in the Philippines.

Household incomes other than remittances. Seventy-seven respondents (or about 20% of the total respondents) provided details about household incomes earned by other members of their families. These additional incomes average PHP 115,000 (USD 2,496.97) annually.

Savings behaviour. Seven out of 10 Filipinos in Italy save. Among those who are able to save, 41 per cent of them recalled that they were able to save a maximum of EUR 100 each month. Around 12 per cent carry around a small amount of their savings with them in case of emergencies, while 7 per cent place savings in insurance products and in an informal Filipino method of rotating savings and credit called the paluwagan.

xvii Ability to save. Among the survey respondents, 71 per cent (or 257 out of the 360 respondents) answered that they were able to save. The rest (29%) do not have savings. This exhibits a proportionately high number of respondents who keep savings. Those who save were asked where they keep their savings. All those questioned reported that they kept money in the bank.

Investments. In Italy, some Filipino remitters maintain savings accounts (13%) or current accounts (55%) in Italian banks, while others invest in jewellery (12%). In the Philippines, the top three places where migrants keep their savings are savings accounts (30%), additional house and lots (12%) and additional residential lots (11%).

It was discovered that few respondents (16% of 255 respondents) looked, studied or compared benefits when making investment decisions. Almost half (48%) reported that they had no other influence but themselves when they make their choices. This may mean that there is a need for information about the range of investment options possible. Given that many of the respondents possess high educational backgrounds, building their capacities through financial literacy training is a necessary and hopefully fruitful intervention.

Need for information about how remittances are spent. The National Statistics Office (NSO) of the Philippines shows that there are 1.601 million Filipino households in the Philippines that receive cash, gifts and other forms of income from abroad (NSO-FIES 2006 in IMDI, 2008). However, a question about household expenditures in the Philippines revealed that almost all the respondents were not aware how their remittances are being budgeted and spent. The survey had no follow-up questions to interrogate this further. This is a puzzle and another issue that could prove important for further research.

Retirement. Approximately 91 per cent of respondents plan to retire in the Philippines, and half of them wish to return to their home provinces. When asked to identify what factors would prompt them to retire, 45 per cent of respondents answered that retirement may be time-bound (e.g. in 15 or 20 years), while 42 per cent said retirement is age-related (i.e. “when I reach 65 years old”). The Italy–Philippines Migration and Remittance Corridor Migrant philanthropy. About 43 per cent of respondents said they or their households in the Philippines have donated to specific local causes or charitable groups. More than half of respondents (60%) are interested in contributing directly to help their hometown communities. The principle of trust in an organization, a person or a cause appears to be a major influence in a migrant’s decision to donate in the Philippines.

D. Recommendations

The data gathered by this research indicate the presence of several key factors that offer excellent prospects for leveraging migrant remittances and resources to promote community and national development by improving the Italy–Philippines corridor. These factors include the following:

• A large and steady stream of income and remittances that flow through the Italy–Philippines corridor is supported by the preference for formal remittance channels among migrants.

xviii The Italy–Philippines Migration and Remittance Corridor Executive Summary • Majority of Italy-based migrants show keen interest to contribute to their communities. • Italy’s immigration laws that are based on the principles of upholding equality and migrant rights and the provision of basic services to migrants, already enforced with African countries, could be replicated in Asia. • The Philippines has an elaborate and well-developed overseas employment management system that includes pre-departure orientation seminars (PDOS) for migrant workers, programmes working for orderly deployment and the protection of migrant nationals, and a fiduciary migrants’ fund that provides for emergencies. • There are numerous non-government agencies, and private sector and civil society actors that offer various products and services designed to respond to migrants’ basic needs.

The presence of such a combination of favourable factors in the Italy–Philippines corridor is critical to surface and identify good practices that can be repeated, and further enhanced. For this reason, a number of recommendations are offered to stakeholders and policymakers to achieve goals in migration that would: benefit migrants, their families and their home communities; mitigate socio-economic costs; and support the economic and development objectives of the Philippines.

1. Further enhancing and strengthening Philippines government programmes and services by: - imparting financial literacy and knowledge to migrants and their families, which entails: • integrating a relevant programme, specifically about how to harness remittances for development into the standard financial literacy course; • devolving the management of pre-employment and pre-departure orientation seminars down to the local government units (LGUs); • incorporating a financial literacy programme into an existing system with adequate legal mandate, structure and regular budget, provided that the institution assumes ownership of the programme and asserts its commitment, to aid that the programme become sustainable; • monitoring and evaluation of the current programmes, which includes monitoring the competency of trainers;

- reviewing and improving the Philippine reintegration process and services; - tapping the Philippines’ Migrants’ Welfare Fund as a source for a development fund; - improving local environments for migrant entrepreneurship, which entails: • improving the local information system about entrepreneurial and business opportunities, profitable ventures, project roll-out procedures and business- licensing; • processing and analysing the experiences of migrant Filipinos in Italy to extract valuable lessons that can be applied at the local setting.

2. Strengthening both the migration and development framework and the migration policies in the Philippines by: - rethinking the current overseas employment paradigm in the Philippines from the expectation

xix that overseas employment is a temporary option to the perspective that labour migration is here to stay: • integrating concrete goals concerning migration and development into the Medium- Term Philippine Development Plan (MTPDP); • advocating policies that create a working synthesis between migration and development frameworks; • using multimedia awareness campaigns to improve access to information about all the products and services that address the migrants’ socio-economic needs.

3. Improving the investment environment for the productive flow and collection of remittances in the Philippines by: • the State’s development of retail treasury bonds for OFWs; • restoring confidence in and setting proper regulations for pre-need and insurance products; • promoting and supporting migrant philanthropy by the creation of comprehensive local development plans for community-oriented donation flows.

4. Reinforcing the banking and remittance environment of the Italy–Philippines corridor in both countries by: • pursuing a wide range of policies and programmes to ensure progressive advancements in banking systems and greater financial inclusion of the public, and to prevent the illegitimate use of financial institutions and remittance channels; • issuing regulations, supporting legislation, and disseminating public campaigns; • promoting healthy competition among financial service providers and rationalizing financial transaction costs.

5. Creating an enabling environment for Filipino migrants in Italy by: • strengthening support for migrant integration; • fostering cooperation among labour sectors, particularly between migrant associa- tions and Italian unions; The Italy–Philippines Migration and Remittance Corridor • identifying opportunities for the migrant youth; • organizing a regular dialogue between Italian and Philippine stakeholders.

xx The Italy–Philippines Migration and Remittance Corridor I. Background of the Study Background of the Study

The Philippines is the country of origin of one of the largest Asian migrant diaspora, with its economy heavily dependent on billion-dollar remittances from Filipinos living and working in some 239 countries and territories. One of these destination countries is Italy, where Filipinos have gone to work as early as the 1970s. By the 1980s, migrant workers were entering this Mediterranean country in waves. Like other Filipinos residing and working in other countries, the remittances that Filipinos in Italy send back to their families are a significant source of income not only for the workers’ families but also the communities they live in. The Filipino workers in Italy are currently estimated at 113,686 (ISTAT website, 2009). Around 58 per cent of them are women, many of whom are employed as domestic workers in Italian households and whose incomes feed, clothe, shelter and educate family members in the Philippines. Italian family reunification laws have also allowed Filipino migrants with a permanent or legal status to successfully petition qualified family members to join them in Italy.

As in other countries with large populations of migrant workers, remittances have become the main or primary lifeline of the beneficiaries in the Philippines. Remittances also benefit the local economies of the migrants’ home communities through the multiplier effects of spending on housing, basic necessities, education and health-related needs, all of which also create employment and business activity. At the same time, Filipino associations in Italy are able to raise funds that are remitted home to help disaster victims and finance medical missions, small water infrastructure projects, even the construction or renovation of school buildings in their hometowns.

This research shall attempt to reveal information about the Italy–Philippines remittance corridor and the main stakeholders. It shall also discuss the policy and regulatory environment that governs, regulates and influences behaviour in terms of remittance channelling, spending, saving, investment and donations. The study is designed to provide empirical insights and options that regulators, policymakers, migrant service providers and the migrants themselves could use to create a better migration and remittance environment – one that uses migrant resources effectively, that is, for the greater benefit of family members, the migrant’s host countries and migrant home countries. A. Research Objectives

The general objectives of this research are: 1) to enhance knowledge of migration and the remittance corridors from Italy to the Philippines, and 2) to promote ways by which migration and remittances can support development.

With the use of a market survey, the study focused on collecting primary data and information to build a profile of Filipino remitters in Italy. This was done in response to the lack of baseline population data and data on the remittance behaviour of Filipinos in Italy. Migration data for the Philippines–Italy remittance corridor is filled with anecdotal evidence despite the fact that both countries have institutionalized mechanisms that support and monitor migration. The survey done for this research is one of the few representative surveys that specifically targets Filipino migrants in the Philippines–Italy remittance corridor. It attempts at better overall representation of Italy-based

 Filipino remitters by performing a wide coverage of sampling locations, directing attention specifically to the flow and volume of remittances. It also delves into the migrants’ knowledge of financial options and services, as well as their attitudes and behaviour toward remittance. Moreover, the study seeks to develop activities to harness the development impact of migration and remittance in this specific corridor. It provides documentation on anecdotal evidence and presents information relevant and useful to stakeholders.

The aims of the study are the following:

1. Provide a comprehensive mapping of migration and remittance corridors between Italy and the Philippines, including: • migration flow and the surrounding policy environment in the Philippines and Italy; • remittance flows and volumes, transfer mechanisms, service providers, transfer size/costs/ speed, and regulatory policies and laws; • migrants’ skill levels, educational attainment and financial literacy (including its effects on cultural and socio-economic practices that influence remittance channelling and utilization behaviour); and • other national and international agreements or policy directives and regulation that affect migration and remittances, formal and alternative remittance channels, banking, and remittance innovations.

2. Enhance understanding about remittance behaviour among Filipinos based in Italy and its relationship to development issues.

3. Gather existing and emerging good practices that encourage the use of formal remittance channels and promote the productive use of remittance among migrants and beneficiaries.

4. Develop insights and recommendations for policymakers and other stakeholders who could harness remittances to create an impact on the development of migrants, their families and origin countries. The Italy–Philippines Migration and Remittance Corridor B. Research and Survey Methodology

The research methodology consists of: i) a review of related literature, ii) baseline profile and market surveys of Italy-based Filipinos who remit to the Philippines, iii) key informant interviews, iv) focus group discussions (FGDs), and v) site visits.

An extensive review of related literature was conducted to assess existing migration, remittance and development studies in the Philippines and Italy. In particular, this research benefited from the insights and findings of previous studies and initiatives on migration and remittances of OFs including a 2005 Asian Development Bank (ADB) study, as well as the studies undertaken by the Italy-based Filipino Women’s Council (FWC) on behalf of the United Nations International Research and Training Institute for the Advancement of Women (UN-INSTRAW) and the World Bank’s 2006 study on the remittance corridor between Italy and Albania.

 The Italy–Philippines Migration and Remittance Corridor Background of the Study 1. Baseline Survey and Sampling for Italy-based Filipinos

The survey took samples from the population of OFs based in Italy who regularly remit money to the Philippines. Some of these respondents were surveyed during one of their visits to the Philippines. Non-probability sampling was used in different Philippine and Italian regions, provinces, cities and municipalities identified to have a large population of migrants. In the provinces, these areas included the National Capital Region (NCR), Region 3 (Pampanga and Tarlac) and Region 4 (Laguna, Batangas and Mindoro Oriental). In Italy, sampling was conducted in the cities of Rome and Milan. Table 1 indicates the specific locations where the surveys were conducted, as well as details on sample sizes. The survey was notably able to involve unauthorized migrants who have no work permits. These migrants made up 6 per cent of the survey participants.

Table 1: Italy-based Filipino remitter survey locations

Survey location No. of respondents Philippines 95 Batangas 43 Oriental Mindoro 21 Tarlac 13 Laguna 10 Metro Manila 7 Others 1 Italy 273 Rome 254 Milan 11 Other Areas 8 Total 368

The survey inquiry collected information about: i) the demographics and profile of the migrant remitters including age, gender, educational attainment, occupation, immigration status, length of stay in Italy and their migration history; ii) the amount and frequency of remittances; iii) direct and indirect remittance transaction costs; iv) the remittance method the migrants prefer and what they currently use; and v) what sources of information these migrants use to make their financial decisions.

The survey also collected information relevant to assess migrant remittances’ impact on and further potential to support development. It inquired about: i) total household income, ii) remittance use, including expenditure patterns and saving/investment behaviour, iii) retirement plans, and iv) their philanthropic activities.

 Field interviewers and a field supervisor were briefed on a structured questionnaire that was developed and pre-tested by the research team in the Philippines. More information about the surveys may be found in Annex 2.

2. Data Analysis and Focus Group Discussions

In all, 368 Italy-based Filipinos remitters were surveyed. The surveys were encoded in Manila and Rome, and the data was processed using the Statistical Package for the Social Sciences (SPSS) data-processing programme. Validation was undertaken from March to May 2009.

Aside from the survey, five FGDs were organized. Two FGDs in the Philippines were conducted among Italy-based Filipinos visiting the provinces of Pampanga and Batangas, the places of origin of many veteran as well as new migrant workers. In Italy, three FGDs were conducted among OFs in Rome and Biella, a town near Milan. The FGDs yielded insights into the migrants’ aspirations and retirement plans. It inquired into the migrants’ awareness of development initiatives, and their participation in these or inclination to participate in such development initiatives and activities.

Then, in March 2009, several in-depth interviews were conducted among the stakeholders based in Italy, including people from government and the private sector, heads of OF groups, and media personnel.

3. Research Validation

The preliminary findings of the research were presented at the “Interregional Policy Dialogue on Remittances and Development: Harnessing the Development Potentials of Remittances (The Italy–Philippines Link)” held on 19–20 May 2009 in Rome. It was attended by 60 participants and stakeholders engaged in migration and remittance issues. Valuable comments and a list of recommended actions about leveraging remittances for Philippine development taken from the participants were incorporated into the draft of the study. 1

The Italy–Philippines Migration and Remittance Corridor C. Scope and Limitations of the Study

The following defines the scope and limitations of this study:

1. The research used market survey to collect data on the profiles and the remittance behaviour of OFs in Italy. In the attempt to obtain data on personal and household finance, researchers often encounter some degree of hesitation among respondents who may not wish to share personal information with strangers. The surveyors had this difficulty, and some survey questions were filled out less than other questions. Aside from the possibility that respondents hesitated to share information about personal and household finances, it is also possible that the respondent may simply not know the information. There were attempts at managing this difficulty by integrating several validation questions, by assisting the respondents in recalling information and by assuring them about confidentiality.

1 Proceedings of the “Rome Policy Dialogue on the Italy-Philippines Remittance Corridor,” 19–20 May 2009, Rome, Italy.

 The Italy–Philippines Migration and Remittance Corridor Background of the Study 2. The study focused on the perspective of remitters. They were discovered to be the primary decision makers about how remittances are saved or invested. Accordingly, the inquiries revealed the methods, volume and regularity with which remittances are sent. The inquiries also showed how funds are managed by the migrants or family members back home. However, the study could only provide limited information regarding the type of expenses the remittances are used for.

3. Several of the survey findings on the economic behaviour of migrants require that they be placed within the cultural, social and economic contexts of the Philippines and Italy. While there were some attempts at this, the study was not able to do so in depth. Further contextualization is recommended.

4. While efforts were taken to ensure the representativeness of the samples through various survey techniques and methodologies, a sample size of 368 respondents may not fully reflect the characteristics and remittance behaviour of Filipino migrants in Italy. It is important to note that random sampling techniques were successful in including unauthorized or undocumented workers. Caregivers and domestic workers who live with their employers were also given a voice by the surveys conducted during their holidays in Italy.

5. The recommendations discussed in this report are based on the findings of the survey and the insights and information gleaned from other sources such as, but not limited to, a review of related literature, interviews with key informants, the Policy Dialogues, and FGDs.

 II. The Context of Migration in Italy and the Filipino Migrant

A. The Italian Context

1. Demographics of the migrant population in Italy

According to the statistical agency of Italy, the Istituto Nazionale di Statistica (2009), there were 3,891,295 foreigners in Italy as of 1 January 2009. Romanians, Albanians and Moroccans make up the three largest ethnic groups in Italy. Filipinos, in terms of total number, comprise about 113,686, making them the sixth largest migrant group in Italy (see Table 2). ISTAT defines foreign populations as “foreign- born” and those who are not Italian citizens. ISTAT data only captures legal and documented migrants and foreign populations.

Table 2: Top 16 foreign populations in Italy (male and female, as of 1 January 2009)

Total Males for every 100 females Survey location 3,891,295 96.8 Romania 796,477 88.2 Albania 441,396 121.2 Morocco 403,592 137.6 People’s Republic of China 170,265 109.1 Ukraine 153,998 25.2 Philippines 113,686 72.0 Tunisia 100,112 178.6 Poland 99,389 42.8 India 91,885 144.7

The Italy–Philippines Migration and Remittance Corridor Republic of Moldova 89,424 50.5 Former Yugoslav Republic of Macedonia 89,066 132.7 (except former Yugoslavia) Ecuador 80,070 68.5 Peru 77,629 66.1 Egypt 74,599 230.0 Sri Lanka 68,738 124.7 Senegal 67,510 369.3 Total for the 16 countries 2,917,806 99.1

Source: ISTAT, 2009.

 The Italy–Philippines Migration and Remittance Corridor The Context of Migration in Italy & and the Filipino Migrant In terms of the geographical presence of migrant communities in Italy, ISTAT data also reveals that Filipinos are concentrated in Milan (28,735) and Rome (25,323). Within the Filipino community, 79.6 per cent live in capital communities (capaluoghi), while 20.4 per cent are in other communities (altri comuni) (refer to Table 3) By region of residence, most Filipinos are found in the Lombardia and Lazio regions (see Figure 1).

Table 3: Distribution of the Filipino migrant population in Italy, by capital cities and other communities

Philippines 113,686 % living in capital cities 79.6 % living in other communities 20.4 Milan 28,735 Rome 25,323 Bologna 4,068 Florence 3,668 Turin 2,713

Source: ISTAT, 2009.

Figure 1: Concentration of Filipino migrants in Italy2

2 The map is from www.mapsoftheworld.com.

 Non-national workers in Italy now represent 5.9 per cent of the country’s labour force. They generally occupy the low-skilled jobs despite high educational levels that are comparable to Italian workers (ISTAT, 2009, cited in Giaconne, 2009). Some 85 per cent of migrant workers are employees and not employers; this figure increases to 87.7 per cent among women.

Migrant workers are mostly employed in small companies, just over half of which (52.3%) are companies with fewer than 10 employees. Only 16.9 per cent of non-national workers are working in companies with more than 50 employees. Non-national men are found in manufacturing and construction (29.2% and 27.5%, respectively). Women are predominantly found in the services sector (82.7%), especially in activities of households (41%). These women in households account for 32.1 per cent of the total non-national labour force (see Table 4).

Table 4: Employed persons in economic sectors, 2006 (by nationality and sector, %)

Non-nationals Nationals Non-nationals as % of total labour force Men Women Total Men Women Total Men Women Total Agriculture 4.9 2.2 3.9 4.9 3.4 4.3 6.1 3.7 5.3 Manufacturing 29.2 14.7 23.7 25.7 15.7 21.8 6.8 5.3 6.4 Construction 27.5 0.4 17.2 12.0 1.1 7.7 12.8 2.4 12.2 Services 38.4 82.7 55.2 57.5 79.7 66.2 4.1 5.9 4.9 - wholesale and retail trade 10.8 7.6 9.6 15.5 16.0 15.7 4.2 2.8 3.7 - hotels and restaurants 7.3 11.7 9.0 3.9 5.7 4.6 10.8 10.9 10.9 - activities of households 5.1 41.0 18.7 1.0 5.2 2.7 23.6 32.1 30.3 Total ------6.0 5.7 5.9

Source: ISTAT, 2009.

2. Salient features of present immigration laws in Italy The Italy–Philippines Migration and Remittance Corridor

The following sections provide summaries of the key features of the Bossi-Fini law, which currently stands as the centrepiece framework of Italian migration management. While the Italian immigration system has evolved over the years to address a number of migration needs and challenges, some have observed that the country continues to grapple with serious challenges in managing migration.

Foreign labour quota system. The Ministry of Interior annually releases the decreto flussi(immigration quotas decree) that lists down the number of workers that the country needs, and the countries where these workers will be sourced. There are both country-based and occupation-based quota systems. Some slots are reserved for workers coming from countries that signed “cooperation” or “repatriation” bilateral agreements. 3 The countries are chosen based on Italy’s knowledge of the number of migrants

3 Some 44,600 jobs/workers are reserved to countries that have cooperation or bilateral agreements with Italy. The positions include those already presented last year that remained unfilled. Ugo Melchiondia, IOM Rome, key informant interview.

 The Italy–Philippines Migration and Remittance Corridor The Context of Migration in Italy & and the Filipino Migrant (regular and irregular) that come to the country, as well as its diplomatic relations with the sending countries.4 Occupation-based quotas were determined based on applications put forward to the Italian interior and labour ministries by employers.

The visas given under the quota system include those employee visas (or what Italian immigration law refers to as a “subordinate” visa), which can be seasonal, regular or for long periods of time, and the “self-employed” visa. Under certain conditions, the validity of a visa for a fixed period can be extended – when a foreign worker has been in Italy for at least five years, he or she may apply for a permit to stay within an indefinite though finite period.

The country-based quota system that now covers 16 countries has become a regular feature in Italian planning and management of migration inflows, requests from employers for foreign workers, making the quota system difficult to manage. In the 2008 decreto flussi (see Table 5), there were over 700,000 applications submitted for merely 150,000 slots set by the quota.

Family reunification. Family reunification is permitted by law when the foreigner residing in Italy possesses a residence permit that is valid for at least a year. Foreigners who are in the country for work, study, asylum, humanitarian protection, religious reasons or family reasons may also apply for “family reunification.” From all indications, Italy, in general, has a liberal family reunification policy.

Integration. The integration of migrants falls under the responsibility of the Ministry of Interior. The country’s integration programmes are coordinated through the local integration councils in Italy’s 103 provinces. These local integration councils also handle cases of irregular migration.

Devolution of migration management. It is noteworthy that the national government has devolved administrative and legislative powers concerning immigration to its different regions. A semblance of migration and development programmes between Italy and other countries is visible at the regional level. The Italian approach to integrating migration and development is prominent at the level of local governance in regions, provinces and municipalities and through international cooperation projects implemented by Italian non-governmental organizations (NGOs) such as the Cariplo Foundation, Gruppo Volontariato Civile, and Centro Studi di Politica Internazionale (CeSPI).5 These projects cover areas such as: the mobilization of economic and productive networks involving the country of origin and destination, recruitment of workers, assistance for the compulsory return of migrants and vulnerable categories of workers, community development projects, and channelling and promoting remittance-based investments (Gallina, 2007).

4 From an interview with Ateneo de Manila University. 5 There is an observation, however, that migrant associations in Italy have not established sufficient levels of trust with Italian NGOs in the implementation of these community development projects. Italian NGOs are also regarded as competitors. The situation leads to a lack of collaboration between migrant associations and Italian NGOs.

 - - - 1 00 29.7 4,500 1 ,000 3,000 8,000 1 ,000 6,500 4,500 5,000 1 ,000 3,500 4,000 1 ,500 1 ,000 2008 44,600 1 50,000 - 1 00 500 28.0 4,500 1 ,000 3,000 8,000 1 ,000 6,500 4,500 5,000 1 ,000 3,500 4,000 2,500 1 ,500 1 ,000 47,600 2007 1 70,000 - - 500 1 00 56.4 4,500 3,000 7,000 1 ,000 5,000 4,000 1 ,500 1 ,000 3,000 3,000 3,500 1 ,400 2006 208,500 370,000 1 70,000 - 700 200 1 00 56. 1 3,000 1 ,500 2,000 2,000 2,500 2,000 1 ,000 1 ,500 3,000 1 ,500 2005 79,500 1 00,500 1 79,000 - - - - - 400 48.8 3,000 2,500 2,000 1 ,000 3,000 2,500 1 ,500 1 ,500 1 ,500 1 ,500 2004 36,000 56,400 11 5,500 ------4.8 300 300 200 500 200 500 600 200 1 ,000 3,800 2003 79,500 ------500 500 1 7.6 3,000 2,000 2,000 4,000 1 ,000 1 ,000 2002 79,500 1 4,000 ------500 78.9 6,000 3,000 4,000 1 ,500 2001 1 5,000 1 9,000 ------2 1 .7 6,000 3,000 3,000 6,000 2000 83,000 1 8,000 ------1 0.3 3,000 1 ,500 6,000 1 ,500 1999 58,000 ------1 0.3 3,000 1 ,500 6,000 1 ,500 1998 58,000 ------The Italy–Philippines Migration and Remittance Corridor 1997 20,000 ------1996 23,000 ------1995 25,000 contingent within the yearly allocations preferential country-based quotas in Italy by worker Immigrant : Sciortino, 2009, citing various sources. citing various 2009, Sciortino, : : For 2002, 2004 and 2007, seasonal permits were included according to country-based to criteria. included according seasonal permits were 2004 and 2007, 2002, For : Albania Algeria Bangladesh Egypt Ghana Republic of Moldova Morocco EU MemberNew States Nigeria Pakistan Philippines Senegal Somalia Sri Lanka Tunisia along the be allocated To America Latin from groups Co-ethnic country-based allocations Total slots estimated Total % country-based slots on total 5: Table Source Note

10 The Italy–Philippines Migration and Remittance Corridor B. Profile of Filipinos in Italy The Context of Migration in Italy & and the Filipino Migrant

The first recorded wave of migration to Italy by Filipino labour was in 1977, following an agreement between the two governments for Italy’s importation of Filipino domestic workers. Some of these workers were direct hires with proper working contracts approved by the labour ministries of the two countries. There was ease in going to Italy then, such that Filipinos who arrived as tourists stayed on, and were able to find work as domestic workers, albeit without the proper documentation. Italian missionaries in the Philippines also facilitated the arrival of the first Filipino migrants in Italy, while a social network of Filipinos to refer and place domestic workers developed informally (Basa and dela Rosa, 2004).

1. Recording Available Migration Data about Filipinos in Italy

The Philippine government estimates that in 2007, there were some 8.7 million documented and undocumented Filipinos working and/or residing in 239 countries and territories (IMDI, 2008). This figure included 82,594 temporary migrants, 24,598 permanent migrants, and an estimated 13,000 undocumented Filipinos in Italy. Some temporary migrants have become permanent residents of Italy. According to ISTAT data, cited in the OECD’s migration statistics databank (2009), as a whole, only 1,382 Filipinos have acquired Italian citizenship from 1996 to 2004.

ISTAT puts the number of documented Filipinos in Italy at 113,686, broken down into 66,080 women (58%) and 47,606 men (42%) (ISTAT, 2009). It should be noted that ISTAT’s total number of documented Filipinos include those in possession of valid residence and working permits and who are not Italian citizens. 6

Occupations of Filipino workers. A 15-year dataset (1993 to 2007) on the occupations of overseas workers deployed to Italy showed there were 15,829 new land-based hires, of which some 11,379 slots were reserved for females.

The POEA, the government agency in charge of processing and documenting the Filipinos hired or recruited for overseas work, categorized a large majority of the newly deployed workers to Italy (91%) as “service workers” (notably, domestic workers), that is, 10,692 females and 3,667 males ( see Table 6).

6 Discrepancies in the data by the origin country and the receiving country are expected. For one, origin and receiving countries use different concepts, though all may be referring to migrants. For another, Philippine government data includes those who used the services of the Philippine embassies and consulates, which then adds to the host country’s data on Filipino nationals (Opiniano, 2007). For further reading, see: Salvatorre Favazza and Maria Pia (2006) on measuring foreign population and immi-gration in Italy and Opiniano (2007) on international migration statistics in the Philippines.

11 Table 6: Total number of newly deployed workers in Italy (from 1993 to 2007)

Major skill group Male Female Not stated Total Administrative and managerial workers 2 1 0 3 Agricultural, animal husbandry and forestry workers, fishermen and hunters 14 11 0 25 Clerical and related workers 36 26 0 62 Production and related workers, transport equipment operators 344 97 0 441 Professional, technical and related workers 27 56 0 83 Sales workers 14 14 0 28 Service workers 3,667 10,692 4 14,363 Not stated 340 482 2 824 Total 4,444 11,379 6 15,829

Source: POEA. Note: Data processed by the University of Santo Tomas Social Research Center.

POEA’s data above validate ISTAT’s 2008 data that many Filipinos are in family care services or household domestic work. Some 18,000 Filipinos are in family care services; about 9,000, in trading; and 8,000 in hotels and restaurants. Compared to ISTAT data, POEA data only captures a part of total Filipino population in Italy, in particular service workers. What needs to be further clarified is the scant numbers of male service workers recorded in POEA data, compared to ISTAT data where male Filipinos represent about 42 per cent of total Filipino migrant population in Italy. While it is possible that males have migrated to Italy via temporary or permanent family unification schemes, which do not require registration with POEA, this is not entirely certain and should be the proper subject for further research.

Data from the Italian Ministry of Interior showed that the Italian government has awarded 83,589

The Italy–Philippines Migration and Remittance Corridor residence permits to Filipino nationals (as of 2007). More than 65,000 of these permits were for work reasons, and Filipinos comprise the fifth biggest group of grantees of residence permits among the ethnic groups (Italian Ministry of Interior, 2008). According to the CFO (2009), the Philippine government agency monitoring and providing services surrounding the emigration of Filipinos on the strength of permanent migration or immigrant’s visas, only 8,628 reported their migration to Italy over a 28-year period (1980 to 2007), and have reported to the agency their plans of migrating to Italy. It is possible that the majority of Filipinos, including those who registered with the POEA, obtained their permanent residence after they arrived or lived in Italy, and not before they departed the Philippines. After staying legally in Italy for at least five years, these foreign workers may apply for residence permits for an indefinite period.

2. Issues and Challenges in Philippines–Italy Migration

Irregular migration and amnesty. Filipinos are able to enter Italy through legal means, such as family reunification, or under a quota. Filipinos can also avail of the EC’s long-term residence permit (ex carta

12 The Italy–Philippines Migration and Remittance Corridor The Context of Migration in Italy & and the Filipino Migrant di soggiorno) that will allow them to reside in Italy and re-enter the country, to perform any kind of job (except those reserved for Italians) and access social security and assistance, education, health, among others (Basa from Ribas, 2008 ). However, there are still a number of Filipinos who initially enter Italy through tourist visas and eventually join the ranks of the undocumented workers. This pattern of irregular entry has also been observed among other nationality groups working in Italy such as Indians and Bangladeshis.

There are various other ways by which Filipinos migrate irregularly to Italy and to other EU Member States. For instance, there is anecdotal evidence indicating that a number of Filipino domestic helpers brought along by their Arab employers for a vacation in Europe succumb to the temptation of abandoning their employment in favour of irregular stay in Italy or Europe with the help of other Filipinos.

The CFO does not have any available information on human trafficking or smuggling activity involving Italy. Meanwhile, there are some reported cases of Filipinos being recruited for fictitious work in EU countries including Italy, with the aid of illegal recruiters – Filipino and Chinese – using fake passports and visas. A 2006 advisory from the POEA reported that some Filipinos in were lured into paying HKD 25,000 to HKD 40,000 (or USD 3,214.83 to USD 5,143.73) for their plane tickets and for processing tourist visas for Italy (POEA, 2006a).

Migrant workers who are in Italy without the proper work documentation are ineligible for basic social services and often find themselves in vulnerable and exploitative work conditions. They cannot access formal financial, banking or remittance services because of the inability to present formal work documents, or for fear of disclosing their undocumented status. This sector has no choice but to send money home through informal channels and, as the survey showed, keep their earnings at their residences or carry money personally wherever they go. It is expected that these irregular workers will persevere in such status in the hope of obtaining amnesty in the future.

A significant number of undocumented Filipinos in Italy have availed of the amnesty and regularization programmes offered by the Italian government. The last amnesty was in 2002, when 646,829 foreigners were granted permits – including 9,821 Filipinos. Among regularized migrants who are in domestic work, Filipinos (89% of regularized undocumented domestic workers) are the biggest ethnic group (Carfagna et al., 2008). From June to September 2009, the Italian government accepted amnesty applications from irregular foreign workers (Buenafe, 2009).

Integration and occupational mobility of Filipinos. There are programmes and procedures available to foreigners who wish to upgrade their credentials to qualify themselves for higher occupations. Among these are advanced professional training programmes administered by the regions.7 Legal recognition of academic qualifications through an application with the appropriate university or educational institutions, which must issue decisions within prescribed periods, or recognition of professional titles such as nurses, doctors, teachers, lawyers, accountants, biologists, consultants, and various other expertise may be obtained through applications filed with the different ministries. The

7 Agenzia Nazionale per lo Sviluppo del’ Autonomia Scolastica, 2003.

13 basic requirements are a high level of knowledge of the Italian language, and a valid permit to stay, aside from educational credentials and other requirements. Scholarships and grants are also available to those wishing to pursue higher studies.8 Some of the key informants suggested that Filipinos are not benefiting from such programmes, as a good number of Filipinos are juggling multiple jobs to augment their incomes to support the family’s immediate needs or pay for various financial obligations, leaving no time for upgrading their skills.

Filipino migrants often do not have time for self-improvement because of their multiple work engagements. In the words of Cristina Liamzon, a Filipino advocate for socio-economic empowerment, Filipino migrant workers “lack the confidence or mindset for self-improvement, in availing of language and training programmes, or even educational grants, particularly those offered by city or provincial authorities.” 9 This stresses the need for more initiatives in capability building and raising awareness of opportunities for the Filipino community. As many of these workers are focused on increasing their incomes through hired work, and few are self-employed, the Filipinos as a group miss out on the numerous entrepreneurship programmes promoted by the Italian government. 10

Whether due to the pressure to provide for the family’s needs or to cultural inhibition, a good number of Filipino workers prefer earning a stable income by taking more than one domestic or caregiving job. Doing so enables them to send more remittances and/or increase their savings. This is preferable to upgrading their skills or handling a business that does not offer prospects of financial gains in the short term. As the survey for this research reveals, many depend on a stable high income to pay for investments, house amortizations, insurance premiums and loans in the Philippines.

Those who advocate that in the long term, it would be beneficial for migrant workers to take advantage of such training courses (which reportedly are in abundance) may perhaps highlight stories of migrants who successfully made the leap from domestic to professional or self-employed status. It is also possible that there could be cultural barriers involved, since such training courses are reportedly provided by Italian agencies in Italian language. It may therefore be worth studying by the Philippine NGOs in Italy that they initiate the conduct of such training courses in the embassy or Filipino church grounds. A vehicle to do this might be the Filipino Workers Resource Center (FWRC), whose successful FWRC skills The Italy–Philippines Migration and Remittance Corridor training in Kuala Lumpur can be replicated in Rome and/or Milan, where there are none at present.

Filipino youths in Italy. The family reunification policies of Italy have provided for Italy-based Filipinos a remedial solution of sorts to address issues relating to the prolonged absence of their loved ones, as well as expanding their household’s income base. The outcome of the family reunification, however, appeared to be a little rather more complex. For one, there are concerns that Filipino youths in Italy face immense challenges, including cultural adjustment and acculturation. Some are seen engaged in socially destructive behaviour such as juvenile delinquency and drug abuse, particularly among Filipino youths whose move to Italy was decided by their parents. Given this opportunity to join their parents, there are also documented cases of children not finishing their schooling in the Philippines to join their parents in Italy and become domestic workers (Añonuevo & and Añonuevo, 2002).

8 Italy Ministry of Labour, Health and Social Policies-Directorate General for Immigration, 2008. 9 From an interview with OFSPES. 10 Proceedings of the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor,” 19-20 May 2009, Rome, Italy.

14 The Italy–Philippines Migration and Remittance Corridor The Context of Migration in Italy & and the Filipino Migrant In another survey of 99 Filipino youths and 101 parents and NGO workers in Rome (Liamzon, 2007), it was found that:

• Filipino youths in school face serious social and academic problems, given their lack of Italian language skills that hinders them from making friends; and

• Filipino parents admit to difficulty in dealing with the struggles their children face in integrating into Italian society, especially in circumstances where many parents have the desire to work extra hours to augment the family income. 11 Children (especially those aged below 18 years old) complain of lack of family time, and of the decision of their parents to have them come to Italy.

While documentation on the Filipino minor population is not available, the issues that face the youth are worthy of consideration, as many of them appear to have been forced to move to Italy in order to contribute to the family income. Their inclusion in programmes on the productive use of remittances might be considered as early as possible, although psychosocial counselling appears also to be a paramount need. In the long term, the real cause for concern regarding migrant Filipino minors is the emergence of a generation of OFs in Italy that pose new challenges to:

• both the sending and receiving governments in terms of the demand for the smooth integration of the young migrants transplanted in a new country; • OFs who have to cope with their socially and culturally challenged youth; • the Philippine government that must prepare for the future reintegration of Italy-based Filipinos that may want to return to the Philippines upon retirement or old age.

The global economic crisis and Filipinos in Italy. Many expected the global economic crisis that began in 2008 to affect migrants in various ways. The impacts, as mentioned by IOM (2009), include:

• restrictions on new admissions of migrant workers and non-renewal of work permits; • job losses, wage reductions, ineligibility of newly arrived migrants for social benefits; • racism and xenophobia; • return migration of displaced migrant workers; • diminished remittance volumes for countries; • increased irregular migration; and • specific gender issues, e.g. which gender was more affected by job attrition.

The admission of new migrant workers was heavily restricted in Italy. For the first time, in 2009, no quotas were provided for new workers except for 80,000 slots for non-EU seasonal workers. A report by the OECD (2009) states that Italy may see its employers abandoning applications for immigrant

11 Cristina Liamzon (in Hogsholm, ed., 2007) offered a set of recommendations to address the problems of Filipino youths in Italy. The recommendations covered areas such as values formation for youths and parents, career advice and preparation, language proficiency and cultural orientation, arts and sports development, and education on sexuality, health and drug use. At the same time, Ms. Liamzon says that Church-based Filipino organizations, numbering about 45, have confirmed that young Filipinos are unable to integrate well in Italian schools, particularly those that did not start studying in the Italian school system at an early age. Cristina Liamzon, key informant interview.

15 workers. Last year, about 10,000 employers withdrew requests for immigrant workers. However, it seems that demand for domestic workers remains significant in Italy and elsewhere despite the downturn. Most (at least two thirds) of the 2008 quota for foreign workers – and the entire quota for entries in 2009 – are reserved for domestic and personal care workers (OECD, 2009). Although the trends do not portend a doom scenario for Filipino workers in Italy (including domestic workers), the Filipinos’ economic survival and better management of resources remain urgent needs. The Italy–Philippines Migration and Remittance Corridor

16 The Italy–Philippines Migration and Remittance Corridor III. The Remittance Environment in Italy and in the Philippines The Remittance Environment in Italy and the Philippines

A. Overview of the Italy–Philippines Remittance Corridor

• According to the BSP, the Philippines’ central bank, a total of USD 678.5 million was recorded as workers’ remittances in 2008. Meanwhile, the total cumulative remittance received by the Philippines from Italy for the period 2000 to 2008 amounted to USD 3.647 billion. For the past years, remittances from sea-based workers have dwindled while those of land-based workers rose steadily, contributing to the overall rise in remittance flows to the Philippines from Italy (see Table 7).

• BdI, the BSP’s Italian counterpart, records the remittances going out of Italy. The latest record shows that EUR 727.9 million worth of remittance was sent to the Philippines in 2007. Filipinos are the third biggest remitter group, based on the latest cumulative totals (EUR 1.746 billion from 2004 to 2007), after the Chinese and the Romanians (see Table 8).

Table 7: Remittances from Filipinos in Italy (USD thousands)

in USD thousands 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Total 160,787 83,409 324,539 309,807 449,289 430,071 574,662 635,944 678,539 521,297 * Land-based 160,649 82,752 323,442 306,868 408,517 407,482 551,659 619,439 660,122 515,504 * Sea-based 138 657 1,097 2,939 40,772 22,589 23,003 16,505 18,417 5,793

Source: BSP.

17 62,620 37,848 55,242 70,755 73,235 77,432 93,60 1 1 7,890 90,2 1 8 1 8,59 68,59 1 40,64 1 30,803 33,477 (as of 2007) 625,278 1 05,675 365,908 40 1 ,949 1 32,7 8 1 56,5 9 population Migrant 764,534 483,592 502,053 258,036 344,852 426,95 1 302, 1 68 328,503 277,959 406, 11 7 24 1 ,099 322,379 1 84,385 1 42,779 1 3 , 89 1 64,779 3,764,702 2,590, 1 56 1 ,746,366 1 ,096,407 4,0 1 4,648 2007 2004 to 1 5,872,803 1 7, 79,433 remittances total 2007 92,720 73,986 68,68 1 54,567 48,446 47,7 11 43,503 8 1 8,034 789,597 727,930 339,4 11 252,278 1 52,765 1 43,660 1 43,072 1 27,896 1 25,748 1 03,064 1 02,056 1 0 ,052 1 ,687,533 5,225,676 6,043,7 1 0 90,064 70,504 94,620 72,042 89, 1 45 53,963 30,507 33,64 1 47,222 2006 700,502 792,525 5 1 9,899 294,807 207,859 1 5 ,00 1 38,576 1 08,099 11 2,630 1 32,287 1 0 ,680 687,257 4,528,830 3,84 1 ,573 5,398 63,820 94,077 63,049 70, 1 44 55,78 1 57,8 11 89,078 46,063 32,996 25,952 40,707 2005 64 1 ,557 947,533 652,536 245,424 244,02 1 1 57,37 1 0 ,00 11 9, 4 1 47,356 3,259,232 3,900,789 The Italy–Philippines Migration and Remittance Corridor 1 ,467 78,825 40,506 74,839 34,375 66,239 50,622 7 1 ,42 37,260 75,475 29,792 30,830 23,885 33,347 2004 429, 1 34 355,498 253, 11 3 2 1 8, 68 1 47,026 553,579 1 00,703 2,706, 1 04 2, 1 52,525 (in thousand euro) of origin their countries to immigrants Italy’s by Remittances : BdI : to 2003 was 2003 was 200 1 to from Data which includes reports MTOs. from remittances, of the BdI in computing the new formula from comes data This : China Romania Philippines Morocco Senegal Brazil Albania Bangladesh Peru Ecuador India Ukraine Tunisia Colombia Poland Dominican Republic Republic of Moldova Nigeria France Bulgaria 20 countries of top Total Other countries Total 8: Table Source Note in Italian 2000 was the year priorlira. while data to reports, did not include MTO that using the old format generated

18 The Italy–Philippines Migration and Remittance Corridor The remittance data of BSP and BdI show slightly different figures. Technical investigations should be The Remittance Environment in Italy and the Philippines made to address the data discrepancies.

1. In general, central banks have different methods of recording remittances, including potential data distortions in each other’s systems. For instance, Bdl acknowledged that there have been geographical distortions (i.e. data variances from the Italian provinces and regions where BdI sources its reports) arising from unique clearing systems of non-bank MTOs and the high remittance reporting thresholds that failed to capture the small amounts.

2. Since it was only in 2006 that MTOs were required by the BdI to report remittance transactions, and given that MTOs were the channel most frequently used by migrants, it is likely that Italian remittance data failed to reflect MTO transfers prior to 2006. By contrast, the BSP, even before 2006, captured Filipino remittances sent through the six Filipino banks operating in Italy as MTOs.

3. The BSP reflects Filipino seafarers’ remittance data by recording 80 per cent of seafarers’ salaries that is remitted directly to their allottees. The BdI does not have this data and therefore may not include Philippine-and Italy-sourced Filipino seafarers’ remittances.12

4. BSP gets its reports on remittances from Philippine banks, and it might have missed out on reports from foreign banks. B. Remittance Policy and Market Environment in Italy

Italy became a remittance provider in 1988 (Gaggi, 2006). The country itself still receives considerable amounts of remittances from Italians abroad (USD 2.6 billion in 2007) (World Bank, 2008b). Since 2004, when BdI, the Italian central banking authority, started recording migrants’ remittances in euro, the migrants in Italy have sent home EUR 17.179 billion to their countries of origin. According to the BSP, Chinese, Romanians and Filipinos are the top three migrant remitters from Italy.

1. Informality of Remittance Channels

There are many observations of how migrants are able to send money home, which depends usually on nationality, and a host of other factors, among them: whether or not they possess proper migrant or work documentation; cultural practices; accessibility of banking or other authorized channels both in Italy and origin countries; the capacity of money service providers to offer innovations that adapt to migrant’s needs; and the level of development of the banking and financial sector of the migrant’s home country. These factors are best illustrated by a 2006 study by the World Bank on the Italy–Albania remittance corridor (Hernandez-Coss et al., 2006) that showed the predominance of informal remittances where the physical transfer of cash was the most popular method for Albanian migrant workers sending money to their home country. In the same study, the Albanian central bank

12 Ortolani (2006) explains that MTOs are asked to record all their remittance transactions and submit reports to BdI. Data from MTOs is therefore appended to existing data reported by banks. Data is transmitted bimonthly but are disaggregated with monthly figures. As for remittance outflows, data is broken down by the Italian province of residence of the sender and country of destination of the recipient.

19 describes the corridor as 60 per cent informal and 40 per cent formal, with MTOs such as Western Union capturing 80 per cent of the formal channel. Commercial banks have had limited involvement in remittances, a situation that has been attributed to: the lack of access to banking services by Albanian senders in Italy as well as by recipients in Albania, a possible lack of trust in the Italian banking system, limited numbers of remittance banking products, high costs of sending money, and the presence of a black market for foreign exchange (Hernandez-Coss et al., 2006). While some Italian banks have begun offering pre-paid cards for sending money home, the Albanian post office has a limited platform to receive monies from Albanians in Italy.

2. The Banking and Remittance Regulatory Environment

Bdl acts as the main body responsible for regulating remittances in Italy, which includes operations of all institutions engaged in remittance operations.

Remittance transfers are made through registered and non-registered agents. The former includes banks, MTOs and post offices, while the latter involves cash transport and informal networks, among others. Although a comprehensive picture of the market share of these remittance channels is not available in Italy at present, MTOs are frequently used channels. Italy has around 30 non-bank firms authorized to engage in remittances. The five MTOs, which were the first to be authorized, cover 74 per cent of total remittance outflows in 2005.13

Given the growing number of migrants in Italy, BdI, the Ministry of Foreign Affairs (Ministero degli Affari Esteri), and the Ufficio Italiano dei Cambi (UIC) developed a National Action Plan (NAP) on remittances in 2004. The NAP covers three areas (Novello, 2008):

Attracting migrants’ remittances to official financial channels. Having been engaged by the BdI to take initiatives in enhancing the efficiency of Italy’s remittance environment, the Italian Banking Association (Associazione Bancaira Italiana, ABI) responded, first by conducting surveys on migrants and Italian banks (see Text Box 1). Aside from this, the BdI has been working on: The Italy–Philippines Migration and Remittance Corridor • forging agreements with local associations entrusted with receiving and integrating immigrants; • developing banking relations specifically addressed to immigrants and providing a core set of simple services; • developing user-oriented communication strategies to immigrants using their national language; and • further developing electronic payment systems. BdI has also promoted competition for players to improve their pricing of remittances and develop innovative remittance instruments that exploit well-established, low-cost and easily accessible telecommunication networks, e.g. payment cards, mobile phone, Internet.

13 Unfortunately, the names of the MTOs were not mentioned in the report of Associazione Bancara Italia and BdI (2008).

20 The Italy–Philippines Migration and Remittance Corridor The Remittance Environment in Italy and the Philippines Addressing statistical issues. The BdI has been expanding its monitoring activities of money transfer providers while also trying to improve its own statistical system regarding remittances. The BdI has been reassessing the way it records remittances given certain geographical distortions brought about by factors such as the unique clearing systems of international MTOs, i.e. non-banks, and improving the capture of small remittance amounts that do not get reported due to high remittance amount thresholds that renders the report of these small amounts negligible.14 The BdI has also been examining transactions involving MTOs since these are “clearly the channels most frequently used by immigrants” (Guiseppe Ortolani, 2006). The BdI has also adopted a new reporting format for remittances, making it mandatory for MTOs to report remittance transactions.15

3. Anti-Money Laundering Law and Other Security Measures

The main authorities responsible for enforcing the Italian AML/CFT (Anti-Money Laundering/ Combatting the Financing of Terrorism) Law on remittances are the UIC (Italian Foreign Exchange Office)16 and the Guardia di Finanza (GdF). The UIC acts as the Italian Financial Intelligence Unit (FIU). It reports, monitors and analyses suspicious transactions. The Special Currency Police Unit of the GdF is an enforcement agency with primary jurisdiction for conducting financial investigations. It monitors companies that are involved in money transfers.

For money transfer operations from Italy to other countries, there is a reporting threshold under the Italian AML law for amounts of EUR 12,500 (USD 15,383) and above. This means that only customers that perform transactions exceeding EUR 12,500 have to be identified. Some operators, however, impose internal identification threshold of zero, which also allows them to send the originator information with the transaction. Other operators require identification for transfers exceeding EUR 3,100.

In Italy, there is no specific provision in the AML law requiring identification and verification of identity. However, in practice, banks ask migrant workers to present valid documents.

14 From interviews with Banca d’ Italia. 15 Ortolani (2006) explains that MTOs are asked to record all their remittance transactions and submit reports to BdI. Data from MTOs thus boost the data reported by banks. Data are transmitted bimonthly but are disaggregated with monthly figures. As for remittance outflows, data is broken down by Italian province of residence of the sender and country of destination of the recipient. 16 UIC used to be an independent agency handling money laundering issues in Italy. It was integrated with Banca d’ Italia in 2008.

21 Text Box 1: Financial inclusion of immigrants in Italy

In 2008, ABI and CeSPI released the findings of a survey of the financial and insurance needs of immigrants in Italy. The focus of the study was to assess migrants’ use of Italian bank products, as well as the main factors that influence migrants’ increased use of banks, including nationality, familiarity with banks in origin country, length of stay, demands of the economic system, i.e. salary payments directly remitted to a bank account, and the nature of the migrant’s employment, e.g. permanent, contractual, and seasonal.

The Italian banking community is attempting to enhance the financial inclusion of Italy’s migrant population. The proportion of immigrants who have bank accounts and use bank services has increased over a two-year period – from 1.058 million (or 60% of non-OECD migrants) to 1.41 million (or 67%). But the link between using Italy’s banks and sending money home remains weak because majority of Italian banks do not provide remittance services for foreigners.

The findings of the survey (given to 10 immigrant groups, including Filipinos) are the following:

• There are varied levels of financial inclusion rate among surveyed nationalities in Italy: as many as 75 per cent of surveyed Ecuadorians are banked in Italy; followed by 67 per cent among Albanians; and 62 per cent among Egyptians. For Filipinos, the survey indicates that 49 per cent are banked. • Migrants’ previous familiarity with banking in the country of origin seems to play a significant role in the choice to establish a relationship with an Italian bank. For those with bank accounts in the country of origin, 68.6 per cent are banked in Italy while the rate for those without bank accounts in the origin remained at 45.5 per cent. • The length of time the migrants have stayed in Italy is the most decisive factor in the bankarization of migrants. Migrants with over 10 years of stay in Italy are more likely to be banked (74.1%) than those with five years of stay (48%) and one year of stay 1( 6%). • The reasons for not accessing banking services in Italy seem to be linked to migrants’ The Italy–Philippines Migration and Remittance Corridor inability to save and the marginal and/or illegal situation of the migrant in terms of work placement and social inclusion. Another hindrance is the prevailing perception among migrants that banks provide products and services to those with disposable income/ savings and not to those needing opportunities to start to ease the process of economic and financial inclusion. • Migrants put importance, on establishing client–bank relationships, to factors such as proximity, flexibility of opening hours, level of customer service, quality of advice and finance terms offered. But there is a strong preference among migrants to seek the specific products that meet their economic needs.

The challenge facing Italian banks is how to transform the ways they are perceived that will hopefully make them service-oriented banks and not just providers of credit and passive depositaries of savings. Nevertheless, both parties recommended intensifying migrant–Italian bank relationships. Migrants surveyed were also observed to be rational economic and financial actors and who value the costs, efficiency, and security of their relationship with Italian banks.

22 The Italy–Philippines Migration and Remittance Corridor The Remittance Environment in Italy and the Philippines C. Remittance Policy and Market Environment in the Philippines

The Philippines has a banking and financial sector that is active in the field of remittances, promoting and encouraging the shift from informal to formal channels, monitoring and regulating anti-money laundering activities, and promoting the greater financial inclusion of the public.

1. Remittances and Migration Profile for of the Philippines

According to the 2007 stock estimates of the CFO (2009a), OFs number 8.7 million globally. Some 4,133,970 are temporary migrants (i.e. whose stay overseas is temporary and bound by contracts), including some 266,553 seafarers. Filipinos who are permanent migrants or immigrant settlers abroad number 3,692,527. Meanwhile, there are 900,023 undocumented or irregular Filipinos abroad.

The POEA, which is in charge of processing and documenting temporary or contract-based migrant workers, counts some 1,236,013 who were deployed for work abroad in 2008. This figure includes some 22,623 workers deployed to Italy that year, of which 2,839 were newly hired domestic workers (POEA, 2009). The CFO, which processes the papers of departing immigrants, says that immigrants going to Italy have reached 11,033 (period covering 1981 to 2008). In 2008, a record 2,405 Filipinos registered with CFO went to Italy as immigrants (CFO, 2009b).

According to the Philippine central bank, data from 1975 to 2008 on remittances through formal banking channels show that the Philippines’ banking system received USD 136.708 billion in remittan- ces. Remittances from 2003 to 2009 alone amounted to USD 87.804 billion (see Table 9). Remittances data by source region or continent shows that the Americas have been the consistent leading source of remittances from OFs. Filipinos in Europe are the second -biggest source of remittances.

Table 9: Overseas Filipinos’ remittances, by region of origin

Region 2003 2004 2005 2006 2007 2008 2009 Total (world) 7,578,458 8,550,371 10,689,005 12,761,308 14,449,928 16,426,854 17,348,052 Asia 894,310 918,329 1,172,373 1,496,120 1,543,173 1,883,996 2,078,241 Americas 4,370,705 5,023,803 6,605,231 7,198,212 8,244,344 9,213,372 9,307,781 Oceania 44,470 42,600 54,573 85,610 121,417 149,423 212,983 Europe 1,040,562 1,286,130 1,433,933 2,061,067 2,351,704 2,658,726 3,061,625 1,166,376 1,232,069 1,417,491 1,909,208 2,172,417 2,502,639 2,665,031 Africa 11,371 3,439 4,517 10,272 16,027 17,746 22,282

Source: BSP, 2010.

23 Informal remittances. Since 2001 when the first estimates of informal remittances were done,17 the trend is that the ratio of informal remittances to total formal remittances received has diminished – from 21.89 per cent in 2001 to 3.38 per cent in 2007. The BSP, the Philippine central bank, sees this as a function of improved reporting, and of the increasing involvement by formal financial institutions in the remittance industry providing services to migrants (see Table 10).

Table 10: Overseas Filipinos’ cash remittances coursed through formal and informal channels (in USD millions)

Informal remittances as Through banks (formal Through non-banks or Global total (banks plus % of total remittances Year 1/ 2/ channels) informal channels non-banks) (banks + non-banks) 2000 6,050 - 6,050 - 2001 6,031 1,690 7,721 21.89 2002 6,886 1,721 8,607 19.99 2003 7,579 1,514 9,093 16.65 2004 8,551 1,710 10,261 16.66 2005 10,689 1,603 12,292 13.04 2006 12,761 1,276 14,037 9.09 2007 14,450 506 14,956 3.38 2008 16,426 n.a. n.a. n.a. Source: BSP, 2008. Notes: 1/ Refers to cash remittances coursed through the formal financial channels, including commercial banks, thrift banks, foreign exchange corporations, and offshore banking units. 2/ Refers to cash remittances coursed through formal and informal channels. n.a. – not available.

For the year 2000, there was no differentiation between total overseas cash remittances by Filipinos The Italy–Philippines Migration and Remittance Corridor channeled through the banking system. This period represents the transition years of the revised foreign exchange monitoring report form (FX Form 1).

Philippine regulatory environment on banking and remittances. The BSP, the Philippine central banking authority, is the primary regulator for banking and remittances. It releases rules related to the conduct of the country’s financial system, as well as enforces these regulations. Aside from this function, it has also diversified into other activities that enhance the use of formal channels as well as increase the development impact of remittances, such as financial literacy training, and establishment of regulations related to ensuring the welfare of users of remittance services. 18

17 BSP estimates informal remittances by extrapolating the results of the annual Survey on Overseas Filipinos (SOF, done by the NSO). Its main source data is the information derived on the number of overseas Filipinos who send through non-banking channels. It then tries to estimate the informal remittances based on data on formal remittances. SOF is a rider to the NSO’s fourth quarter Labour Force Survey (LFS), and asks overseas Filipino workers who were in the country from April to September. It contains demographic information about overseas Filipino workers, their remittances, and the channels used to send money home. 18 From an interview with BSP.

24 The Italy–Philippines Migration and Remittance Corridor The Remittance Environment in Italy and the Philippines Text Box 2: Financial literacy for overseas Filipinos

In a series of multisectoral national policy dialogues convened by IOM from March to April 2009, a conceptual framework emerged pointing out that financial literacy among OFWs and their households is key to harnessing the development potentials of remittances. With financial literacy, the remittances will hopefully be drawn to a productive mix of wise spending, savings and investment, to the benefit not only of the general welfare of households but also stirring community development and the growth of capital, enterprise and wealth.

During the discussions, financial literacy was interpreted to be a state of knowledge and values empowerment that can direct the migrants and their households to entrepreneurial direction and moderate the high level of consumption among migrants and households. It was recognized that while the BSP is mandated to implement a financial literacy programme, the sociocultural challenges restraining the potential of migrants and their families to save and invest has drawn the Department of Education (DepEd) to modify its school curriculum, so that it may nurture the value of saving, in parallel with the pursuit of adult learning and family capacity-building activities, among the youth.

Based on BSP’s monitoring, OF’ remittances continue to positively fuel spending in the health, education and residential real estate sectors. How much goes to micro enterprises, small and medium enterprises (SMEs), social enterprises, social insurance and pre-need investments remains unclear and the allocation for savings and investments is affected by the high level of consumption among migrants’ families. Likewise, there are practical challenges in the market such as the persuasive influence of commercial advertisements, weak investment market information, the lack of knowledge about local development plans and the inadequacy of protective regulations governing the pre-need industry. Collective remittances are likely to build capital, which are useful for development if they are channelled towards investment alternatives. However, the right to control remittances rests on the migrants and their beneficiaries; the capital that remittances generate is used mainly to support their families and cannot be made a substitute for development financing.

Migrants have a choice to be active investors as entrepreneurs or passive investors with placements in banks, financial institutions, money markets or cooperatives. They may allot part of their investment exposures in social enterprises, insurance or pre-need plans. Concern has been raised that investment portfolio-making has not been consistently pursued along these various options. Migrants find it difficult to be entrepreneurs due to risk aversion, preference for employment abroad and the lack of understanding or awareness of local investment opportunities. Changing people’s mindsets, providing market and investment information and engaging in industrial partnerships are crucial to help migrants overcome these obstacles.

Part of the migrants’ earnings is channelled towards donations, either in cash or in kind. These donations are made for social or charitable purposes, festivities and church-related programmes. Subtle guidance must be extended to migrants in relation to their philanthropic undertakings to promote alternative productive flows of donations.

The financial literacy programme must likewise be able to prevent OFs and their families from being victimized by financial scams.

Inputs from the IOM Thursday Forum Series (March to April 2009)

25 Remittance players with services in Italy. The Philippine-based banks are the major players in the remittance services market. Major banks alone operate over 1,300 branches and corresponding banks abroad, including those in Italy, provide remittance services to OFs. Major commercial banks servicing remittances are members of an industry-wide association called the Association of Bank Remittance Officers Inc. (ABROI).

In Italy, six Philippine banks have been licensed by Italian authorities to operate money transfer services in Italy. These are BDO, BPI, RCBC, Metrobank, PNB and Landbank. It is important to note that these banks (see Table 11) are not licensed as banks but as money transfer or remittance agencies.

Table 11: Global reach of remittance services by major Philippine commercial banks

Countries where Branches, subsidiaries No. of tie-ups with Banks services are present and affiliates abroad foreign banks Total BPI 23 20 430 473 Metrobank 10 29 263 302 PNB 112 5 16 133 BDO 11 6 206 223 RCBC 9 124 37 170 Land Bank 6 2 70 78 Source: BSP, 2009.

Meanwhile, Western Union continues to be the leading MTO serving Filipinos abroad. Western Union has over 6,400 agent locations across the Philippines (including commercial/thrift/rural banks, cooperatives, microfinance institutions (MFIs), pawnshops, and Western Union-operated branches). Western Union’s nearest competitor, MoneyGram (also the world’s second-biggest MTO), has 1,200 money-transfer locations (mostly the outlets of a Filipino pawnshop, M. Lhuillier Financial Services) and plans to have 900 bank locations nationwide. Aside from their wide networks, it is also obvious The Italy–Philippines Migration and Remittance Corridor that the high migrant patronage for MTO services could be attributed to their easier accessibility to migrants and recipients, longer working hours including weekends and holidays, and possibly less tedious paperwork compared to banks. MTOs offer a service focused on remittances, which are not the core business of banking institutions.

2. Remittance Transaction Costs for the Italy–Philippines Corridor

The research discovered that Filipino banks noticeably offer an identical remittance fee of EUR 8, differing only in delivery time and foreign exchange spreads. Italian banks offer remittance services to migrants, including Filipinos. A bank-to-bank transaction by an Italian bank can be as low as EUR 7, though the processing time can take longer compared to the Philippine bank agents in Italy. MTOs such as Western Union can assure remittance recipients of the remittance proceeds in real time, while they charge from EUR 7 up to EUR 20. Overall, the average remittance charge is EUR 7.47 and the exchange rate margin is EUR 0.93 so that the remitter pays a total effective cost of nearly EUR 9 (see Table 12).

26 The Italy–Philippines Migration and Remittance Corridor The Remittance Environment in Italy and the Philippines Table 12: Average costs and exchange rate margins

Costs paid (in euro) (remittance charge plus Type of channel Fee (in euro) Exchange rate margin exchange rate spread) MTO/Post office average 7.50 2.36 10.69 MTO average 7.62 1.27 9.33 Bank/MTO average 8.00 0.94 9.27 Bank average 7.18 0.24 7.49 Total average 7.47 0.93 8.73 Source: World Bank, http://remittanceprices.worldbank.org.

27 IV. Survey Findings on the Remittance Behaviour of Filipinos in Italy

This chapter presents baseline data, findings and insights on remittance behaviour and other related characteristics obtained from surveying a total of 368 Filipino remitters based in Italy (IOM–ERCOF survey hereafter).

The primary aim of the IOM–ERCOF survey was to generate representative baseline data among OFs from different occupations in Italy, data which was not available at the time the study was carried out. In particular the survey focused on the following areas which will provide vital information in understanding remittance flows in the Italy–Philippines corridor and how remittances contribute to development:

• types of remittance services Filipinos in Italy use; • Filipinos’ awareness / knowledge about remittance services; • the amount of remittances Filipinos send home; • how often remittances are sent to the Philippines; • information on the incomes, savings and investments of Filipinos in Italy; • the retirement plans of migrant Filipinos.

A detailed description of the methodology of the survey is found in Chapter I, under research and survey methodology.

The research findings also provide insights on other important variables such as gender, cultural practices, work motivations, household- related issues, financial literacy levels, issues of dependency on remittance, as well as retirement and future aspirations. They also offer empirical basis on remittance behaviour and other migrant practices that may directly or indirectly determine or influence how remittances affect recipient households and home communities. In this regard, Chapter 4 reveals possible areas and issues that could be tackled to direct remittances towards development. The Italy–Philippines Migration and Remittance Corridor A. Demographic Profiles of Surveyed Filipino Remitters

Here are some of the basic demographic profiles and characteristics of Italy-based Filipino remitters captured under the IOM–ERCOF survey.

Age and sex. The respondents’ ages range from 21 to 73 years old, with an average age of 41 years old. The most represented age bracket was that of 36 to 40 years old, which comprised 20 per cent of those surveyed. It is important to note that the respondents of the survey all remit money to the Philippines. The age distribution of the interviewees mostly fell into what are considered working ages (see Table 13). Majority of the respondents were female, comprising 75 per cent of the total respondents. This gender ratio is in line with the deployment data of the Philippines to Italy, which indicates that as many as 72 per cent of Italy-bound Filipinos are women (see Table 6.). On the other hand, ISTAT data (Table 2) indicate that the documented Filipino population in Italy has a gender ratio of 72 males for every 100 females. These differences may be due to the scope of the survey which specifically targeted

28 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey migrant remitters who are likely the main bread earners of the households.

Place of residence in Italy. Out of 368 respondents, about 70 per cent (n=257) were working and living in Rome. Sixteen per cent (n=59) were based in Milan, and the remaining 14 per cent (n=50), in other areas of Italy. Two respondents did not indicate their location in Italy. This was not surprising given the selected sampling sites as presented in Table 1 in Chapter 1.

Civil status and religion. Some 59 per cent of respondents are married while 27 per cent are single. The rest are either widows or widowers (5%) or separated (9%). An overwhelming 96 per cent of respondents are Roman Catholics. The rest of the respondents are Christians from other denominations (e.g. Protestants, Iglesia ni Kristo (Church of Christ, a Filipino-formed church), Born-Again Christians, each accounting for 2%). No Muslim respondents were identified.

Legal status. About 218 respondents (62%) have working visas. The next highest sub-group, at 21 per cent, holds long-term residence permits (ex carta di soggiorno). About six per cent of respondents, however, confided not being in possession of any work documentation (see Table 14).

Place of birth in the Philippines. Of respondents who indicated their birthplace in the Philippines, most of them came from Luzon Island — in particular the provinces of Batangas (112 respondents or 36%), Oriental Mindoro (40 respondents or 13%), and Tarlac (22 respondents or 7%). The survey was able to determine that respondents came from some 30 provinces of birth in the Philippines (excluding the National Capital Region or Metro Manila), including Laguna (5%), Pampanga (7%) and Bulacan (4%).

Table 13: Age distribution of respondents Table 14: Legal status of migrants

Age range F % Status F % 21–25 27 8 Citizen 3 1 26–30 47 14 Professional on working visa 3 1 31–35 36 10 Working visa 218 62 36–40 70 20 Tourist visa / Working on 30 9 41–45 54 16 tourist visa 46–50 43 13 Long-term residence permit 77 21 51–55 35 10 holder 56–60 18 5 Others (Undocumented 23 6 Above 60 13 4 missionary etc.) Total 343 100 Total 354 100

Source: IOM–ERCOF Survey, 2010. Source: IOM–ERCOF Survey, 2010.

Educational background. The survey reveals that nearly half of the respondents (47% or 159 respondents) have college degrees; about 22 per cent are college undergraduates (i.e. enrolled in college but have not completed their studies); and an additional 6 per cent or 21 respondents hold graduate/master degrees. Almost 75 per cent of all respondents have had some college-level education.

29 A total of 19 per cent either completed their high school education or had some high school education (see Table 15). The results reveal a large number of well-educated Filipinos in Italy. This is in line with anecdotal evidence gathered by UN-INSTRAW (Ribas, 2008) that most Filipino migrants in Italy have secondary education, if not a university diploma.

Table 15: Levels of educational attainment

No. % Vocational / Technical 10 3 Elementary graduate / Elementary level 8 3 High school graduate / High school level 67 19 College level 74 22 College graduate 159 47 Graduate / Masters 21 6 Total 339 100

Source: IOM–ERCOF Survey, 2010. Note: *The researchers refer to educational levels using the terms provided by the NSO. For example, “elementary level” means the person has not yet graduated from elementary schooling.

B. Migration History and Current Occupation

Duration of stay in Italy. Almost half of the respondents (48%) first entered Italy during the period 2000 to 2009, indicating that they have been in Italy between one and nine years. A slightly larger proportion (51%) came to Italy earlier (38% for the period 1990 to 1999, and 13% for the period 1980 to 1989). Three respondents arrived first in Italy during the period 1970 to 1979, making them part of the first wave of Filipinos to the country (see Table 16). The Italy–Philippines Migration and Remittance Corridor

Experience working in countries other than Italy. Interestingly, 40 respondents (10.9%) have been to other countries (ranging from one to six countries) before settling in Italy to work. Twelve of them worked in the Kingdom of , while six worked in China. Several respondents worked in multiple countries before coming to Italy. A number of them had been to other European countries such as France and Switzerland. This presents documented evidence of the phenomenon of “stepping- stone migration”, with Filipino migrants moving from one location to another to take advantage of better opportunities. Often, this movement is geographical mobility rather than occupational mobility of labour, where Filipinos in low-paying domestic work (for example, at the Gulf) transfer to do the same type of jobs but in higher-paying countries like Italy (see Table 17).

30 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 16: Respondents’ first year in Italy

Year No. % 1970–1979 3 1 1980–1989 46 13 1990–1999 131 38 2000–2008 165 48 Total 345 100 Source: IOM–ERCOF Survey, 2010.

Table 17: Countries of residence/work before Italy

Country F %

Kingdom of Saudi Arabia 12 23 China, Hong Kong SAR, Macao SAR 6 11 (UAE) 5 9 4 8 4 8 Switzerland 3 6 Austria, France, Jordan, Malaysia, Republic of Korea, Bahrain, United States (2 respondents each) 14 26 Egypt, Israel, Libyan Arab Jamahiriya , United Kingdom and Lebanon (1 respondent each) 5 9 Total 53 100

Source: IOM–ERCOF Survey, 2010. Note: Multiple responses from a total of 40 respondents.

Current occupation. Majority of respondents (79%) are domestic workers in Italian households. Indeed, the Italian quota system allots a large number of working permits for this particular occupation (see Table 6). Others work as caregivers (8%), office employees (4%) and hotel employees (3%). As we shall discuss in later sections, many migrants have multiple jobs and are possibly combining occupations such as domestic work and caregiving (see Table 18). As 75 per cent of all respondents have had college-level education, there are legitimate concerns about the prevalence of over- skilled and underemployed migrants in Italy, as suggested by other literature such as Ribas’ study for UN-INSTRAW (2008).

Frequency of visits to the Philippines. The survey data revealed that OFs in Italy regularly visit the Philippines. About 18 per cent of the respondents come home every year, while 27 per cent said they do so every two years. Sixty-two per cent of the respondents go home at least every three years and only 8 per cent of the respondents said they seldom go home. Those who claimed that they have not been home (11%) are those who have just recently arrived in Italy.

31 Table 18: Current occupation (multiple responses)

Occupation F % 250 79 Caregiver 24 8 Office employee 11 4 Hotel employee 9 3 Professional 9 3 Nurse / therapist 5 2 Driver 5 2 Sales staff 5 2 Factory worker 5 2 Supermarket staff 3 1 Waiter / bartender 3 1 Cook / assistant cook 3 1 Seaman / vendor / religious (at 2 respondents each) 6 2 Technician / carpenter / machine operator (1 respondent each) 3 1

Source: IOM–ERCOF Survey, 2010. Note: Twenty-four respondents indicated they have two occupations.

C. Frequency, Amounts and Beneficiaries

Frequency of remittances. Survey results indicate that migrant workers who go through the The Italy–Philippines Migration and Remittance Corridor Italy–Philippines remittance corridor regularly transfer resources every month or every other month. Nearly three fourths (72%) remit on a monthly basis, while 11 per cent remit every other month (see Table 19). About 91 per cent of the respondents send remittance home at least every quarter. The more frequent the transfer of funds, the higher the costs (remittance fees) so it was initially expected that remitters would want to reduce the number of transfers in order to save money. However, the study revealed that despite the high costs of sending money home, Filipinos still preferred to remit with frequent regularity.

32 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 19: Frequency of remittance to Table 20: Frequency of remittance, the Philippines by gender (%)

Frequency F % Frequency M F At least once a week 8 3 At least once a week 1 2 Monthly 263 72 Monthly 64 75 About every other month 41 11 About every other month 18 9 About four times a year 20 5 About four times a year 6 6 About three times a year 8 2 About three times a year 2 2 About twice a year 15 4 About twice a year 5 4 Once a year 5 1 Once a year 3 1 Less often than once a year 3 1 Less often than once a year 1 1 Total 363 100 Total 100 100

Source: IOM–ERCOF Survey, 2010. Source: IOM–ERCOF Survey, 2010.

Women are more likely to remit more often than men. Seventy-seven per cent of women send money at least once a month, compared with 65 per cent of men (see Table 20).

Amounts. The monthly average remitted from Italy to the Philippines varied significantly among the respondents even though most are in domestic work and earn similar wages. Respondents were asked to state the monetary currency of their remittance (whether in euro, Philippine pesos, or any other currency). One third (30%) of the respondents remit between EUR 100 and EUR 200 per month, while 24 per cent send between EUR 201 and EUR 300. Others send higher amounts – EUR 301 to EUR 400 (15%), and EUR 401 to EUR 500 (22%) (see Table 21). A few (9%) send more than EUR 500 per month. The peso-based amounts gathered by the research also reflect a wide range of PHP 8,001 to PHP 10,000 (EUR 128 to EUR159), to PHP 18,001 to PHP 20,000 (EUR 287 to EUR 319), and still from PHP 25,001 to PHP 30,000 (EUR 399 to EUR 478) (see Table 22). The average monthly remittance amount among the respondents was EUR 354.

This average amount of EUR 354 validates the findings of Ribas (2008) that remitters from Italy send, on average, from EUR 300 to EUR 400. Other findings of this survey, however, differ from the data of other research such as those of ABI and CeSPI, which found that one third of their Filipino respondents (34.9%) sent home EUR 201 to EUR 300 per transaction, in contrast to the IOM–ERCOF survey result of 24 per cent.

33 Table 21: Monthly amount remitted Table 22: Monthly amount remitted in euros (n=152) in pesos (n=82)

Range F % Frequency M F 100–200 46 30 3,000–5,000 3 4 201–300 36 24 5,001–8,000 4 5 301–400 22 15 8,001–10,000 13 16 401–500 34 22 10,001–12,000 4 5 501–600 6 4 12,001–15,000 12 14 601–700 3 2 15,001–18,000 3 4 701–800 0 0 18,001–20,000 14 17 801–900 5 3 20,001–25,000 9 11 Total 152 100 25,001–30,000 10 12 Source: IOM–ERCOF Survey, 2010. 30,001–40,000 7 8 40,001–50,000 3 4 Total 82 100

Source: IOM–ERCOF Survey, 2010.

Occasional remittances. Aside from their usual remittance, OFs occasionally sent money home for specific events such as Christmas, birthdays, specific emergencies, etc. Ribas (2008) divided these occasional remittances into “random” remittances (cash and in-kind transfers sent on opportunity and during special occasions) and “irregular” remittances (cash transfers sent according to need and done on a request basis).

The occasional amounts remitted vary from very small to very large amounts of PHP 1 million, although the research team was not able to identify the rationale and the purposes of such a large amount The Italy–Philippines Migration and Remittance Corridor of occasional remittance. On average, these occasional remittances were much higher than regular monthly remittances (see Tables 23 and 24). As the tables below indicate, for those who occasionally sent money in euro, 16 per cent of respondents sent EUR 101 to EUR 200; for those who occasionally sent money in pesos, 14 per cent sent amounts ranging from PHP 5,001 to PHP 10,000.

34 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 23: Occasional amounts remitted per Table 24: Occasional amounts remitted per transaction (in euro) transaction (in pesos)

Range F % Range F % 100 and below 26 14 1,000 and below 5 5 101–200 30 16 1,001–5,000 12 7 201–300 22 12 5,001–10,000 25 14 301–400 13 7 10,001–15,000 7 4 401–500 21 11 15,001– 20,000 14 8 501–600 6 3 20,001– 25,000 8 4 601–750 7 4 25,001–30,000 8 4 751–1000 15 8 30,000–40,000 7 4 1,001–1,500 12 7 40,001–50,000 6 3 1,501–2500 9 5 50,001–75,000 3 2 2,501–3,500 10 5 75,001–100,000 7 4 3,501–5,000 8 4 100,001–500,000 4 2 Above 5,000 5 3 Above 500,000 4 2 Total 184 100 Total 110 62

Source: IOM–ERCOF Survey, 2010. Source: IOM–ERCOF Survey, 2010.

Remittance recipients. When interviewees were asked who in the Philippines receive their remittances, mothers were found to be the primary beneficiaries of 30 per cent of the respondents (see Table 25). Sons as recipients of remittances came next (16%), followed by daughters and husbands (with 11% each). Mothers were also found to be the top recipients of remittances in other literature such as a survey done by Ribas (2008).

35 Table 25: Recipient of remittance in the Philippines

Remittance recipient F % Husband 41 11 Wife / Wives 22 6 Son/s 59 16 Daughter/s 39 11 Mother 109 30 Father 24 7 Sister/s 27 8 Brother/s 9 3 Other relatives 25 7 Other persons/individuals 2 1 Other groups 1 0 Total 358 100

Source: IOM–ERCOF Survey, 2010.

D. Channels, Services and Products

Awareness of remittance channels. Respondents exhibited very high unaided awareness and knowledge of available remittance services and products, especially those offered by Filipino service providers.19 Among the banks, it was BDO that was mentioned most often (48% or 164 respondents), followed by BPI (36% or 126 respondents), and Metrobank (32% or 112 respondents). All the The Italy–Philippines Migration and Remittance Corridor respondents were able to mention at least two or three banks.

Several other money transfer channels were mentioned including what is called “door- to-door service”, which delivers money direct to the residence of the recipient. It is a service offered in both formal and informal channels. For an extra cost, banks also offer door-to-door services and hire messengers for this purpose, especially if the remittance recipient is either far from the bank, or the residence is inaccessible to a bank’s branch.

Another form of remittance transfer typical among Filipinos is the padala practice, whereby money is brought home by friends and relatives. As many as 97 per cent (332) of the respondents mentioned padala as a known channel of remittance transfer (see Table 26).

19 No examples or choices were given to the respondents in reply to this question.

36 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 26: Popular remittance channels

Number of respondents who Channel % of total mentioned a service respondents (unaided) Bank / Bank-to-bank / Unspecified bank 274 78 BDO 164 48 BPI 126 36 Metrobank 112 32 PNB 78 22 RCBC 81 23 Landbank 28 8 Italian banks 24 7 Door-to-door / Other MTOs 195 56 Western Union 94 27

Padala through family, friends, co-workers, relatives 332 97

Source: IOM–ERCOF Survey, 2010.

Sources of information about remittance channels. Almost half of the respondents (41%) indicated the banks to be their main source of information about remittance channels. This suggests that the banks’ efforts to market their products and services are reaching a significant portion of actual and potential remitters. The relatively higher educational attainment of OFWs in Italy is also an empowering factor in the selection of services. Family members or relatives who are also in Italy or abroad are likewise a source of information at 14 per cent, followed by friends overseas (8%) and family and relatives in the Philippines (8%). The relatively low awareness of remittance channels through PDOS at 2 per cent and the POEA at 3 per cent could be because workers in Italy do not pass through POEA processing, which includes mandatory attendance of PDOS, where remittances are part of the curriculum (see Table 27).

37 Table 27: Source of awareness and information on remittance channels

Source F % Bank / Bank-to-bank / Unspecified bank 132 41 PDOS 5 2 POEA 10 3 OWWA 5 2 DFA 2 1 Philippine Embassy in Italy 3 1 Telecommunications companies (Smart, Globe, etc.) 3 1 Family/relatives in the Philippines 25 8 Family/relatives in Italy/abroad 46 14 Friends in the Philippines 5 2 Friends in Italy/abroad 27 8 Co-workers abroad 9 3 Employer abroad 0 0 Recruitment agency/ies 0 0 Advertisements 7 2 Other government agencies 1 0 NGOs 4 1 Other organizations 39 12 Total 323 100

Source: IOM–ERCOF Survey, 2010. The Italy–Philippines Migration and Remittance Corridor

Remittance channels used. The survey inquired into which Philippine banks the migrants and/or their beneficiaries use. This included whether they had accounts with the banks or simply used the other bank services to transfer money (see Table 28a). The survey allowed the migrants to give multiple answers if they used various methods to remit money to their beneficiaries. For example, a total of 74 respondents answered that they often use BDO to send remittances. Eighteen of those respondents chose not to elaborate about how they used this bank; 26 respondents maintain their accounts with BDO, 53 respondents have beneficiaries who have BDO accounts, while one respondent answered that rather than maintain a BDO account, the beneficiaries simply pick up the remittance from a BDO branch.

38 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 28a: Philippine banks most commonly used by respondents

Type of bank account of respondents Name of Philippine No. of Respondents who have a pick- respondents up remittance arrangement bank Unspecified Self Beneficiary Others with the bank

BDO 74 18 26 53 3 1 BPI 48 77 0 0 0 23 Metrobank 47 28 0 55 0 6 PNB 27 11 19 63 7 0 RCBC 19 5 6 63 0 16 Landbank 13 8 15 38 23 15 Source: IOM–ERCOF Survey, 2010. Note: Multiple answers allowed.

The answers gathered by the survey indicated that migrants regularly use one to three different methods of sending remittances. Different remittance channels were used for different beneficiaries and different purposes. The answers also revealed that migrants do not only send monetary remittances, other items are also sent to their beneficiaries back home. Many showed a preference for using Philippine banks (see Table 28b).

Table 28b: Remittance channels used by Filipino migrants in Italy

Usual Channel F % Bank / Bank-to-bank / Unspecified bank 105 30 BDO 74 21 BPI 48 14 Metrobank 47 13 PNB 27 8 RCBC 19 5 Land bank 13 4 Italian banks 0 0 Total banks 333 95 Door-to-door / Other MTO 39 11 Western Union 30 9 Others 3 1 Total non-bank except padala 72 21 Padala through family, friends, co-workers, relatives, etc. 34 10 Source: IOM–ERCOF Survey, 2010. Note: Multiple answers allowed.

39 Remittance channels last used compared with all the channels migrants ever tried. Aside from asking the respondents to identify the remittance channels most often used, the survey also attempted to track all the remittance channels that the respondents have tried. This was done in the attempt to draw a complete picture of the remittance channels available to the migrants. The results show that many have tried non-bank remittance channels or MTOs (see Table 29). The Filipino practice of padala (“to have something sent”) was used by all the respondents and this is unsurprising given the strength of the Filipino communities and social networks in Italy.

Table 29: Comparison of the remittance channels Filipino migrants have used Usual Ever Last Channel F % F % F % Bank / Bank-to-bank / Unspecified bank 105 30 88 24 172 47 BDO 74 21 69 19 179 11 BPI 48 14 23 6 89 24 Metrobank 47 13 52 14 88 5 PNB 24 8 29 8 40 24 RCBC 19 5 20 5 33 49 Landbank 13 4 9 2 19 9 Italian banks 0 0 7 2 1 1 Door-to-door / Other MTOs 39 11 37 10 117 32 Western Union 30 9 33 9 108 29 Others 3 1 2 1 11 3 Padala through family, friends, 34 10 18 5 177 48 co-workers, relatives, etc.

Source: IOM–ERCOF Survey, 2010. Note: Multiple answers allowed. The Italy–Philippines Migration and Remittance Corridor

No bank or other service captured a significant share of migrant patronage. This may be because of the varied remittance markets catering to Filipinos in Italy that are competing less in price but more in other arenas such as location of the service in Italy and the kind of service delivery to the Philippines. A study by ADB (2005) presented that proximity and accessibility to migrant beneficiaries is a major determinant of which channels the migrants prefer.

A significant number of respondents indicated that they have used MTOs as these operators offer unique services (i.e. faster remittances, fewer documentation and administration requirements). Indeed, the adage “less is more” seems attractive to Filipinos as exemplified by their continued practice of padala, which requires trust in the person tapped to bring home their remittance and non-monetary gifts to their beneficiaries, rather than the formal requirements of remittance service providers.

40 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Satisfaction levels. Many of the respondents expressed high satisfaction with the existing remittance transfer services. Filipino banks (4.06) and MTOs (3.92) received the highest average satisfaction ratings. Additionally, respondents gave them the highest score (“5 or very satisfied”) more often than the other service providers. The lowest average ratings went to recruitment agencies (2.79), investment companies (2.85) and the real estate industry (3.30). Despite their low rating, real estate companies are making enormous strides in the market for residential housing. Recruitment agencies took the lowest ratings even though Filipino migrants rarely deal with them (see Table 30).

Table 30: Satisfaction level with existing remittance transfer services and other services from the private sector

Number w/ Average Number experience in satisfaction % saying ”very responding dealing with the rating1 satisfied” Private organization private organization Usually transacted bank in Manila 331 312 4.06 25.6 Usually transacted bank in Italy 236 167 3.93 15.0 Usual MTO 190 95 3.92 26.3 Recruitment agency 166 48 2.79 2.1 Telecommunications companies 311 250 3.64 12.8 Real estate companies 209 86 3.30 2.3 Investment / pre-need companies 169 48 2.85 4.2 Source: IOM–ERCOF Survey, 2010. Notes: 1. The ratings are interpreted as follows:

5 – very satisfied 4 – satisfied 3 – neither satisfied or dissatisfied 2 – dissatisfied 1 – very dissatisfied n.a. – not applicable

2. Sample sizes are small to be considered relevant for the table.

E. Non-Monetary Remittances and Hand-carried Remittances (Padala)

Non-monetary remittances. This survey made an attempt to shed light on non-monetary remittances.20 Even though these types of transfers are not accounted for in official remittance statistics, Filipinos

20 The important issue of non-monetary remittances is often neglected because it is not often quantified. Some attempts are being made to capture the volume, for example, through a survey of overseas Filipinos (by the National Statistics Office) on remittances in- kind, estimated already in monetary terms.

41 abroad are known for sending boxes of goods to loved ones in the Philippines (called the balikbayan box21 ), and their monetary value could be significant.

Of the 347 migrants asked the question of whether they also send non-monetary items home, a large majority – 267 of them – admitted doing so (77%). They have sent other items back home such as mobile phones (65%) and other electronic gadgets (see Table 31). The average cost of these non- monetary or in kind contributions amounts to PHP 57,563 (EUR 918) for those in Philippine peso value and EUR 795 for those using euro.

Table 31: Other non-monetary items sent back home (n=347)

Item % Food 86 Clothes 80 Accessories (bags, belts, etc.) 79 Toiletries and perfume 83 Household linen (bed sheets, pillow cases, etc.) 49 Household appliances (microwave etc.) 32 Household decorative items (vase etc.) 40 Other household durables (furniture, carpets, etc.) 21 Printed materials (books, magazines) 20

Source: IOM–ERCOF Survey, 2010. The Italy–Philippines Migration and Remittance Corridor Money brought home. A total of 276 respondents said they brought money with them during their visit to the Philippines. Among them, 39 per cent brought euro while 53 per cent brought Philippine pesos home. For those who indicated how much cash was brought home, as well as the monetary worth of non-cash items, the average was PHP 268,642 (EUR 4,283) (see Table 32).

The IOM–ERCOF survey did not look into how these somewhat large funds are expended, but there has been anecdotal evidence that returning OFs spend the cash they bring home on non-essential expenditures such as sponsoring fiestas and other types of conspicuous consumption (Añonuevo, 2002).

21 Balikbayan refers to the returning migrant in Filipino language.

42 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 32: Value of cash and gifts bought home (weighted averages)

In Philippine pesos In euro Channel Average Minimum Maximum Average Minimum Maximum In cash 268,642 1,000 1,000,000 2,641 100 20,000 In kind 57,563 1,000 500,000 795 20 15,000

Source: IOM–ERCOF Survey, 2010.

F. Income and Expenses of Italy-based Filipino Remitters

Personal sources of income. This section will detail the income sources and expenses of the surveyed OFs in Italy. All those surveyed (n=314) had at least one source of income of varied wage range from EUR 200 to EUR 5,000, with an average wage of EUR 1,044 per month (see Table 33). Of the 314 respondents, 101 had two sources of income and 31 others had three income sources. Sources of income may mean income coming from a regular employer, or from self-employment such as by providing extra services like doing household chores or driving for other employers. If one has another source of income, the possible average income is EUR 1,518. If one has a third income, the possible average income rises to EUR 1,832. The data includes a number of OFs who reported other income coming from investments and businesses in Italy and in the Philippines.

Table 33: Personal sources of income (employment and other sources)

Monthly income (euro) Average income Source of income N Lowest Highest (in euro) One source of income 314 200 5,000 1,044 Second source of income 101 20 2,500 474 Third source of income 31 30 1,000 314

Source: IOM–ERCOF Survey, 2010.

There are significant variations on the income size among respondents. The most number of respondents fall in the income range of EUR 700 to EUR 1,000 on their primary source of income (see Table 34). For those with second jobs, a fifth of them earn an extra EUR 151 to EUR 200 (see Table 36). Finally, among the 31 respondents who stated that they hold a third job, seven of them reported that these jobs earned them another EUR 401 to EUR 500 (see Table 36).

Eight per cent of respondents reported that they received income from businesses in the Philippines, e.g. from coconut plantations, rice fields and farms tilled. About six respondents have apartments for rent in Italy to provide them added income. Among the five respondents who gave details on their sources of income in the Philippines and Italy, one specified interest from lending and investments.

43 Table 34: Monthly income from one source Table 35: Monthly income from a second of income source of income

Euro F % Euro F % 400 and below 15 5 100 and below 10 10 401–500 14 4 101–150 7 7 501–600 18 6 151–200 19 19 601–700 20 6 201–300 13 13 701–800 57 18 301–400 9 9 801–900 30 10 401–500 16 16 901–1,000 56 18 501–750 10 10 1,001–1,100 16 5 751–1,000 8 8 1,101–1,250 34 11 1,000–1,250 3 3 1,251–1,500 29 9 1,250–1,500 3 3 1,501–1,750 3 1 above 1,500 2 2 1,751–2,000 10 3 Total 100 100

2,000–2,500 4 1 Source: IOM–ERCOF Survey, 2010. 2,501–5,000 8 3 Total 314 100

Source: IOM–ERCOF Survey, 2010.

Table 36: Monthly income from a third source of income

The Italy–Philippines Migration and Remittance Corridor Euro F % 100 and below 5 17 101–150 3 10 151–200 6 19 201–300 6 19 301–400 2 6 401–500 7 23 above 500 2 6 Total 31 100

Source: IOM–ERCOF Survey, 2010.

44 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Expenses. Respondents were asked to rank their expenses in Italy and share their actual expenditure, beginning from “1” as their primary expense (see Table 37). Overall, OFs had a monthly average expense of EUR 743. The items that over 200 of the surveyed Filipinos included among their regular expenditures are food and beverage, transportation and rent and house repairs. Rent took up their highest monthly expense at an average cost of EUR 285. Although the study did not inquire about the housing status of the respondents, a significant number of whom are domestic workers, some live in the households of their employers, while others rent accommodations.22

Table 37: Breakdown of household expenses of respondents

Average Monthly amount in euro Source of income N rank Average Minimum Maximum Food and beverage 282 1.95 160 10 700 Transportation 255 3.48 50 10 450 Utilities 166 4.27 84 5 300 Household operations 10 n.a. 62 20 150 Clothes, shoes, accessories, personal care, etc. 100 5.66 58 5 350 Education 19 n.a. 132 10 400 Communication 179 3.25 113 5 500 Recreation 27 5.2 87 20 500 Medical care 14 6.80 48 1 240 Rent and house repairs 205 1.77 285 20 900 Taxes 17 n.a. 136 13 300 Special occasions 54 6.30 83 5 416 Miscellaneous gifts 34 8.29 48 2 300

Source: IOM–ERCOF Survey, 2010.

Monthly expenses for house amortizations, pre-need premiums and payments for loans were also substantial with monthly payments higher than EUR 200 each. Forty-seven respondents acquired loans from both the Philippines and Italy, and are repaying these (e.g. real property, vehicles).

22 Proceedings of the Rome Policy Dialogue on the Italy–Philippines Remittance Corridor, 19–20 May 2009, Rome, Italy.

45 Special Section: Households and Families of Italy-based Filipinos

Estimates from the 2006 Family Income and Expenditures Survey (FIES) conducted by the NSO of the Philippines show that there are 1.601 million Filipino households in the Philippines that receive cash, gifts and other forms of income from abroad (NSO-FIES 2006 in IMDI, 2008). Discussions about the households and families of OFs are essential as they do not fall under the typical “nuclear family” model.

According to sociologist Filomeno Aguilar (2009), a “culture of relatedness” gives meaning to Filipino families, households and their communities. It is a concept defined by a wider sense of belonging that includes kinship and community ties between parents and children, among siblings, and “in the communities where migrants came from.”

“These cultures of relatedness have enabled (migrants and their families) to cope with economic hardship, making itinerant and internal migration possible and their consequences bearable. Through dint of hard work, these families have gradually improved their levels of living. Because (overseas) migration is often meant to help the close kin ties, kin ties have been easy to mobilize to support migration. Kin and community ties have ensured that the necessary and appropriate adjustments in spousal relationships, living and residential arrangements, care-giving, and the broader fulfilment of parental and filial duties are made. But overseas migration has also demanded new ways and new forms of being family and of being kin and community” (Aguilar, 2008: 168).

1. Household Composition

The IOM–ERCOF survey respondents were asked to identify their household members in the Philippines, in Italy or elsewhere (see Table 38). A household in this case is defined as all members sharing a meal together under one roof and thus necessarily sharing expenses. Some households in Italy are composed of Filipino migrants who split the rent for an apartment and share in the cost of groceries. These households do not necessarily have family members, but rather other adults working in the

The Italy–Philippines Migration and Remittance Corridor area. In the Philippines, however, households were more likely to refer to the migrants’ immediate and extended families who live under one roof and share meals.

The phenomenon of overseas migration has made Filipino families transnational. Yet the Filipino tradition of close-knit family ties and the inclusiveness of household membership among Filipino migrants remain, whether they are in the Philippines or abroad. The members of migrants’ households directly or indirectly benefit from OFs’ remittances.

46 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 38: Household composition (multiple responses)

In Italy In the Philippines

% of % of Number of Number of Relation of family member those who those who those surveyed those surveyed to the remitter-respondent answered answered who answered who answered in the in the the question the question affirmative affirmative

Father 55 18 172 65 Mother 76 34 193 72 Spouse 97 67 156 50 Other adults in family 112 78 246 85 Children in the family 55 29 143 40 Other adult relatives 58 22 138 30 Other children relatives 48 2 114 14

Other adults not related (board mates, co-employees, friends) 52 15 109 8

Other children not related 49 4 109 4 Other adult, house help 48 2 147 35

Source: IOM–ERCOF Survey, 2010. Notes: 1. About five respondents shared they had brothers and sisters in other countries, e.g. Taiwan, Canada, the United Kingdom, etc., aside from those with them in Italy. This table includes six “other adults” who do not currently live in Italy. 2. Respondents were generally hesitant to answer the questions about household members that were in Italy, which accounts for low number of responses.

The IOM–ERCOF survey captured the following information about the respondents’ households (see Table 38):

• Almost one third (29%) of respondents have children between 8 and 17 years old in Italy. • About 40 per cent of respondents have children between 8 and 17 years old in the Philippines. • The respondents have relatively large households. The majority include their fathers (65%), mothers (72%) and adult siblings (85%) in the households that they help sustain in the Philippines. • Aside from immediate families, 30 per cent of respondents say they have other adult relatives (e.g. grandparents, aunts, uncles, nephews, nieces) in their households in the Philippines. • Almost one fourth (22%) of respondents report that they have other adult relatives (e.g. grandparents, aunts, uncles, nephews, nieces) in their households in Italy. • About 35 per cent of respondents say they employ household help (kasambahay) in the Philippines.

47 2. Households’ Income Sources and Expenditure

Only 77 of the respondents tackled the question of whether there were others contributing to the household income (see Table 39). Among those who answered, parents were most likely to contribute additional income (39%), followed by sisters (23%).The inquiry was intended to determine the extent of the households’ dependence on remittances. However, the question proved to be a sensitive topic. It remains an important area for further research.

Moreover, a question about household expenditures in the Philippines revealed that almost all the respondents were not aware of the expenses. The survey had no follow-up questions to interrogate this matter further. It remains a puzzle that those who regularly provide income for their households are unaware of how and where the money they sent is spent. This is another issue that could prove important for further research.

Table 39: Household members contributing to household income

Household member F % (F/N) Parent/s 30 38.96 Sister/s 18 23.37 Brother/s 15 19.00 Son/s 12 16.00 Husband 10 13.00 In-law/s 5 6.00 Niece/s or nephew/s 3 4.00 Daughter/s 3 4.00 Others (wife, aunt) 3 4.00

The Italy–Philippines Migration and Remittance Corridor Source: IOM–ERCOF Survey, 2010. Notes: N = 77 answered the question. Multiple answers allowed.

G. Savings and Investment Practices and Behaviour of Italy-based Filipino Remitters

The IOM–ERCOF survey attempted to measure the respondents’ knowledge and practice in terms of savings and investments. Their answers to questions in the area of savings and investment also will shed light on their financial literacy and their future plans.

48 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Ability to save and amount. Asked about their ability to save from their incomes, 71 per cent (or 257 of 360 respondents) confirmed they do. The rest (29%) do not have savings. This exhibits a proportionately high number of respondents with savings. The range of total savings varies widely, starting from EUR 20 to EUR 2,000. Among those who save, 152 respondents provided details of their savings, 41 per cent (n=63) disclosed their savings to be about EUR 100 monthly. Of the 63 respondents, 37 said they save exactly EUR 100 (see Table 40). The average savings is EUR 265 monthly. Among 16 respondents who say that they regularly save a proportion of their salary, their average percentage of saving is about 32 per cent, with answers ranging from 5 per cent to 70 per cent.

Where are savings kept? Those who save were asked where they keep their savings. All those questioned reported that they kept their money in the bank. In addition, about 25 per cent of respondents said that they also keep savings at home, and 12 per cent bring their savings around with them (see Table 41).

There were more respondents using Philippine banks (e.g. BDO) at 23 per cent as repository of their savings than Italian banks (e.g. Banca Sella) at 6 per cent23 (see Table 42). This implies that Filipinos are more likely to hold bank accounts in the Philippines than in Italy.24 The study survey also revealed that despite the presence of formal channels, 3 per cent still opt to save in paluwagan, an informal savings scheme popular among Filipinos. Paluwagan is explained further in a subsection of this chapter.

The survey was not able to determine the length of time migrants keep their savings. Further inquiries into the matter might be able to discover whether savings instruments are treated as short-term repositories for daily expenses or long-term investments. In their study, Añonuevo and Añonuevo (2002) reported that a survey among 500 remitters in Italy, Hong Kong SAR and Batangas in the Philippines showed that 70 per cent of respondents were not able to save.

Table 40: Monthly savings amount (in euro) Table 41: Where savings are kept Amounts F % Where money is saved % 20–100 63 41 Bank (in the Philippines and/or in Italy) 100 101–200 35 23 In the house (or place where they stay) 25 201–300 19 13 Is kept with me personally 12 301–400 6 4 In paluwagan (informal pooled fund practice) 3 401–500 10 7 In investments 2 501–750 8 5 Insurance 2 751–1,000 10 7 Is with another person 1 above 1,000 1 1 Others: sabungan (cockfights) etc. 2 Total 152 100 Source: IOM–ERCOF Survey, 2010. Source: IOM–ERCOF Survey, 2010. Note: Multiple answers allowed.

23 Filipino banks in Italy are accredited to operate as money transfer agents rather than as banks, and are unable to offer deposit service in Italy. 24 A related finding is the number of migrants with accounts with Italian banks, as studied by ABI and CeSPI (2008: 5). Half of those surveyed (49.5%) hold such accounts.

49 Table 42: Banks that respondents use for their savings Banks where money is saved % Italian banks 6 Banca Milano 1 Banca Sella 2 Banco Posta 3 Philippine banks 23 BDO 12 BPI 2 Landbank 2 Metrobank 5 PNB 2

Source: IOM–ERCOF Survey, 2010. Note: Multiple answers allowed.

Where do they save and invest? The IOM–ERCOF survey broadly itemized the respondents’ savings and investments in Italy and in the Philippines. The data indicates that they have more savings and investments in the Philippines than in Italy. These were placed in various products of Philippine banks, and in asset accumulation such as real estate and agricultural land.

In Italy, many respondents own bank accounts – 55 per cent maintain a current account while 13 per cent have a savings account. The high patronage of banks among Filipinos is not surprising, particularly current accounts which would be a normal tool for settlement of financial transactions in Italy,

The Italy–Philippines Migration and Remittance Corridor considering that the larger majority of Filipinos have legal status in Italy. In comparison, undocumented workers would have to make do with informal savings schemes such as the paluwagan.

In the Philippines, 30 per cent say that they maintain a savings account, followed by 12 per cent for house and lot investments other than their place of domicile. This is closely followed by investments solely in residential lots (11%) (see Table 43).

50 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 43: Investments in Italy and in the Philippines

In Italy In the Philippines Investment1 N % saying yes N % saying yes

Savings account in a bank 23 13 147 30 Current account in a bank 98 55 7 1 Time deposit in a bank 2 1 26 5 Other bank accounts - 0 4 1 Money market 1 1 - 0 Bonds 1 1 - 0 Other financial instruments or investments - 0 3 1 Educational pre-need plans - 0 10 2 Medical and other health care plans 4 2 26 5 Social security plans 2 1 13 3 Other pre-need plans 3 2 7 1 Residential lot (no house) aside from current 4 2 56 11 Commercial lot or building 1 1 15 3 House and lot aside from current - 0 59 12 Other real estate (e. g. raw land) 1 1 27 6 Other vertical real estate (e.g. condominiums) 1 1 6 1 Income-earning investment in animals (e.g. pigs) - 0 16 3 Income- earning investment in vehicles (e.g. jeepney) 2 1 9 2 Other income-earning capital investments - 0 2 0 Business with regular earnings 7 4 14 3 Business with occasional earnings 3 2 2 0 Other businesses 2 - 0 3 1 Club shares 2 1 1 0 Jewellery 21 12 28 60 Antiques and other collectibles 2 1 2 0 Others3 - 0 7 1

Source: IOM–ERCOF Survey, 2010. Notes: 1. Multiple answers allowed 2. ”Other businesses” include small businesses for family members and relatives (e.g. tricycle for sister). 3. “Others” include investments in own house (e.g. renovations, expansions).

51 Other investment activities. Ninety-four respondents mentioned investing in cooperatives or credit unions (membership-based savings groups that follow the principles of cooperation and provide economic and social services), paluwagan (a Filipino practice of informally pooling monies for savings and occasional credit), and rural banks based in the Philippines.

Of these, more than half are involved in paluwagan schemes, 31 with cooperatives, five with rural banks, and two in other forms of investments.

Paluwagan is a savings/loan practice by informal organizations often managed by the members themselves. Participants agree to deposit certain amounts on specified or agreed dates (say daily, weekly or monthly) to a designated collector-cum-treasurer. On a specified date, for example monthly, one member will receive all the contributed money. The next member will then get the lump sum in the next month, and the process goes on until all participants have received their predetermined shares. A participant whose turn to receive proceeds has not yet come, may also in the meantime, borrow certain amounts with interest, to be deducted from his/her dividend. This Filipino practice enables participants to accumulate certain amounts that may be saved, deposited in a bank, invested, spent or used for certain purposes (e.g. lending) although the real long- or medium-term savings effect of the scheme must be verified further as much of the money is said to be immediately spent purchasing non-essential goods. Filipino migrants are attracted to join paluwagan groups for reasons other than financial since it is a way for them to meet each other on a regular basis.

Ownership of assets. Respondents were also asked about properties and other assets in Italy and in the Philippines. What is evident is the high percentage of home ownership (80%), bank savings other than time-bound deposits (67%) and cars (45%) in the Philippines. The ownership of information and communication items such as mobile phones was high both in Italy (73%) and the Philippines (63%). One third of the respondents own laptop computers in Italy (see Figure 2).

House and car purchases in the Philippines may reflect the Filipinos’ desire to show that, despite their physical absence, they are still part of the families they left behind and their home communities. From an outsider’s perspective, owning and maintaining a home uninhabited by the owner may seem The Italy–Philippines Migration and Remittance Corridor economically imprudent, yet this has to be viewed in the context of the culture of the origin community (Aguilar, 2008).

Ownership of cars has been made easy through instalment plans offered through aggressive marketing efforts of Philippine consumer banking. Some respondents also said cars or vehicles are also used for business, aside from the desire of OFs for their children to commute to schools in family-owned vehicles rather than public transport.

52 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Figure 2: Ownership of selected items, as a percentage of the total number of respondents

90 80 80 73 67 70 63 60 48 50 45 38 40 34 35 27 28 30 24 21 17 20 11 11 10 4 6 0 House Car / Personal Laptop / Cell phone Savings Time ATM Card Credit Vehicle Computer Notebook and Deposit Card Current Account

In Italy In Philippines

Source: IOM–ERCOF Survey, 2010.

Investment decisions. The primary decision maker of the investment is the individual respondent (remitter) (see Table 44). Responses to investment-related questions (e.g. Who initiated the decision to invest? Who decided where to invest? How are investment decisions made?) all point to the OF himself or herself as the key decision maker.

The reasons that motivated respondents to consider investment/savings is anticipated future needs (78% or 85 respondents) such as emergencies, education of children, pensions, and domicile construction. Only a few (8% or nine respondents) mentioned retirement as a reason to initiate investments. Once an investment decision is made, family members participate in monitoring the investment, especially when this is in the Philippines.

The survey revealed that few respondents (16% of 255 respondents) looked, studied or made benefit comparisons in making decisions about where to invest. Almost half (48%) reported that there was no other influence bearing on their decision making except their own appreciation of the options available when they made the decision to invest. This may suggest that migrants decide on the basis of their own perception of future needs. It could also indicate relatively low prevalence of information on a wider range of investment options. Building the capacity of migrants through financial literacy training and improving current financial literacy initiatives might be useful intervention, especially given that many of the respondents possess high educational backgrounds.

53 Table 44: Top responses to investment-related questions to respondents

Investment-related questions asked in survey N % Who made the decision to invest? (n=133) Myself 83 62 Parents, mother and/or father 18 14 Friends 8 6 What are the reasons behind the investment? (n=112) Savings for future needs 85 76 Income / earnings 18 16 Retirement 9 8 Who decided where to invest? (n=257) Myself 156 61 Joint decision of married couple 49 19 Parents, mother, father 16 6 How were investment choices made? (n=255) Looked, studied, compared for benefits 40 16 On my own 30 12 Based on desire to have house and lot 21 8 None 54 21 Who influenced the decision to invest? (n=253) No one, I decided by myself 121 48 Joint decision of married couple 28 11 Parents, father, mother 26 10 Who made the investment? (n=292) The Italy–Philippines Migration and Remittance Corridor Myself 198 68 Joint decision my couple 48 16 Parents 28 10 Who monitors the investment? (n=140) Myself 52 37 Parents 19 14 Joint between couple 18 13

Source: IOM–ERCOF Survey, 2010.

54 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Text Box 3: Almost nothing left to save in the monthly budget?

The survey collected various information about the financial standing of OFs in Italy. Based on this data, together with other information obtained through FGDs and expert interviews, an attempt was made to simulate the monthly budget sheet of OFs in Italy and to estimate the level of funds that can be allocated for savings and investments.

The simulation was made based on the income of OFs (one job or multiple jobs as indicated in the survey results), and estimated monthly expenses in Italy, remittances which include regular remittance, occasional remittances and other items such as non- monetary remittances and hand-carry funds (see Table 45). The assumption was that the difference between the income and expenses is a potential source of funds for savings and investments.

Firstly, the average monthly budget was determined based on the survey results. This served as the starting point, as it presents a general picture of the income and expenses of the OFs.

Table 45: Estimated monthly budget of the overseas Filipinos in Italy (in euro)

Particulars Amount Regular employment income (primary source) 1,044 Food expense 160 Rent expense 285 Transportation expense 50 Communication expense 113 Total basic expenses 608 Average remittance 354 Total basic expenses with remittance 962

Source: IOM–ERCOF Survey, 2010.

Several hypothetical scenarios were created to carry out the simulation:

• Scenario A – OF has one primary job (no secondary or other side jobs to supplement income), with average living expenses in Italy. OF sends monthly remittances home but does not send other kinds of funds (no occasional remittances, does not send non-monetary contributions, does not hand-carry funds home).

55 • Scenario B – OF has two jobs: a primary job and an occasional secondary job. The average living expenses are the same as those in Scenario A.

• Scenario C – OF has three jobs: a primary job and two occasional secondary jobs. The average living expenses are the same as those in Scenarios A and B.

• Scenario D – OF has three jobs: one primary and two occasional secondary jobs. OF allocates additional cash for emergencies and contingencies.

• Scenario E – The same as Scenario D in terms of income and expenses. However, additional cash is budgeted for occasional remittances, which are separate from the regular remittance.

• Scenario F – The same as Scenario E, with the addition of cash carried by the OF when he/she goes home.

• Scenario G – OF has only one job. However, the OF’s expenditure budget includes the average living expenses, cash for emergencies, regular remittances, occasional remittances, and cash to personally take home.

In Scenario A, the simulation reveals that that an average OF will have very little left from his/her income for savings and investments (estimated at EUR 984 for a year) (see Table 46). This might explain earlier findings that up to 41 per cent of the respondents are able to save only EUR 100 or less monthly.

Other scenarios show that the potential for savings and investment seems to be realizable only if the OF is prudent on other non-basic expenses, employed in more than one job, and/or does not send occasional remittances or other non-monetary items. Otherwise, the situation would lead to debt burdens. The Italy–Philippines Migration and Remittance Corridor

56 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey Table 46: Annual budget of overseas Filipinos in Italy (in euro, selected scenarios using the data from survey)

Scenarios

Income, expenses, remittances, C D E F G With With With With Basic, savings and investments A B second added added added with income expense remit remit added remit Employment income 12,5281 12,528 12,528 12,528 12,528 12,528 12,528 Occasional added income 1 0 2,844 2,844 2,844 2,844 2,844 0 Occasional added income 2 0 0 942 942 942 942 0 Total income 12,528 15,372 16,314 16,314 16,314 16,314 12,528 Food expense 1,920 1,920 1,920 1,920 1,920 1,920 1,920 Rent expense 3,420 3,420 3,420 3,420 3,420 3,420 3,420 Transportation expense 600 600 600 600 600 600 600 Communication expense 1,356 1,356 1,356 1,356 1,356 1,356 1,356 Other expenses 0 0 0 1,620 1,620 1,620 1,620 Total expenses 7,296 7,296 7,296 8,916 8,916 8,916 8,916 Balance after expenses and before remittances 5,232 8,076 9,018 7,398 7,398 7,398 3,612 Monthly remittance 4,248 4,248 4,248 4,248 4,248 4,248 4,248 Occasional remittance 0 0 0 0 2,130 2,130 2,310 Cash brought home 0 0 0 0 6,378 1,320 1,320 Total remittances 4,248 4,248 4248 4,248 3,132 7,698 7,698 Amount available for savings and investments 984 3,828 4,752 3,132 1,002 -300 -4,086 Savings 984 3,180 3,180 3,132 1,002 None None Amount available for investment None 648 1,572 None None None None

Source: IOM–ERCOF Survey, 2010. Note: The assumptions of the table above are the following:

• Income from a second job (based on EUR 474 per month) is assumed to be received six times within the year. • Income from a third job (based on EUR 314 per month) is assumed to be received three times within the year. • Occasional remittances are estimated at two times within the year. • Cash brought home are estimated at one third the average amount as OFs say they are able to go home every two to three years. • Expenses are considered average expenses across all scenarios, with some considering basic expenses only and others considering total expenses. • Average estimates were derived from the results of this research.

57 In column G, we see a scenario where an OF in Italy has only one source of employment, is forced to send occasional remittances back home and goes home every three years amidst expectations of hand-carried money. This seems to be a good description of a typical OF in Italy. This scenario shows that this OF has an annual deficit of about EUR 4,086.

Some respondents do allocate funds for the education of children, which is considered a “major expense”. Others exercise prudence by spending “on necessities only,” avoiding luxuries and keeping one fourth of the monthly remittance “as savings.” The financial situation also depends on how beneficiaries recognize priorities when it comes to spending (FGD discussions, Batangas province). Some would surmise that despite the remittance from Italy, “hindi sapat ang gastusin sa bahay” (the budget is not enough for the needs at home). These “needs” would be the basic and immediate, food and education-related expenses (FGD respondent from Pampanga province). H. Retirement Plans and Aspirations of Filipinos in Italy

The concept of retirement proves to be a strong influence on migrants’ earning, saving and investment patterns, as well as their migratory movement should they wish to return home upon retirement. Usually, the retirees are supported and cared for by the remaining family members in the Philippines, although ideally, it is assumed that a retiring migrant worker had either: (1) allotted a portion of his/her earnings for retirement, (2) had invested in an enterprise in the Philippines that could be a source of livelihood, or less likely, (3) invested in a retirement or pension fund. A retirement plan for OFs who are currently serving as the main breadwinners of the household is anticipated to have varied scenarios.

Thoughts on retirement. The respondents were asked about their concept of retirement and their plans. Almost half (45%) understand retirement as a time-bound concept (e.g. in 15 or 20 years). About as many respondents (42%) think of retirement as age-related (i.e. “when I reach 65 years old”). The FGDs revealed that participants want to return home and attend to businesses once they have finished family obligations and have grown tired of working.

Plans for retirement. Many respondents shared their plans upon retirement. These include starting The Italy–Philippines Migration and Remittance Corridor their own businesses (49%), continuing their employment (27%), taking some time off for leisure/ recreation (24%), and/or taking time to manage their investments (22%). Among those who plan to start a business, some already have an idea what type of business to set up. One third (33%) aspire to venture into retail (e.g. grocery, sari-sari store or neighbourhood retail/general merchandise stores). Those aspiring to put up a food service business comprise 16 per cent, while 13 per cent are looking to raise livestock (see Table 47).

In one of the FGDs, participants who had just finished a course on entrepreneurship conducted by an Italy-based NGO, Associazione Pilipinas OFSPES, in cooperation with the Sentro Filipino and the Ateneo School of Government, shared that while they had dreamt of having a future source of livelihood from enterprise, using their earnings and savings, they did not have any concrete plans how to pursue these dreams. They revealed that after the entrepreneurship course, where they were taught how to draw business plans, budget and other skills, their plans became more concrete, and have now taken the shape of entering into various businesses and even initiating altruistic initiatives such as scholarships or the transfer of business skills to poor beneficiaries.

58 The Italy–Philippines Migration and Remittance Corridor Survey Findings on the Remittance Behaviour of Filipinos in Italy Survey The results reveal a potential that retirement can be an opportunity for economic reintegration and even for other initiatives to serve the retirees, such as the promotion of savings from remittances and redirecting these to investments, participation in skills and technology transfer activities, and financial literacy training.

Table 47: Type of business aspired for (n=158)

F % Food service (restaurant, canteen) 25 16 Livestock raising (poultry, piggery, fishery) 21 13 Farming 11 7 Real estate (apartment renting) 12 8

Retail (grocery store, sari-sari/retail store, bigasan/rice retail store, 52 33 general merchandise, etc.)

Auto supply/repair 5 3 Bakery 2 1 Resort 4 3 Internet café 1 1 Car rentals 2 1 School 2 1 Undecided, no idea yet 21 13 Source: IOM–ERCOF Survey, 2010.

Planned retirement place. Although many of the Italy-based Filipinos hold residencet or long-term permits, majority (91%) said they plan to retire in the Philippines. Thirty other respondents want to retire in Italy. The percentage is close to the findings of an earlier study (ADB, 2005:1 45) which showed that 85 per cent of respondents were likely to very likely retire in the Philippines. Indeed, the dream of coming home is frequently recalled by many migrants but often remains a dream unrealized. In the case of Filipino workers in Italy, however, the relative affordability of living costs in the Philippines, coupled with the favourable climate and the presence of family members and relatives, all combine to make their return more than likely. There are reported cases of elderly OFWs returning to the Philippines from Italy.

Of those planning to retire in the Philippines, some (n=46) mentioned more specific places – presumably their home province, such as Batangas (30%) and Oriental Mindoro (22%) (see Table 48). This surfaces the need for national and local governments to include in their communities’ development plans the preparation of appropriate infrastructure and services for migrant retirees and returnees. Better still, local governments could institutionalize local investment incentives or programmes that can link the retirees’ capital to local enterprise.

59 Table 48: Places in the Philippines to retire

Province / Region N % Batangas 14 30 Bohol 3 7 Bulacan 2 4 Laguna 1 2 National Capital Region (Metro Manila) 4 9 Negros Occidental 1 2 Nueva Ecija 1 2 Oriental Mindoro 10 22 Pampanga 1 2 Pangasinan 2 4 Quezon 1 2 Tarlac 3 7 Zambales 1 2 Occidental Mindoro 1 2 Bicol Region 1 2 Total 46 100

Source: IOM–ERCOF Survey, 2010. The Italy–Philippines Migration and Remittance Corridor

60 The Italy–Philippines Migration and Remittance Corridor V. Leveraging Migrants’ Remittances for Development Leveraging Migrants’ Remittances for Development

This chapter deals with the survey’s findings on the migrants’ philanthropic activities, their interests to help in the development of their home country, and their opinions about existing remittance services. It also discusses current public and private initiatives that link the successes of migration to development goals. After learning about their sociocultural and financial situations as migrants in the previous chapters, Chapter V looks to the future where migration and remittance become part of the national development agenda. The survey made possible a glimpse of the personal circumstances of the migrants, as well as a scan of numerous government and non-government initiatives geared to meld the fruit of migrant work with the agenda of local development. This portion attempts to highlight the potential, favourable environments, and significant support for a synergy between migration and development objectives. A. The Context of Migration and Development

Migration and development are multidimensional concepts that are distinct from each other. Linking them together produces numerous debates and diverse opinions. There is a lack of clarity and knowledge of just how migration and poverty interact with each other and with other variables such as population growth, population mobility, hindrances to the movement of persons and inequality. Migration may help reduce poverty in some communities, but at the same time it increases feelings of relative deprivation in others. It is also important to note that the beneficiaries of remittances differ in their expenditure behaviour. Additionally, when analysing costs and benefits and issues such as the “brain drain,” the implications to human rights and the moral hazards of migration, sweeping conclusions will be easy, but problematic.

Steering clear of technical details, which is beyond the scope of this paper, this research initiative recognizes the following:

1. Migration is a consequence of a rapidly changing global infrastructure, and is associated with both financial and social costs to migrants and the migrants’ countries of origin and destination. 2. There are gains associated with migration (such as remittances and the development or training of skills) that are repatriated by migrants and which have positive effects on the migrants’ households and on local economies. 3. The gains could be multiplied and costs and income distribution problems mitigated through coherent and meaningful policies that put migrants’ rights and human development at the focal point of migration programmes. 4. Remittances need to be factored into development planning, as “an economic trigger and not a way of life” (IOM, 2005). Policymakers should revisit development policies and identify the different migration scenarios the country faces.

The research methods undertaken for this project sought to identify the current context of migration, the behaviour of migrants, the practice of remittance, and the areas where policy interventions and

61 actionable initiatives may be introduced to multiply the gains from migrant work for the development of both the individual and the community.

In 2003, international consensus declared the attainment of Millennium Development Goals (MDGs) by 2015. The MDGs identified the elimination of poverty and greater access to education and health as indicators of development. While the body of research on migration and development present sometimes contradicting conclusions, there is evidence that migration brings about certain improvements in human development. Based on such studies, several positive trends or effects of remittances on the origin communities, including the Philippines, have been observed. Nevertheless, these observable advantages are not intended to be generalizations of development outcomes applicable across the board.

1. Fiscal Position of Origin Country

The inflow of remittances increases the recipient country’s supply of foreign exchange. This improves the country’s balance of payments and increases its international reserves, making the recipient economy less vulnerable to adverse external shocks. It has also been argued that remittances spur consumption demand, which encourages growth in service sectors and promotes domestic production, employment and other sources of livelihood. Large inflows of remittances have also been linked to financial development by increasing the bank deposit-to-GDP ratio and the proportion of bank credit to the private sector. 25

2. Poverty Reduction

Estimates by Ernesto Pernia (2008) show that without remittances, the Philippines would have 2.5 million more people living in poverty. According to Dean Yang (2004), the decline in poverty is attributed to increases in economic activity due to higher remittance flows to households of migrant workers as well as to the spillover effects of these transfers to the overall economy.

3. Uses of Remittances by Migrant Households The Italy–Philippines Migration and Remittance Corridor

BSP expenditure surveys reveals that the income derived from remittances are used for daily consumption such as food (95% of total households for 2008), as well as investments in human capital in the form of education (65%) and health care (47%). Other uses for remittances include debt payment (38%), purchase of durable goods (17%), saving (27%) or in financing housing improvement, renovations or buying real estate (12%) (see Table 49).

25 BSP Deputy Director Diwa Guinigundo, Address at the DFID/IADB International Forum on Remittances, Washington D.C., 2007.

62 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development Table 49: Items to which remittances are allocated by beneficiary families in the Philippines

Annual average % of Allocated items households 2007 2008 Food 93.83 95.83 Education 42.63 65.28 Medical expenses 19.68 47.93 Debt payments 21.78 38.80 Savings 15.05 27.88 Purchase of appliance / consumer durables 8.00 17.35 Purchase of a house * 1.95 12.23 Investment 4.20 4.23 Purchase of a car / motor vehicle 2.00 4.38 Others 1.43 5.40

Source: BSP - Consumer Expectations Survey, 2009. Note: * From the second to the fourth quarter of 2008, the purchase of house included rentals. Note that BSP’s Consumer Expectations Survey had the following respondent households with OFWs:

Year 2007 Quarter 1 444 OFW households Quarter 2 423 OFW households Quarter 3 419 OFW households Quarter 4 469 OFW households Year 2008 Quarter 1 477 OFW households Quarter 2 525 OFW households Quarter 3 552 OFW households Quarter 4 562 OFW households

4. Investments in Human Capital

Dean Yang (2004) found positive linkages between migration, and remittances and education or health outcomes. He analysed the impact of remittances on Filipino households and found “a rise in remittances of 10 per cent of initial income will increase the fraction of children aged 17 to 21 who are attending school by more than 10 percentage points.” The literature posits that positive income shocks allow households to reduce child labour and increase school attendance. The same conclusion has been observed in the case of remittance-receiving households in the Philippines. Higher remittance income results in higher human capital investment in terms of increased school attendance and lower child labour per household per week. OFWs often cite the provision of good education for their children as one of the primary reasons why they seek higher-paying jobs abroad.

63 Alvin Ang (2008), for example, identified in his study that remittances have provided encouraging results to Philippine education indicators such as drop-outs, school participation, and cohort survival – all with positive results on regression computations. This means that because of remittances, more children of migrants stay in school and graduate compared to children of non-migrants.

5. Housing

The reliable flow of remittances can help migrant families save for the required down payment for housing and build credit records, which expands the range of financial products and services available to them. According to Teresa Punzi (2009), households that receive remittances can access formal financing to acquire housing if they are able to document their total income. By acquiring property, the migrant turns capital flows into equity. Having collateral further eases the access to credit. Remittance- backed housing mortgages tend to concentrate on the low-income housing social segments and rural areas. The migrant households become more financially literate as they are exposed to financial intermediaries and services. By increasing the size of the housing market, migrant flows also help develop local capital markets.

In the case of the Philippines, consider that there are now at least 500,000 Filipino migrant workers who are members of the government housing programme called Pag-Ibig, and who have availed themselves of, or are entitled to avail themselves of, the agency’s home lending programme. The IOM–ERCOF survey likewise indicated that as many as 80 per cent of the respondents owned a house in the Philippines. B. Philanthropic Activities of Italy-based Filipinos

The IOM–ERCOF survey asked Italy-based Filipino remitters about their level of interest and involvement in developing their home communities. The survey reveals that almost half (43%) have donated to specific causes or groups in the Philippines. About 42 per cent of these donations went to church-run causes, while 17 per cent helped those who were sick or in need. Other major donations were toward disaster relief (10%), burial expenses (10%) and school expenses (6%). The Italy–Philippines Migration and Remittance Corridor

Among those who voluntarily donated, 42 per cent personally handed out their donations to the beneficiary organization, while 37 per cent deposited their donations to the beneficiary’s bank account. Contributions were also made through third parties (14%). About one fourth of the respondents are aware of groups in Italy that provide assistance to the Philippines. However, only 40 respondents were able to give specific information about these groups, which include church-based groups, whereby parishes or dioceses receive the money and use it to fund services for parishioners, aid poor people and contribute to church construction projects, among others.

About 41 per cent say they have given solicited donations, while 65 per cent said they have been approached for donations by people they know personally. The direct solicitations of people familiar to OFs seem to be the most effective way to secure these donations. Thirty-nine per cent directly handed out their contributions to the organization, while 29 per cent deposited their donations to the organization’s bank account.

64 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development The majority of the survey respondents indicated interest when asked about contributing directly to help their communities in the Philippines. Sixteen per cent replied that they are “very interested” and 44 per cent said they are “interested” to do so (see Table 51). When asked about their preferred development causes, most said they would want to contribute to the welfare of children (24%) and “charity”-related activities (20%) (see Tables 50 and 52).

Table 50: Causes to which overseas Filipinos in Italy donate

Cause F % Church 61 42 Needy and / or sick people 24 17 Disaster and /or calamity victims 15 10 Burial / bereavement 14 10 School / Education 8 6 Others (schools, barangay projects, orphanages, etc.) 22 15 Total 144 100

Source: IOM–ERCOF Survey, 2010.

Table 51: Interest in contributing to help communities in the Philippines

F % Very interested 37 16 Interested 98 44 Neither 44 20 Not interested 32 14 Definitely not interested 14 6 Total 225 100

Source: IOM–ERCOF Survey, 2010.

65 Table 52: Preferred charitable and community causes (top-of-mind)

F % Children (e.g. abandoned, street children) 35 24 “Charity” 29 20 Church 18 12 Livelihood programme 11 8 Town activities 8 6 Disaster victims 7 5 Disabled 7 5 Others (unemployed, youth, etc.) 30 20 Total 145 100

Source: IOM–ERCOF Survey, 2010.

The desire of OFs to “do good” for their hometown could take various forms. For example, one FGD participant was enthusiastic to say that his return migration to the Philippines will include plans to set up a nutrition centre to feed poor and hungry children, build a restaurant that would hire the unemployed, and have weekly free Sunday breakfasts for the poor in his hometown.26 Others shared their desire to help charities for the elderly and the disabled (e.g. foster care, social services) and revealed that they have been donating to church organizations and that they are even members of -run ministries for migrants and their families.27 Some of these remittance- recipient households even hope that their home communities will launch livelihood projects.28 C. Philippine Government Programmes on Migration and Development The Italy–Philippines Migration and Remittance Corridor

While the Philippines has developed an elaborate structure for the administration of overseas employment, it has yet to articulate a comprehensive policy framework that will integrate international migration into national and local development. Existing development plans of the Philippines such as the Philippines Medium-Term Development Plan (MTDP) cite the need of OFs for protection. International migration has yet to be fully and comprehensively integrated in the country’s efforts at trade, investment, employment generation, health, education, and other key development indicators.

26 FGD in Sentro Pilipino, Rome, Italy. 27 FGD in Batangas province, Philippines. 28 FGD in Pampanga province, Philippines.

66 The Italy–Philippines Migration and Remittance Corridor While there is a need for an overall development policy strategy and framework to leverage migration Leveraging Migrants’ Remittances for Development in the Philippines, what is visible in the country is a wide array of programmes implemented by the government and civil society. Some interventions attempt to create environments that enable migrants and their family members to improve their quality of life and to protect their rights and address welfare conditions. Other programmes are oriented to harnessing resources generated from migration to develop communities.

The Philippine model for migration and overseas deployment is implemented through varied but complementary strategies that can be broadly classified into three functions. The first is Protection, which includes ensuring service delivery before, during and after migration; and the critical function of migrants’ rights protection. This function is fundamental to cultivating a migration environment that supports development. The second function is Reintegration, or the implementation of direct programmes and services that will enable OFs to successfully reintegrate into the country upon their return. The third function consists of other Allied government programmes and services which provide a wide range of socio-economic options and mechanisms for savings and investments.

1. Protection of Nationals Overseas

It is the primary duty of any government, through its diplomatic posts and other agencies, to protect its nationals overseas, to ensure that their basic rights are protected or respected under local laws and well-established international conventions, treaties and protocol. In the case of the Philippines, this role is explicitly spelled out in several provisions in the Migrant Workers and Overseas Filipinos Act of 1995 (Republic Act 8042). The mandate of Philippine diplomatic officials encompasses not only its traditional role of representing the country overseas, but also the protection of migrant workers, permanent residents and, in certain cases, Filipinos who have become naturalized in their present countries of residence, as well as the delivery of a host of services to migrant workers. Along with the DFA, there are agencies performing this protection role. An amendatory act to RA 8042 clearly states that government agencies should not allow the deployment of Filipino workers to countries that do not have the laws protecting migrants, and places criminal and administrative sanctions on those who violate this.

The agencies involved with the protection of Philippine nationals overseas include the DFA; several agencies under the DOLE such as the POEA, OWWA, NRCO, the Philippine Labor Offices and NLRC; the CFO; the Department of Social Welfare and Development; SSS; and PhilHealth. For more details on what each of these agencies is mandated to do in service of migrants, please refer to Annex 3.

2. Reintegration Services

The successful reintegration of returning migrants is key to fostering migration-induced development. The efforts of the Philippine government to introduce a reintegration programme for returning workers date back to the early 1980s. Government interventions at this phase of the migration flow subsequently took different shapes and points of emphasis and engaged different sets of institutional role players.

In 1995, the promulgation of Republic Act 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act, created the Re-placement and Monitoring Center (RPMC) to implement a comprehensive

67 programme of reintegration. At this stage, the government recognized the interrelated roles of other mainstream agencies in government and the private sector to enhance the environment for productive reintegration of OFWs. An open information flow on market prospects and opportunities, the need to train OFWs, the need to promote savings and investment, and understanding other employment options were all listed as critical factors. Yet the RPMC was unsuccessful as it did not come with a budget and an organization to exist functionally. An attempt to operate it from ad-hoc provision of resources in the late 1990s failed.

In 1999, the Public Employment Service Offices (PESOs) were institutionalized. The Philippine government mandated the provision of reintegration services for returning Filipino migrant workers at the LGUs. Ten years after RA 8042 was passed, in 2005, Executive Order No. 446 was signed. The Secretary of Labor and Employment (DOLE) was authorized to oversee and coordinate the implementation of various initiatives for the welfare of OFWs.

For years, OWWA assumed responsibility for such reintegration programmes. OWWA family welfare officers meet returning migrant workers and encouraged the formation of Overseas Filipino Workers Family Circles (OFCs). OFCs are associations that are composed of former migrant workers, current overseas workers, OFW spouses and other family members. Many of them are organized as cooperatives. As of 2008, OWWA has an estimated 2,200 OFCs in its registry. The Regional Welfare Offices of OWWA handle loan facilities for migrants and their families. An example of this is the OFW Groceria Project 29 that hands out PHP 50,000 (USD 1,085.64) worth of loans in the form of groceries at zero interest. In 2007, some 224 OFCs handed out Groceria loans worth PHP 41 million (USD 890,223).

National Reintegration Center for OFWs. Pursuant to DOLE’s Department Order 79-07 issued on 2007, the NRCO was established. It essentially assumed the functions of the Re-placement and Monitoring Center. NRCO works to implement programmes and services that will facilitate the productive and sustainable personal, economic and community reintegration of OFWs and their families to Philippine society. This is being accomplished through the promotion of information about reintegration options, linking and networking with stakeholders and service providers, and capacity-building and capability enhancement. The NRCO aims to centralize reintegration services and to become the service The Italy–Philippines Migration and Remittance Corridor networking and information hub of reintegration needs and efforts. For more details about NRCO, please refer to Annex 4.

Entrepreneurship support. The Department of Trade and Industry (DTI) is an important agency that could guide OFs’ aspirations in setting up enterprises in their country. However, the department currently does not have a regular or permanent programme for OFs. For the meantime, given the global economic crisis, the DTI and the Philippine Trade Training Center (PTTC) have been organizing entrepreneurship seminars as part of DTI’s Comprehensive Livelihood Education and Entrepreneurship Program (CLEEP) for displaced homeland and overseas workers. PTTC is organizing a seminar called “Starting a Business for OFWs (Overseas Filipino Workers): One Person, Multiple Careers,” which intends to teach OFs steps in setting up new enterprises (Philippine Trading Center, 2009). For more information on DTI programmes, please see Annex 4.

29 From the OWWA website, http://www.owwa.gov.ph/.

68 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development Credit windows for overseas Filipinos. The government has an array of livelihood loan facilities administered by government-owned banks, attached bureaus, departments and ministries. An example is the National Livelihood Development Corporation (NLDC) which was formerly the National Livelihood Support Fund under the state-run Landbank. NLDC, in partnership with the OWWA, runs the Livelihood Development Program for OFWs (LDPO). Active or former OFWs wishing to start a business or former OWWA members who wish to start a business may apply for a loan. Family members are also eligible with a limit of one immediate family member per OFW. A maximum of PHP 200,000 (USD 4,3142.54) loan is available for individual borrowers and a maximum of PHP 1 million (USD 21,713) loan is available for a registered group with at least five members. Borrowers have to pay a one-time facilitation fee of 3 per cent as well as annual fees (9% interest and a 2% service fee) for the duration of the loan.30 NLDC and OWWA have designated conduit groups (e.g. cooperatives, rural banks and MFIs) nationwide to disburse and handle LDPO loans.

30 Land Bank of the Philippines, www.landbank.com/subLBP_livelihood.asp.

69 Text Box 4: A workers’ resource centre in the host country

With the Migrant Workers Act of 1995, the Philippine government mandated several embassies and consulates to establish the FWRC.

The FWRC could help improve the occupational mobility of Filipinos in Italy. While the FWRC is primarily a transit centre for Filipino workers who are in distress, it has also become a meeting place for Filipino organizations and a centre for skills development and reintegration efforts. As such, the FWRC is an ideal mechanism and forum for the Philippine community, led by the DFA and the Labour Attachés, to discuss the issues and obstacles relating to occupational mobility Filipino workers in Italy face. It can also share information about educational services and skills training provided by Italian government and non-government agencies that are open to foreign workers.

There are currently 20 FWRCs overseas. They are managed by the Philippine labour attachés and welfare officers from OWWA. In Europe, the only FWRC is in Athens, Greece, yet Athens has fewer Filipino workers than Italy.

An FWRC based in Kuala Lumpur, Malaysia has gained the respect of many Filipino workers, most especially women domestic workers, for being a pro-active resource centre for distressed Filipino migrant workers. This FWRC is structured like a school where there are managers, students and faculty members – all Filipino workers in the host country.

Active FWRCs offer services such as:

• A skills training programme: In the case of Malaysia, the programme has its own curriculum. The programme covers about 30 courses including basic nursing and caregiving, computer technology, financial management and business development, arts for livelihood and entrepreneurship, communication and social skills, basic laws for Filipinos, character building, and arts and physical training.

• A series of special events for Filipino workers, like sports fests and beauty pageants; these are intended to bring the members of the Filipino community together. The Italy–Philippines Migration and Remittance Corridor • Information dissemination: Among other activities, they distribute handbooks that contain basic information about the norms, laws, and culture of Malaysian people and about labour arrangements for Filipino domestic workers. They also release a newsletter.

• Facilitation in the formation of a Filipino savings group: In Malaysia, the FWRC helped form the Samahang Impok Bayan (Association of Filipino Savers), which urges migrant workers to allot some of their income to savings.

70 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development D. Allied Government Programmes and Services Tapping Migrants’ Skills and Resources for Development

There are programmes, initiatives and laws being implemented by government agencies that directly or indirectly respond to specific migrant needs and seek to tap migrant capital skills and resources for the development of certain key economic sectors.

Balikbayan Program. Since the 1980s, the Philippines has been operating the Balikbayan Plus Program to lure Filipinos abroad to visit, live, spend and invest in the Philippines.31 This long-running programme offers exemptions from travel taxes as well as from duties and taxes on the purchase of items from Philippine duty free shops; the importation of personal household items for those residing permanently in the Philippines; and the importation of capital equipment for use in an enterprise in the Philippines. Although more recent statistics are not publicly available, 2003 figures from Duty Free Philippines show that about 185,000 Filipino returnees purchased an estimated USD 36 million in goods or an average of USD 195 per person (ADB, 2005). The Department of Tourism, operates the Balikbayan Program in cooperation with other agencies such as the DFA, Bureau of Immigration, Customs, DTI, and Duty Free Shop Philippines.

LinKaPil. The CFO runs a systematic diaspora philanthropy programme called the Link to Philippine Development or Lingkod sa Kapwa Pilipino or LinKaPil programme.32 Between 1990 and 2008, LinKaPil donations amounted to over PHP 2 billion (USD 43.425 million) from OFs and migrant donor organizations worldwide. Filipinos in Italy are among the donors, although a significant majority of donations come from the United States.33 Funds raised have been assigned predominantly to victims of natural disasters, education, health initiatives (including medical missions), small-scale infrastructure (e.g. school buildings, foot bridges in far-flung communities, water systems, health centres), livelihood, and the transfer of skills, knowledge and technology. One example of a project LinKaPil supported was the Classroom Galing sa Mamamayang Pilipino Abroad (or Classroom from Overseas Filipinos) which is a programme of the DFA and the DOLE that urges Filipino associations abroad to support the construction of low-cost classrooms in the country. A detailed impact assessment of these government- run migrant philanthropy programmes is needed to provide feedback to the implementing bodies so they may further enhance and expand the programmes.

31 Balikbayan refers to a returning overseas Filipino. Republic Act 9174 (amending Republic Act 6768 and signed into law on 7 November 2003 by former president Gloria Macapagal-Arroyo defines the termbalikbayan as “a Filipino citizen who has been continuously out of the Philippines for a period of at least one year, a Filipino overseas worker, or a former Filipino citizen and his or her family, who had been naturalized in a foreign country and comes or returns to the Philippines.” 32 LinKaPil has instituted a system of directing donors to where donations can be channelled, as well as outlining the list of agencies and steps to undertake before shipping donations or sending volunteers for medical missions. CFO has also produced a guide for overseas donors to facilitate the shipment of donations. CFO even encourages donors to support five programmes for LinKaPil: education, health, livelihood, infrastructure, and transfer of knowledge and skills. 33 From an interview with CFO.

71 Dual Nationality Act. In 2003, the Philippines passed the Dual Nationality Act which allows Filipinos abroad to re-acquire Philippine citizenship without abandoning their foreign citizenship. The Dual Nationality Act also restored all the privileges of the former Filipinos’ birthright (e.g. capacity to own property and to practice a profession, residence and visa status, taxation, and investments in sectors reserved exclusively for Filipinos).

The capacity for investment in areas that are restricted to Filipino citizens is one provision in this law that could translate to greater development impact for the country. These investment areas include land ownership, the exploitation of natural resources and corporate ownership in certain industries which the law requires to be at least 60 per cent- owned by Filipinos. The extent to which the Philippines could leverage this investment potential depends largely on measures established by the government to create an ideal investment environment.

However, there are some complications in possessing dual nationalities. There are tax problems arising from the migrant’s legal relationship with two countries which must be sorted out. Indeed, the Philippines already has tax treaties with Italy and 28 other countries. There are also conflicts between the legal systems of countries that recognize dual nationality and those that do not.

As of 2008, over 60,209 OFs worldwide have attained dual citizenship. Of these, 23,196 were approved at the Bureau of Immigration office in Manila, while 37,013 were processed and approved at various Philippine embassies and consulates abroad (GMANewsTV, 2009). There is no publicly available data on approved dual citizenship per country. Italy is one of the countries, however, that recognize dual citizens. Data sourced from the ISTAT show that as a whole only 1,382 Filipinos have acquired Italian citizenship from 1996 to 2004 (OECD, 2009). Evaluating Philippine Government Agencies’ Services

The government services mentioned above have rarely been evaluated by their beneficiaries. In an effort to contribute to this, the IOM–ERCOF survey included a question about the Italy-based Filipinos’ level of satisfaction with certain Philippine government agencies they normally deal with. The agencies The Italy–Philippines Migration and Remittance Corridor with relatively high satisfaction ratings are OWWA (3.54), the Labour Attaché in Rome/Milan (3.77), the Commercial Attaché (4.28), the DFA (3.40), and the Technical Education and Skills Development Authority (TESDA, 3.45). LGUs in the homeland such as the barangay (village, 3.62), or the city/municipal and provincial government units (3.54 and 3.52, respectively) also have high satisfaction ratings among respondents (see Table 53).

72 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development Table 53: Satisfaction ratings for government organizations (among those with at least 100 respondents having experience dealing with the government agency)

Number w/ Average % saying N experience dealing satisfaction “very Government organizations responding with gov’t agency rating* satisfied” DFA 330 314 3.40 10.2 Philippine Embassy in Italy 349 337 3.13 6.5 Philippine Embassy in Italy (Labour Attaché) 112 104 3.77 10.6 Philippine Embassy in Italy (Commercial Attaché) 110 81 4.28 12.3 Italian Embassy in Manila 276 246 3.19 6.9 Bureau of Immigration 304 281 3.19 7.5 DOLE 259 189 3.13 5.3 POEA 329 304 3.27 8.2 OWWA 337 313 3.54 10.5 TESDA 208 115 3.45 15.7 Bureau of Customs 234 161 2.98 1.9 NSO 301 265 3.38 9.1 SSS 287 224 3.41 8.0 Pag-Ibig 256 178 3.28 5.6 PhilHealth 275 219 3.51 9.6 National Bureau of Investigation (NBI) 241 223 3.39 4.5 DSWD 182 158 3.35 4.4 My barangay (village) officials in the hometown 237 200 3.62 12.0 My local city / municipality government back home 240 198 3.54 10.6 My local provincial government back home 208 144 3.52 8.3

Source: IOM–ERCOF Survey, 2010. Note: *Satisfaction ratings are weighted averages with 5 as “very satisfied”; 4 as “satisfied”; 3 as “neither satisfied nor dissatisfied”; 2 as “dissatisfied”; and 1 as “very dissatisfied.”

73 The results indicate that the Philippine Embassy’s Labour Attaché in Rome and in Milan (the latter being a Philippine Consulate) received comparatively high positive remarks from respondents. As part of the Philippine Embassy and Consulate, the Labour Attachés’ satisfaction ratings represent positive marks for the Philippine diplomatic office, which reaches out to the Filipino community through activities that benefit the Filipinos staying in the area. For example, the embassy in Rome initiated a Skills Training and Entrepreneurship Program (STEP) for Filipinos in Rome in January 2009, while the Milan consulate organized courses on basic computer use, care-giving and massage therapy. Additionally, there are annual Philippine Independence Day celebrations co-organized by the embassy or consulate and the Filipino organizations.

The results may reflect levels of satisfaction (or dissatisfaction) from these agencies’ services arising either from actual experiences with these agencies or from different levels of expectations that may or may not be fair or realistic. Due to time and resource constraints, further inquiries into the ratings could not be conducted. Future research about this matter could help agencies learn how they can improve their services.

Participants in the Rome Policy Dialogue suggested ways by which specific agencies can tackle the obstacles that hinder Filipinos from effectively integrating into their new communities or taking advantage of resources available to them.34

• To address information gaps, it was recommended that the Embassy and the Philippine Overseas Labor Office (POLO) assist, perhaps in coordination with Italian authorities and Filipino NGOs, in the circularization of local training programmes, including their translation to English. • Accumulated social security benefits from the Italian government could be a source of capital, but these have been left untapped due to lack of information. This could be another area where the Philippine Embassy, particularly the SSS representative, could assist. • The Philippine Embassy, in coordination with the TESDA, could initiate the accreditation of training certificates obtained in the Philippines by Italian authorities and employers. The Italy–Philippines Migration and Remittance Corridor Six government agencies were less likely to be involved in the OF affairs either because the agency is new (e.g. NRCO) or because it did not feature prominently in the various activities the Filipinos in Italy underwent on their way to becoming migrant workers (i.e. DTI, Commercial Attaché) (see Table 54).

34 Proceedings of the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor,” 19–20 May 2009, Rome, Italy.

74 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development Table 54: Satisfaction ratings for government organizations (among those with less than 100 respondents who experienced dealing with the government agency)

With experience in Average % saying N dealing with gov’t satisfaction “very Government organizations responding agency rating* satisfied” Philippine Embassy in Italy (Commercial Attaché) 110 81 4.28 12.3 CFO 168 57 3.70 7.0 Office of the President (OP) 176 68 2.62 2.9 NRCO 168 51 2.92 2.0 DTI 197 98 3.05 6.1 Pre-Employment Service Office (PESO) 105 77 3.39 3.9

Source: IOM–ERCOF Survey, 2010. Note: *Satisfaction ratings are weighted averages with 5 as “very satisfied”; 4 as “satisfied”; 3 as “neither satisfied nor dissatisfied”; 2 as “dissatisfied”; and 1 as “very dissatisfied.”

Consistent with the high satisfaction ratings of offices affiliated with the Philippine Embassy and Consulate, the Commercial Attachés’ satisfaction ratings are among the highest, reflecting the effectiveness of the services and activities the office renders. These should be replicated and further disseminated. Corollarily, the low ranking given by the migrant workers to agencies they have hardly dealt with belies the need for more vigorous promotion of the services it offers. In cases where the agency may be new, it may help to reach more of the Filipinos in Italy with the launch of segment- specific programmes, i.e. business or entrepreneurship options targeting OFWs.

In the same policy dialogue, the following discussions and suggestions arose:35

• The DTI (through the Commercial Attaché) should review its information dissemination structure and outreach, including possible assistance to those wishing to operate a business in Italy, or in spreading information on possible investment areas, or the availability of technology, training facilities, and even land and other resources to those interested in setting up rural enterprises. • Another possible DTI function would be the conduct of financial literacy training and the dissemination of warnings to Filipinos on financial scams. • The Italian Ministry of Labour added that there are yet other migrant needs such as financial literacy orientation, integration and reintegration opportunities which Philippine government agencies could address jointly with the Italian government and NGOs, including the NRCO. For instance, Philippine labour officials could coordinate with their Italian counterparts on how Filipinos could avail of their circular migration programme that features internship and training for migrant workers.

35 Proceedings of the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor,” 19–20 May 2009, Rome, Italy.

75 • The NRCO must have a visible impact on migrants overseas and diaspora groups by linking closely with OWWA and the POLO in the delivery of its services. At the same time, it may be wise for international organizations such as IOM to build the capacity of agencies such as the NRCO to provide more established frontline services and hire more personnel. E. Philippine Civil Society Organizations

There are numerous civil society and non-government organizations operating in the Philippines and overseas whose services and advocacies are related to migrant workers’ needs. Mostly these groups aim to supplement service delivery in areas where the government is perceived to be deficient or wanting. Many of these organizations serve as watchdogs in protecting migrant workers who may have been victims of abuse or exploitation at the hands of government, the private sector or syndicates, such as those engaged in trafficking or illegal recruitment. Some of these organizations have likewise embraced the mantra of migration and development, and are advocating, promoting or managing migrant-sourced economic initiatives.

Civil society involvement in migrant issues used to be limited to a few groups, but now, international migration as a development issue has gathered more interest within the OFW sector and beyond. NGOs are catching on to the realization that though they may not have programmes designed for OFs and their families, migration and development are issues so intertwined and pervasive in the Filipino consciousness that they ultimately have a bearing on the vulnerable sectors – urban poor, women and children, rural development, health and education. Civil society groups not previously involved directly with migrant issues are now discovering a convergence between migrant issues and their own advocacies.

In addition, Filipino migration has chiefly been driven by economic needs and human development opportunities – advocacy areas that are familiar to civil society. In the last few years, the following trends in civil society action for international migration have been observed:

• Civil society organizations have been addressing migrants rights issues, and re-emphasizing The Italy–Philippines Migration and Remittance Corridor the government’s obligations to rights-related conventions. • Civil society organizations oriented to migrant workers remain vigilant in promoting overseas migration as a development issue to the general public. These organizations orient other non- government and civil society groups on migration issues. • There is also increasing interest among civil society organizations to understand migration issues and how these dovetail or inform their own advocacies. There has been interest in providing financial literacy services, pilot investment mechanisms for remittances and entrepreneurship training in collaboration with the private sector. • Civil society groups involved in broader development issues are tapping migrants abroad to support their respective advocacies. • Migrants themselves have long formed organizations abroad to primarily address their socio- economic needs especially in their countries of residence, with a large number of initiatives benefiting humanitarian and socio-economic projects in the Philippines. To date there are about 6,000 of such active associations.

76 The Italy–Philippines Migration and Remittance Corridor A number of NGOs work on migrant advocacy with a focus on the promotion of migrants’ rights. Their Leveraging Migrants’ Remittances for Development work encompasses not only national but even regional and international forums. The most active include: the Philippine Migrants’ Rights Watch (PMRW), the Migrant Forum in Asia (MFA), the Center for Migrant Advocacy-Philippines (CMA), the Kanlungan Centre Foundation, the Development Action for Women Network (DAWN), the Batis Center for Women, the Initiatives for Dialogue and Empowerment through Alternative Legal Services (IDEALS), Kaibigan ng OCWs (Friends of Filipino Migrant Workers), Scalabrini Migration Center, the Kapisanan ng mga Kamag-anak ng Migranteng Pilipino (Kakammpi, or the Association of Relatives of Filipino Migrant Workers), the St. Mary Euphrasia Foundation-Center for Overseas Workers, Migrante International, and some trade unions for land- and sea-based workers. There are also new NGOs in the provinces set up to help migrant workers in their areas, e.g. in Baguio City in northern Philippines, Bohol province in central Philippines, and Davao and Zamboanga cities in southern Philippines.

There are also NGOs in the Philippines whose work centres on the socio-economic empowerment of migrants. An indication of their effectiveness is that many of these NGOs have been selected by international development agencies as partners in various migration and development projects, with their collaborations being considered the best or among emerging best practices. These include Unlad Kabayan Migrant Services; Atikha Overseas Workers Communities Initiative; ERCOF; Kanlungan Center Foundation; the Sugar Industry Foundation Inc.; the Social Enterprise Development Partnerships, Inc. (SEDPI); Go! Negosyo; and the Colayco Foundation. For further elaboration on these NGOs and what they do, please refer to Annex 5.

The various initiatives of these groups have aroused interest even among Filipinos abroad. For remitters in Italy, information about these initiatives are gathered mostly through personal interaction and the media, including websites and television. Print media (brochures and magazines) are comparatively less effective. F. Rural Banks, Cooperatives, and Microfinance Institutions

At least two thirds of OFs originate from the rural areas. Data from the 2006 Family Income and Expenditures Survey (FIES in IMDI, 2008) show that 1.6 million households of overseas migrants received some PHP 348 billion (USD 7.556 billion) in “cash, gifts, and other forms of income from abroad”. Of this amount, as much as PHP 275 billion (USD 5.971 billion) went to rural Philippines, i.e. outside Metro Manila. These “cash, gifts, and other forms of income from abroad” are all forms of remittances.

Grassroots and countryside-based financial institutions, such as rural banks, cooperatives, MFIs are major actors in poverty alleviation, as they reach Filipinos in far-flung rural areas. Rural banks play a critical role in jumpstarting the much neglected countryside. At least 42 per cent of rural banks’ portfolio is in agriculture, while 90 per cent of deposits generated are from small savers.

Another significant contribution of rural banks is microfinance. The BSP’s 2007 figures showthat the micro loans from 178 rural banks, worth an aggregate PHP 3.923 billion (USD 85.179 million), have benefited 557,169 borrowers. The savings of these borrowers amounted to PHP 1.177 billion (USD 25.556 million).

77 Rural banks. The New Rural Bank of San Leonardo in the province of Nueva Ecija has focused on programmes and services for migrants and their families. It offers customized deposit and investment products for temporary and permanent migrants, as well as microfinance and business development services to migrants and their families.

With today’s interest in remittances, some rural banks are slowly expanding or redesigning their services to reach the migrant market. Several have developed their own remittance platforms, such as the Bank of Florida in Pampanga province, while others became outlets of MTOs such as Western Union and MoneyGram. Some offer products targeting migrants, e.g. pre-departure loans and time deposit instruments offered by the PR Bank in Isabela province, the Tanay Rural Bank in Rizal province, and Bangko Kabayan in Batangas province. The Rural Bankers Association of the Philippines (RBAP), the Philippines’ largest federation of rural banks, partnered with the ERCOF in 2007 to connect OFs and their families with financial products and services in Philippines.

Cooperatives. Cooperatives are non-bank financial institutions that are tax-free. These co-ops offer economic products and social services for their members. There are over 15,000 cooperatives in the Philippines, which are monitored by the Cooperative Development Authority (CDA). Some 13,522 cooperatives nationwide have generated total savings worth PHP 16.543 billion (USD 359.194 million) and cooperative business transactions worth PHP 22,648 billion (USD 491.750 million). At least 15,362 cooperatives have reported to the CDA capital build-up resources worth PHP 6.377 billion – all covering the year 2006. 36 These cooperatives offer alternative financial and social support to migrants and their families either as direct services for the OFW members or indirectly, as financial conduits for OWWA. Examples of such cooperatives are the Philippine Cooperative Central Fund Federation (PCF) (see Table 55), the National Confederation of Cooperatives (NATCCO), and the Soro-Soro Ibaba Development Cooperative (SIDC). For more information about these groups, please refer to Annex 6. The Italy–Philippines Migration and Remittance Corridor

36 Cooperative Development Authority website, www.cda.gov.ph.

78 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development Table 55: Performance of the Philippine Cooperative Central Fund Federation for the Livelihood Development Program for OFWs Performance Summary (2005–2008)

Beneficiaries 164 approved OF borrowers 177 approved loan accounts (including those who borrowed more than once) 79 individual male borrowers and 86 female borrowers (including those with multiple loans) 12 beneficiaries with two or more approved loans, 10 of them female

Total loans approved PHP 27.625 million (USD 599,815)

Average loans Per account: PHP 156,073.44 or USD 3,389 Per year: PHP 176,562.50 or USD 3,833 (2005); PHP 164,970.71 or USD 3,582 (2006); PHP 143,050.85 or USD 3,106 (2007); PHP 136,666.67 or USD 2,967 (2008)

Source: Records of PCF (through Ms. Eunice Enriquez).

NATCCO is a secondary federation with 254 members and assets worth PHP 682 million (USD 14,808 million). It has member-cooperatives in 75 locations nationwide. Some of these co- ops also operate as outlets of Western Union. The peso value turnover of these active locations was about PHP 250 million (USD 5.428 million) total transactions. The dollar value pay-out was USD 58,634 (NATCCO, 2008 ). Their broad network in the Philippines enables them to expand beyond remittances, though some of its members (e.g. Nagkasama Multi-purpose Cooperative, Abra Diocesan Teachers and Employees Multi-purpose Cooperative, Claveria Grassroots Multi-purpose Cooperative, Sta. Cruz Development Cooperative) already have existing services for migrants and their families.37

In July 2009, NATCCO launched a Pinoy Online Fund for OFWs and microfinance projects. Set up in cooperation with German cooperative bank, Bank IM Bistum Essen (BIBE), this flagship financial service for OFs sought to encourage Filipinos to save and deposit with NATCCO to avail themselves of high interest. These savings, in turn, would be used by NATCCO’s Microfinance Innovations in Cooperatives Programme (MICOOP) that awards microfinance loans through NATCCO’s member-cooperatives. Depositors are entitled to automatic life insurance coverage, rebates, and a patronage fund upon withdrawal. The savings facility is an attempt to link remittances and microfinance and to have cooperatives assist OFs (NATCCO, 2009 ).

37 From an interview with NATCCO.

79 Cooperatives may also directly assist migrants to engage in business. SIDC, the country’s largest agricultural cooperative, is one example. SIDC handles numerous agriculture-related businesses. Just recently, with the help of Atikha, it encouraged Filipinos in Italy to invest in the cooperative’s growing egg farm business. Based on the group’s assumptions, a PHP 100,000 investment (USD 2,171) that is locked in for five years will yield a guaranteed annual interest of 6 per cent. This loan is payable on instalment. SIDC will manage the layer egg farm business and the OFW investor will be considered a communal owner of the enterprise for a minimum of five years.38

Should migrant workers wish to start a business, the cooperative can coach and guide the migrant and the migrant’s family in running the enterprise. Eventually, the OF can join the cooperative, to avail of benefits such as the mandatory savings programme and start-up business loans.39

Microfinance institutions. Microfinance is a specific economic intervention that provides micro-loans to small entrepreneurs who are living in poverty. Interestingly, the ADB (2005) notes that microfinance reached more marginalized people and the others in the informal sector than commercial banks. Portions of the remittances can be invested in MFIs for a rate of return better than commercial banks’ rates. As a strategy for asset build-up and financial literacy, the introduction of remitters and their families to MFIs can help provide these households with options for business mentoring and capital access.

The Philippines is fortunate to have a vibrant microfinance industry participated in mainly by rural banks, NGOs and cooperatives. Among the renowned MFIs are: the award-winning Center for Agriculture and Rural Development (CARD) and the Center for Community Transformation; members of MFI networks Microfinance Council of the Philippines and International Network of Alternative Financial Institutions (INAFI)-Philippines; some microfinance initiatives of cooperative federations such as the NATCCO; and the Microfinance Access to Banking Services (MABS) programme of the RBAP.

NGOs seek to link remittances with microfinance in the spirit of promoting microfinance as a viable investment channel (e.g. the Social Investment Fund of SEDPI; the facilitation by ERCOF of time deposits placed by 16 Filipinos in two European countries to two microfinance-oriented rural banks operated by The Italy–Philippines Migration and Remittance Corridor a Mindanao-based microfinance foundation, the Milamdec Foundation; the Adopt-a-Client Investment Program of the Kooperatibang Likas ng Nueva Ecija (KOOL-NE); the time deposits of BPI where migrants can open five-year time deposits; and the BPI Foundation which will hand out microfinance loans that are equivalent of the microfinance loans placed).

38 Proceedings of the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor,” 19–20 May 2009, Rome, Italy. 39 From the IOM Thursday Forum series.

80 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development For instance, INAFI-Philippines, a member of the global microfinance network INAFI, together with partner migrant NGOs and non-migrant NGOs, has been organizing conferences on migrants’ remittances and development, while some of its Philippine members began pilot projects related to remittances.40 INAFI promotes the redirection of migrants’ remittances to microfinance. However, an INAFI International study of its members found that only a third of them are prepared to handle remittances given their facilities and financial capacity.41

Several key informants admit that the microfinance sector has yet to be visibly involved with remittances. As they are a new area of engagement, albeit with potential, MFIs have yet to fully understand the dynamics of overseas-sourced remittances. Becoming a remittance conduit entails costs for the MFI. Yet microfinance advocates maintain that deposits and investments in MFIs are “better secured” since the client base is made up of small savers that disperses the risks. Possible losses are also easy to recover in MFIs since the savings offset the loans. MFIs offer a safe place to invest incomes as the returns on investments are handed out daily which further disperses risks. In addition, there is also a constant turnaround of money.42 G. Italian Efforts Related to Migration and Development

Two nationally renowned migration and development projects in Italy benefit origin countries located in the African continent. One is the Migration for Development in Africa (MIDA) programme, run by IOM, which has benefited Ghana and Senegal through the creation of small enterprises. Ethiopia has also benefited from it through knowledge-transfer activities. The other project is a set of information systems on migration that benefits the Government of Egypt: the Integrated Migration Information System (IMIS) manages regular migration flows while the Information Dissemination for the Prevention of Irregular Migration (IDOM) attempts to prevent irregular or undocumented migration.

Migration management in Italy is devolved to the country’s regional and local government units (Gallina, 2007). The decentralization also includes the implementation of migration and development projects that can involve migrant associations and their home countries. If an opportunity such as this is tapped, it can also be a way for unorganized Filipinos in local Italian communities to be recognized by the different tiers of the Italian government, or even provide grants to these migrant associations (Gallina, 2007).

Migration and development cooperation covers five themes (Gallina, 2007):

• Mobilizing economic and productive networks involving countries of origin and destination. For example, the agri-food cooperative Nextia in Emilia Romagna recruited and trained Moroccan

40 Among the INAFI members with initiatives related to remittance are: New Rural Bank of San Leonardo in Nueva Ecija province (microfinance products and services catering to overseas Filipinos); Banco Lagawe in Ifugao province (a Western Union partnership to receive remittances); Milamdec Foundation (investments of 16 Filipinos from Luxembourg and The Netherlands in the two microfinance rural banks of Milamdec, with the help of ERCOF); Kaibigan ng OCWs (a cooperative for its card-bearing members); Kooperatibang Likas ng Nueva Ecija or KOOL-NE in Nueva Ecija province (an Adopt-a-Client Investment Program (ACIP) that guarantees investors placing a minimum of PHP 5,000, locked in for two years, a 12 per cent interest, and with the money to be used as loan funds for micro-entrepreneurs involved in agri-enterprises. 41 From interviews with INAFI-Philippines. 42 From interviews with the Microfinance Council of the Philippines and INAFI-Philippines.

81 migrants in Italy, and supported a project for them to create agri-food cooperatives in Morocco to which Nextia has partly outsourced some of its production.

• Recruitment projects. This means that local communities in Italy can forge recruitment arrangements with some host communities. This approach is similar to the ones in the provinces of Canada.

• Assistance for compulsory return of migrants and vulnerable groups. An example here is the repatriation of some Albanian and Moroccan detainees, as well as Nigerian victims of trafficking from the Piedmont Region, which assisted these people’s return and reintegration in their home countries through small subsidies.

• Community development projects. One interesting endeavour is a project developed by 20 migrant associations from Bolivia, Colombia, Ecuador and Peru. With much support from private sector, research groups, foundations and cooperatives, the migrant groups created an Italian– Andean Solidarity Fund where for each euro collected by migrant associations, Italian public and private donors will donate another EUR 4 to support one social project in each country. The fund is similar to a 3-for-1 matching grant programme in Mexico that involves Mexican associations in the United States and Mexico’s national and local government agencies)

• Channelling and promoting remittance-based investments. Local officials from Tuscany worked with counterparts from Khenifra, Morocco to minimize the use of informal channels for their remittances. Meanwhile, Sicily and Tunisia collaborated to reduce the procedures for opening bank accounts. They also cooperated with a Tunisian bank to offer “twin accounts”, where a migrant’s relatives in Tunisia could receive remittances.

Filipino migrants and Filipino organizations in Europe have yet to capitalize on these opportunities. There must be willingness, commitment and coordination among the Filipino groups, including the Philippine Embassy in Rome, the Consulate in Milan, Italian and Filipino NGOs, international organizations such as IOM and United Nations Development Programme and other stakeholders. The Italy–Philippines Migration and Remittance Corridor Maximizing migration and development opportunities in local Italian communities also depends on the Filipinos’ level of integration within their communities.43 H. The Work of Filipino Associations in Italy for the Homeland

The documentation of the phenomenon of collective remittances (termed as diaspora giving or transnational migrant philanthropy) is littered with examples of migrant groups going beyond providing remittances to their households towards giving money to causes help their native countries (Opiniano, 2005). Despite their own economic needs, migrants voluntarily give part of their earnings to benefit others in countries of origin out of a desire to maintain national ties, or simply to help the less fortunate.

43 Proceedings from of the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor.”

82 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development In the Philippines, a 2003 estimate coming from the BSP (citing the old format of the Balance of Payments) shows that donations coming from OFs were estimated at about USD 218 million. Additionally, the Ayala Foundation USA (Philippines), the American India Foundation (India) and the Asia Foundation’s Give2Asia are foundations dedicated to transmitting migrant donations to the migrants’ home countries (Opiniano, 2005). The ADB (2005) study carried out a survey among OF remitters that found that six out of 10 remitters, covering various countries of destination, are interested in contributing to development projects in their home communities.

The phenomenon of Filipinos sending remittances to their immediate and extended family members displays the Filipinos’ culture of relatedness (Aguilar, 2008). This could be a cultural explanation for migrant expenses that may appear uneconomically justifiable. However, individually or collectively, Filipino overseas migrants are observed to extend their social roles beyond being migrant workers and providers to their respective households back home. Their involvement in numerous areas speaks eloquently of migrants’ contributions to their host countries, to fellow migrants, to migrant communities, and to their hometowns in the Philippines. These areas of involvement include:

• community organizing and the formation of NGOs in pursuit of specific social causes or practical service programmes (e.g. information dissemination, migrant rights advocacy, crisis and social networks, entrepreneurial and professional pursuits, training, etc.); • social assistance to distressed workers and undocumented migrants, independently or in partnership with POLO/Philippine Embassy programmes; • dialogue or lobbying with government agencies to address the needs of distressed workers (e.g. repatriation, legal assistance, redress of grievance, medical attention, welfare funds); • political activism, where possible, though the numbers remain low for overseas voting in Philippine elections; • assistance for economic empowerment (e.g. informal paluwagan schemes within Filipino organizations, entrepreneurship training); • diaspora or migrant philanthropy activities for their home communities, NGOs, foundations and other development causes in the Philippines; and • mutual help and aid initiatives created by returning OFWs (often called “OFW Family Circles”).44

The profiles of the Filipino population, as well as some survey findings presented in Chapter V reveal the desire of many Italy-based Filipinos to prioritize family expenses over occupational improvement, or at least balance personal expenses with investments and savings for family needs or retirement. These circumstances influence the management of remittance incomes and other resources.45

1. Membership in Organizations

By religious affiliation. Among respondents who are members of organizations in Italy, 66 per cent identify their affiliation as being religion/church-based. About half explained that joining these groups benefit them spiritually while another 15 per cent value the camaraderie and friendship provided by other members.

44 Figures from the Overseas Workers Welfare Administration show there are 2,246 OFW Family Circles (179 of them are federated) in the entire Philippines. These OFW Family Circles cover 16,380 men and 31,124 women, mostly based in rural Philippines. 45 Proceedings of the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor,” 19–20 May 2009, Rome, Italy.

83 By origin community/profession. Some migrants are members of Filipino associations formed according to their hometowns in the Philippines, to their communities in Italy, or to their professions. At least a third of respondents are members of Filipino groups based in Italy.

Self-help informal associations. Some Filipinos are members of informal associations. For example, some Filipinos in the town of Biella (near Milan) form cooperatives that follow the Filipino pooled savings practice of paluwagan. They regularly give EUR 15–30 each month, and the pooled funds are available for members who require temporary funding assistance (e.g. those with laid-off breadwinners, expenses for soon-to-be-repatriated Filipinos, payment for utilities for those with financial difficulties). These informal associations start among friends and their weekly meetings. Membership size can range anywhere from five to 42 members.46

It has been difficult for these informal associations to formally register, as registration requires these Filipino associations to pay taxes. Even outside of these organizations, there are Filipinos who seem contented enough with their work conditions sans extra benefits that they opt not to pay taxes.47

2. Filipino Associations in Italy as Agents of Change: Prospects and Challenges

Filipino associations in Italy provide various socio-economic services not only to migrants in Italy, but also to beneficiaries in the Philippines. These organizations’ activities can be construed as migration and development initiatives arising from a desire to help the Philippines. Arguably, the diversity of their objectives (see Annex 7) indicates the extent and maturity of understanding of migrant Filipinos about issues that must be addressed.

Furthermore, the work of these migrant associations could also be a gauge of the effectiveness of Italy’s integration policy. For instance, as Italy allows foreigners to be elected in local government, Filipinos have been seated in local positions (see Text Box 6).

Certain associations have gone into activities aimed at empowering Filipino migrants socially, politically and economically. They research and publicly advocate their issues. According to the FGD held in Rome, The Italy–Philippines Migration and Remittance Corridor one Filipino organization has been holding workshops on leadership and social entrepreneurship. Participants have emerged confident and empowered about financial literacy; they have begun to set financial goals and targets for themselves and their families, deeply analyse the social costs of migration within their families, and expressed their desire for other Filipinos in Italy to participate in the same workshops.48

For other migrants, the formation of groups in Italy is a means to assert their rights, to collaborate with Italians, and to help Filipinos access services designed to help them integrate into Italian society. The Italians perceive Filipinos to be a quiet ethnic group in terms of interacting with other organizations of migrants and to accessing integration-related services for all migrants.

46 FGD from Biella, Italy. 47 FGD from Biella, Italy. 48 FGD responses from Rome, Italy.

84 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development According to the FGD held in Biella, Italy, the concept of collective remittances or investments is under discussion, although there are contentious issues involving trust and the lack of organizing skills. The participation of civil society in dispensing sound advice would be vital here. The civil society can help foster unity amid personal or cultural differences that undermine socio-economic goals.

For a profile of some Filipino migrant associations in Italy, please refer to Annex 7.

Text Box 5: Filipino councillors in Italy as “influences” for fellow Filipinos

In Italy, cities like Rome, Florence, Perugia, Genova and Piacenza have amended their by-laws to allow migrants to participate politically in local bodies such as advisory boards, commissions, and mayors’ delegations on migration.

Filipinos have taken advantage of the opportunity for migrants to participate in local politics. In municipalities (or villages) under the commune of Rome, many Filipinos ran as consiglieri aggiunti (council adviser) in the recent 2006 elections, with several of them winning. Out of Rome’s 20 municipalities, eight Filipinos won as councillors.49 Supplementary councillors per continent of origin were also elected, and 30 members of the mayor’s consultative or advisory board on migration were chosen from the roster of non-elected candidates. Filipino elected councillors and supplementary councillors in the various municipals of Rome include Joselito Ramirez (municipal 1), the late Norma Macalindong (municipal 2), Romeo Ramos (municipal 9), Rachel Dolor (municipal 12), Pia Gonzales (municipal 16), Demetrio Rafanan (municipal 20), Romulo Salvador (Asian supplementary councillor), and Alex Mendoza (vice president of the mayor’s advisory board on migration). Rome allows five-year terms to foreigners elected as councillors. The backgrounds of the councillors vary – some are entrepreneurs and many are domestic workers.

Unlike Italian councillors, foreign (migrant) councillors cannot vote during deliberations but they can intervene during meetings and be members of three commune-wide commissions. They are also provided with an annual budget to organize projects for foreigners in their jurisdictions.

The presence of Filipino councillors has contributed significantly to the Filipino communities in areas like Rome. These councillors have passed resolutions providing for the inclusion of migrants within the civil defence body, the placement of cultural mediators in all three levels of schooling and the promotion of national identity among second-generation migrants who became Italians upon reaching the age of 18. They have also organized activities and formulated ordinances that benefit migrants in their jurisdictions (e.g. formation of a municipal- wide migration council that has representatives from various ethnic communities; opening of a front office for migrants; awareness activities about xenophobia and about multiculturalism in schools; establishment of a chess garden where Italians and migrants can interact). These endeavours extend the services to other foreign populations.

49 Only the person with the highest votes in the municipal elections, regardless of the continent of origin, becomes the consiglieri agguinti. For reference, see www.elezioni.comune.roma.it/elezioni/2006/consiglieri.

85 Continuation of Text Box 5...

Filipino councillors provide assistance to fellow Filipinos. Highly respected Filipino councillors render much more help than what is usually expected of them, performing beyond their capacities as a councillor (e.g. attending social events and private parties, informal lending of money, and counselling marital disputes). Filipinos rely on these councillors to know all the answers to migration-related questions. These councillors also provide administrative help (e.g. paper work, referrals to agencies) for Filipino migrants trying to obtain permesso di soggiorno (residence permits). The Philippine Embassy in Rome holds these elected Filipino councillors in high regard because they are a source of pride for the Filipino community. These councillors also help the embassy in activities for the Filipino community.

There are more Filipinos who have been elected as councillors in other places in Italy. Noel Gatchalian was elected in Perugia. Florence and Genova have also elected Filipinos. These councillors represent the efforts of Filipinos to be absorbed into Italian society. Given the respect they receive from fellow Filipinos, these councillors are in a good position to harness migration for development, encourage participation in financial literacy programmes, entrepreneurship training, raise awareness about the social costs of migration, and extend support to fellow Filipinos.

Information provided by councillors Romulo Salvador and Pia Gonzalez, online key informant interviews The Italy–Philippines Migration and Remittance Corridor

86 The Italy–Philippines Migration and Remittance Corridor Leveraging Migrants’ Remittances for Development Text Box 6: A Filipino migrant’s hometown with an “Italian facade”

The municipality of Mabini in Batangas province is a visible example of how remittances from Italy have brought positive and negative changes to families and entire communities. Mabini, approximately 2.5 hours drive from Manila, has over 5,000 of its townspeople residing in Italy. The “Italian facade” of Mabini is portrayed by Italian-styled villas owned by Filipino migrants and kept by their families that remain in the Philippines.

The costs and benefits of overseas migration for Mabini are summarized below:

• Higher revenues have been gathered from real property taxes and from the increased value of land and buildings.

• The construction of houses benefits local workers, but Mabini’s citizens overseas are saddled with debt to pay for the costs of these houses.

• More residents own vehicles.

• Private schools have been established, attended by children whose parents are abroad.

• Gambling is common and many residents own fighting cocks.

• Working abroad for extended durations and earning a higher income have changed the residents’ lives and cultural norms. More religious groups are being established and migrants sponsor fiestas and spend hundreds of thousands of pesos for social events. A migrant’s homecoming is often associated with frequent celebrations (weddings, baptisms, fiestas).

• Mabini has the highest cost of living in Batangas. This, along with tourism (a popular diving spot, Anilao, is located in Mabini), and the residents’ dependence on remittances has killed agriculture. Mabini now imports agricultural products from other areas.

• The separation of parents from their children, who are left in the care of their grandparents or other relatives, has given rise to serious social problems. The number of marital annulments and informal separation has also increased.

• The schools in Mabini have a high drop-out rate. Children, whose education was initially supported by remittances, have stopped attending school as they are being petitioned to go to Italy. When they move abroad, few continue their studies because of cultural and language difficulties.

• The electorate population in Mabini has shrunk.

• The municipality has begun to implement migration and development initiatives with the support of a local NGO, Atikha Overseas Workers and Communities Initiative, and several Mabini associations composed of migrants.

Source: Presentation of Nilo Villanueva, Mayor of Mabini, Batangas, during the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor,” 19–20 May 2009, Rome, Italy.

87 VI. Recommendations

The information and data gathered by this research indicate the presence of several key factors that offer excellent prospects for leveraging migrant remittances and resources to promote community and national development by improving the Italy–Philippines corridor. These are:

• a large and steady stream of income and remittances that flows through the Italy–Philippines corridor, which is supported by the strong use of formal remittance channels among migrants; • keen interest of Italy-based migrants to contribute to their communities; • Italy’s immigration laws, which are based on the principle of upholding equality and migrant rights, that provide basic services to migrants and innovative activities in the area of migration and development with African countries (may be replicated in Asia); • the Philippines’ elaborate and well-developed overseas employment management system, which includes pre-departure orientations, programmes working for the orderly deployment and the protection of migrant nationals, and a fiduciary migrants’ fund that provides for emergencies affecting migrants as well as reintegration services; and • numerous non-government agencies and civil society actors that offer various products and services designed to respond to migrants’ basic needs and some of the emerging practices that may serve as good practices.

Such a combination of favourable factors in the Italy–Philippines corridor is critical to surfacing good practices that are worth replicating and can even be further enhanced. For this reason, a number of recommendations are offered to stakeholders and policymakers to achieve goals in migration that would: benefit migrants, their families and their home communities; mitigate socio-economic costs; and support the economic and development objectives of the Philippines.

The first set of recommendations concerns existing programmes and services that could be strengthened

The Italy–Philippines Migration and Remittance Corridor to leverage migration and remittances for community and national development. It expounds on ways to improve financial literacy, reintegration support and other existing services to better assist migrants in their remittance management, entrepreneurial endeavours and philanthropic activities in order to direct remittances to local communities. The second set of recommendations concerns incorporating the migration context into the Philippines’ development perspective and methods to create a policy environment that will maximize the benefits of migration. The third set of recommendations concerns the creation of an enabling financial environment for migrants and other stakeholders. Finally, the fourth set of recommendations highlights the bilateral working relationships of the Philippines and of Italy to achieve socio-economic goals.

88 The Italy–Philippines Migration and Remittance Corridor Recommendations A. Enhancing and Strengthening Philippine Government Programmes and Services

1. Imparting Financial Literacy / Knowledge to Migrants and Their Families

The survey findings suggest the need for services that enhance financial knowledge among Italy-based Filipino migrants, many of whom save but often do not keep track of their income and expenditure and have little knowledge of how the remittances are spent by family members. A large number of migrants do not seem to be fully aware of the various investment options beyond bank deposits and real estate, as well as ways in which income and expenditure can be budgeted for future needs. Since 2007, the BSP has been running a Financial Literacy Campaign (FLC) in selected Philippine provinces and cities abroad. The POEA and the OWWA have been giving short lectures on financial planning, remittance management and reintegration at their PDOS. Private institutions such as banks, stock exchanges and financial consultants are running their respective fee-based orientation sessions for prospective investors or depositors. Several development NGOs promoting entrepreneurship and investments in social enterprises provide guidance to returning OFWs. The Colayco Foundation and the Go! Negosyo movement have been advocating and operating highly publicized programmes that promote entrepreneurial values among Filipinos. However, because measurable performance indicators have not been identified, it is difficult to evaluate how many have actually been helped by these initiatives and how sustainable and relevant these activities are in relation to the objective of building the capability and self-sufficiency of migrant workers in the long term.

The research observed certain gaps that must be addressed to push for a sustainable results-driven financial literacy (FL) programme. These include the following: a) Programme Curriculum Integration. A clear programme framework and objective must be defined and disseminated to implement a FL programme aimed at harnessing the development potentials of remittances. This is necessary to ensure a coherent and relevant programme that reaches a wider range of clients and locales, and to be cost effective. The FL should include guides on how to channel remittances into savings and investments such as:50 (a) passive investments in capital and property market; (b) active investments in social enterprises, small and medium enterprises and other entrepreneurial investments; (c) life, property and pre-need insurance; and (d) development-driven philanthropy. It is necessary for migrants to have an overall understanding of finances so that those among them interested to invest or contribute to their communities can build a portfolio from various options. Ultimately, the migrants and their beneficiaries maintain the right to dispose of or allocate the earnings as they see fit.

In this regard, the standard FL training module developed by the NRCO and Atikha (an NGO), in close consultation with the BSP and the IOM, builds financial management knowledge and skills while being sensitive to the social obstacles to savings and investments and the productive

50 Proceedings from of the IOM Thursday Forum Series.

89 reintegration of migrants. The intensive training combines lectures, interactive knowledge sharing, financial exercises, skills orientation and demonstration, and simulation activities. It uses a mix of reading materials, audio-visuals and workbooks (such as financial planners). This type of programme should be supported.

b) Programme Localization. The centralized management of PEOS and PDOS respectively should cascade down to the local government level. Local government services should be a source of information for both migrants and those considering migrating for work. LGUs should provide information regarding migration realities, the social and financial costs of migration, alternative options to migration, remittance procedures, and a manual or curriculum developed as a guide. Current pre-departure orientation caters only to those who already have contracts and are ready to depart.

c) Incorporating and Sustaining Basic Financial Literacy Training. Incorporating a programme into an existing system or into an institution with adequate legal mandate, structure and regular budget is often the best way to sustain it, provided that the institution assumes ownership of the programme and asserts its commitment. It is recommended that the financial literacy training be incorporated and adapted appropriately into the following programmes:

• OWWA’s overseas programmes abroad should operate under the institutional umbrella of the POLO, which benefit OFWs in host countries, while its regional and provincial programmes in the Philippines benefit the relatives and returning. Its PDOS should tackle concerns not only about the destination country but also topics in basic financial literacy, remittance transfer procedures, and savings and investments. PDOS should be conducted at least one month before the scheduled departure;

• NRCO’s reintegration counselling programme;

• POEA’s continuing education programme for recruitment agencies, which should oblige the recruitment industry to institute financial learning modules and PEOS for the workers it sends The Italy–Philippines Migration and Remittance Corridor abroad.

d) Programme Monitoring and Evaluation. Existing FL programmes are not subjected to a thorough evaluation process that measures effectiveness and identifies areas for improvements. It should also monitor the competency of the trainers. It is highly recommended that existing FL services incorporate a monitoring and evaluation process and disseminate the findings.

2. Reviewing Reintegration Processes and Services

The survey found that many Italy-based Filipino migrants who have been working in Italy for many years have little or no exposure to reintegration assistance or similar support, even though most of them plan to return to the Philippines when they retire or reach old age and desire to start a business upon so returning. To address the migrants’ needs, the NRCO was created in 2007 to assume the task of implementing the reintegration programme. There have been several attempts to promote a

90 The Italy–Philippines Migration and Remittance Corridor Recommendations reintegration programme for OFWs but none have been successful in encouraging return migration. The NRCO faces the challenging task of assisting returning migrant workers in gaining employment at Philippine companies with wages lower than what they were used to, or in becoming self-employed entrepreneurs under a business environment that many lament as bureaucratic, frustrating and corrupt.

The success of reintegration does not depend solely on the NRCO. Bigger players in industry and government bureaucracy define the climate in which NRCO struggles to produce results. The NRCO must continue to facilitate the access of returnees to opportunities and develop a bottom-up approach. Moreover, it has cooperated with the Philippine private sector – not only with big business and financial institutions, but also, and most especially, with grassroots financial institutions (e.g. rural banks, cooperatives and MFIs) and civil society organizations.

The policy of reintegration must be reviewed with the idea that overseas employment is a temporary solution to the lack of jobs in the Philippines. The message must be declared in no uncertain terms, promoted as policy and practice, and explained to aspiring migrant workers. It is a concept they should understand before they are employed, before they depart, during their time as migrant workers and upon their return.

The NRCO needs to operate in close cooperation with OWWA which has the larger regional, local and overseas infrastructure to execute programmes. However, the NRCO needs structural support. It needs core staff and regular budget to produce results.

There is neither reliable data about returning migrant workers nor systems that monitor and record their occupations, skills proficiencies, income levels or fields of industry. These are vital and strategic information necessary for a serious reintegration programme by the Philippine government. Under the current data collection mechanism, it is not possible to know whether migrants return for short visits, between or at the end of their contracts, or for other reasons (e.g. illness). Though the Philippines immigration entry/departure card asks for the returning migrants’ clearance numbers and the reasons for their return, this data is not scanned, compiled or systematically analysed. The Bureau of Immigration, Department of Tourism, POEA, OWWA, and DFA must collaborate to make better use of the information and create a system that can capture more data about returnees. A similar service could also be established in diplomatic stations overseas to better provide reintegration support before workers make physical return home.

3. Tapping the Migrants’ Welfare Fund as a Source for a Development Fund

The Migrants’ Welfare Fund is now estimated at PHP 10 billion. It is a fund built on the contributions of deployed workers, which finances OWWA’s operations and the salaries of its personnel. Part of the fund is invested in government securities, and part of the interest earned is allotted for migrants’ contingencies.

The Migrants’ Welfare Fund could subsidize a programme that links migrants to entrepreneurial, savings, investment and retirement options. However, due caution must be given in considering this as OWWA’s past experience on extending livelihood and enterprise loans was marked by low repayment rates.

91 The following are specific areas where OWWA could venture into:

• funding or supporting a financial literacy programme which includes refining standard modules, producing learning tools, training more instructors (starting with its own officers and staff in the regions, provinces and abroad, then continuing with its NGO and civil society partners), running the programme in cooperation with LGUs, the academe, and other community-based centres; • running or supporting a mass media advocacy campaign that discusses migrant issues and concerns and keeps the audience informed about different services, opportunities and options; • establishing a Memorandum of Agreement with those who give pre-departure orientations to expand the curriculum with topics on financial planning, remittances, savings, investments, retirement, real estate, pre-need and social security and providing this curriculum for all departing workers and their families; • offering a seed-fund for migrants’ cooperative investments or entrepreneurial projects following a set of criteria for grants or loans; and • establishing such criteria for grants and loans that heed benchmarks for financial equity, product and market feasibility, technology transfer contributions, local enterprise growth and government-determined priority industries.

4. Improving Local Environments for Migrant Entrepreneurship

While some migrants have actually invested in businesses in the Philippines, the IOM–ERCOF survey results reveal that many of the decisions are made with limited knowledge of other available options. The FGD sessions also revealed that OFs are targeted by scams soliciting investment on non-existent real estate. The promotion of entrepreneurship among migrants must consider developing its cooperative arrangements with government entities, the private sector, civil society and other service providers to address the following:

a) Improving the local information system about entrepreneurial and business opportunities, The Italy–Philippines Migration and Remittance Corridor profitable ventures, project roll out procedures and business-licensing. The use of websites, business journals and other mass media outlets should be considered.

b) Processing and analysing the experiences of migrant Filipinos in Italy to extract valuable lessons that can be applied to the local setting:

• Engage well-established local enterprises into business partnership agreements with migrant investors to strengthen local relationships and create effective supply chains. • Innovations in developing entrepreneurship in migrant communities should integrate physical infrastructure for local production. • Disseminate information about rural banking and microfinancing and help remitters and other potential investors understand the scope their products and services in comparison with commercial banks and other popular lending institutions. • Introduce progressive stock-building in cooperatives by depositing investments through instalments to make investment options more affordable or manageable for the investor. An

92 The Italy–Philippines Migration and Remittance Corridor example of this experience has already emerged from a number of OF investors from Batangas Recommendations involved in the SIDC. • Because of how they function, rural banks play a vital part in initiating investment and entrepreneurship, and building financial credit. The BSP has authorized rural banks to handle foreign currency accounts and trust functions. While they are currently only payout agents for MTOs, soon, when the BSP’s PhilPaSS programme rolls out, rural banks will find ease in opening correspondent relationships with foreign banks. This will make it theoretically possible for migrants to send remittances directly to rural bank accounts near their hometowns, and at a fraction of the present remittance costs. • The survey indicated that 91 per cent of Filipinos in Italy will want to return home upon their retirement from overseas work, with a large number planning to settle in their communities of origin and start a business. Local governments should prepare for this eventuality and study how to match their investment plans with local enterprises. This reintegration campaign could start while these prospective returnees are visiting home. A model that could be good for replication is the province of Bohol or the City of Samal, both of which have Investment Incentives Ordinances for its expatriates.

B. Strengthening the Migration and Development Framework and Migration Policies in the Philippines

The Philippines is known for its systems of managing the migration of Filipinos. This is supported by an institutionalized market development programme, the regulation of recruiters and employers, welfare funds and assistance programmes for OFWs and their families, legal options allowing an abused worker to file a complaint and various other programmes that promote human rights, gender sensitiveness, accountability, health and safety for migrants. The Philippine government’s policy articulates that migration is an individual’s choice and a reality that will continue in the long term.

Remittances are highly regarded in alleviating poverty among marginalized households and enabling these families to access education and health services they could not afford otherwise. Some argue that remittances fuel consumption which keeps the economy, especially the service sector, afloat. However this has bred a culture of migrants and a dependence on remittances that may be observed not only among migrant households but also in the Philippine macroeconomy.

The research found that various sectors are only starting to become more aware of the crucial gaps in the policy framework of the Philippines’ migration governance. The country’s political leaders face challenging demands for policy reforms on migration. It is important to recognize and review the negative developmental impacts of migration, such as the phenomenon of “brain drain” and the creation of dysfunctional families and communities. These affect not only the macroeconomy, but also the national psyche, or the capacity of Filipinos to believe in themselves.

93 This report shall now outline the various recommendations that could address these issues:

1. Review of the Overseas Employment Paradigm

There must be a paradigm shift from conceptualizing that overseas employment is a temporary option towards the perspective that labour migration is here to stay. Labour migration allows for workers to be productively employed and to achieve financial and social goals within a period of time. This allows migrants to acquire knowledge and skills, build on savings, capital and investments, and provide social security for themselves with a view to the migrants’ productive reintegration at the soonest possible time. Such a shift in thinking should promote the adoption of development timelines among Filipino migrants, with methods to identify goals, monitor gains from migration and reinvest these gains in the country.

Overseas employment must not be seen as an irreversible decision for migrant workers. The present culture of viewing overseas employment as the road to greener pastures tends to trap migrants into indefinite or permanent situations overseas, which drains the country of intelligent, talented and capable citizens; undermines the vast potential of these citizens; and disregards the gains of migration that can be invested back home. While recognizing the rights of migrants for labour mobility across the global market, the governance of migration must not stop at facilitating their movement and stay in destination countries but must include the empowerment of migrants for productive reintegration in their country of origin.

There is need to redirect attention away from contentious provisions pertaining to migration and development, such as the policies articulated in the Migrant Workers and Overseas Filipinos Act of 1995 (also known as Republic Act 8042). After years of debate, there is neither a solid foundation for cooperation nor a shared understanding of how to leverage the gains of overseas employment to attain development goals. Many argue that RA 8042 is a predominantly migrant protection law and not a development policy instrument. A proactive and multisectoral involvement in the preparation, implementation and monitoring of the next Medium-Term Philippine Development Plan (MTPDP) will be a more constructive option. The Italy–Philippines Migration and Remittance Corridor

2. Integration of Concrete Milestones Concerning Migration and Development into the MTPDP

The MTPDP must integrate clear migration elements that not only recognize how migration alleviates unemployment in the Philippines but also how it cuts off the best-skilled workers during their peak productive years from the domestic market economy. Migration affects different development factors such as markets, economies, industries, trade, finance, human resources, health, education, technology, international relations, social welfare, gender, local initiatives, tourism, human mobility and infrastructural improvements. The next MTPDP (2011–2017) must clearly show how migration is considered in each of these areas and incorporated toward key development goals.

94 The Italy–Philippines Migration and Remittance Corridor Recommendations National and local governments must improve on a working understanding of the nexus between migration and development. Some thematic areas suggested are the following:

• harnessing the development potential of remittances beyond consumption-related flows by directing them to savings, investments, entrepreneurship and development-directed philanthropy; • showing the local governments how their communities can benefit from migration and how they must share in the responsibility of managing the reintegration of migrants; and • identifying, understanding and building mutual interests regarding the circular migration between sending and receiving countries; this entails bilateral negotiations that explore and address the needs of employers and the concerns of workers in employing countries, while recognizing migrant rights, preventing brain drain and promoting productive reintegration of migrants in their countries of origin.

3. Policy Advocacy

The links between migration and development frameworks must be advocated among policymakers, governing boards, regional and local development councils, civil society and the private sector. The National Economic Development Authority (NEDA), which maintains the mandate for development policy, can provide the technical leadership. NEDA should work closely with DOLE and the DFA, particularly on issues and recommendations discussed in the Global Forum on Migration and Development (GFMD).

4. Access to Information

It would seem that the Philippines, as a sending country, has a well-rounded system consisting of laws, deployment procedures, programmes serving migrants’ basic needs, and both public and private sector services that offer skills and financial training and options. While these are commendable, there remains a concern if enough migrants and their families have access to the necessary information and have actually used it for their benefit. Much of the information is found in websites and the providers’ offices. However, the study indicates that websites are not as effective as personal interaction, television, and newspapers in disseminating information. There must be a multi-media awareness campaign about all these products and services that serve the migrants’ basic and socio-economic needs. This is especially true for those dealing with savings, investments, entrepreneurship, and skills training. Philippine embassies, consulates and diplomatic stations could serve as repository and purveyor of this information, together with the cooperation of civil society organizations and Filipino television networks such as ABS-CBN and GMA 7, which are available in Italy.

C. Improving the Investment Environment for the Productive Flow and Collection of Remittances

With the recognition that the remittance practices from Filipinos in Italy show a potential for generating collective resources for socio-economic and humanitarian objectives, it is important that leadership and guidance be provided to achieve greater economies of scale. The NRCO was founded on the need for

95 interventions that maximize remittances to create a sound investment climate for the eventual return and reintegration of OFWs. The DOLE has articulated the promotion of larger social goals among OFWs to redirect remittances from limited benefits for individuals and households toward the community and the country as a whole. Along these lines, this study proposes the following:

1. State Development of OFW Bonds

Government bonds are financial products where a portion of remittances could be invested. Bonds are sovereign financial instruments guaranteed by the government. They feature returns on investment higher than those promised by banks. They are ideal savings and investment options for OFWs, as they could be offered at small denominations that are financially affordable, and at terms and conditions easily understandable to OFWs. The most important feature is that payment is guaranteed by the government. In the first half of 2010, the Philippines began selling bonds specifically catering to migrants, called “OFW bonds.” By April 2010, the Philippine Bureau of Treasury had sold USD 416 million worth of Fixed Rate Multicurrency Retail Treasury Bonds. Of this total, USD 355 million are in US dollar- denominated bonds and PHP 46 million are in euro-denominated bonds. As this is a new initiative, it would be important to monitor its progress and eventually evaluate whether it produces significant gains to migrants and the Philippines or, as Philippine exporters argue, whether it begets detrimental effects on the macroeconomy in the long term.51

2. Pre-Need and Insurance Products

There is a dire need to restore the confidence of the public in the insurance industry, which has operated progressively in the last three decades. The passage of the pre-need law is critical to achieve this goal as it will set forth the regulations needed to reassure the investing public about the safety of their insurance plans. The bond-like obligations of pre-need firms securing future or contingent needs such as education, health, pension, property, and life coverage of its plan holders or their designated beneficiaries have the potential to be of great financial impact. As these funds are collected, accumulated and reinvested in legally allowable investment forms, these collective forms of remittance investment can be managed for capital growth and development-driven spending. An OFW who is adequately The Italy–Philippines Migration and Remittance Corridor covered by this type of financial protection is less likely to be financially dislocated when crisis or major financial obligations set in. With Italy-based Filipinos who earn their wages quite stably, the payment of premiums for such investment forms is hardly an issue. The survey in Italy reveals a total of 10 per cent of respondents invested in educational and medical plans and social security. However, for the majority, either they not been introduced to the strategic advantage of investing in this sector or have been discouraged by this market because of scams that have plagued the industry.

3. Migrant Philanthropy

Taking advantage of the generous environment for migrant donations, local governments could create comprehensive local development plans as a guide to community-oriented donation flow. Findings

51 Exporters expressed dismay over the OFW bonds, arguing that it will make the peso stronger against the dollar. For the OFWs, this means that the dollars they earn are devalued by a lower exchange rate.

96 The Italy–Philippines Migration and Remittance Corridor Recommendations from this study point to the inherent capacity of Filipinos to contribute to the common good – be that for a charitable purpose, helping disaster victims, or lifting poor children off the streets and educating them. There is a list of approximately 6,000 Filipino associations active in raising funds for such purposes. These initiatives are driven by the particular interests of members. With the exception of a few, they are special purpose projects and resources are remitted informally to the beneficiaries.

Studies and experiences from some of these associations indicate that chances of success and sustainability of diaspora philanthropy projects are increased when there is a partnership between an overseas and a local organization. OFW donors value accountability and trust, and it is necessary to establish mechanisms that provide monitoring and feedback to encourage more donations. Such systems endow OFWs with a sense of participation, ownership and personal satisfaction over the projects.

The CFO is a Philippine government agency that is a virtual one-stop-shop for information, programmes and networks providing cultural and economic ties between OFWs and the Philippines. It aims to establish productive roles for OFs. The CFO’s work could be strengthened by providing it with higher budgetary support to enable it to improve its human resources and technological machinery, and to deploy staff abroad to better coordinate with diaspora associations. Revamping this agency and localizing its operation overseas have the potential of organizing and cultivating diaspora philanthropy. In professionalizing its work, the CFO must institutionalize systems for transparency, accountability, donor and beneficiary outreach, monitoring and evaluation.

D. Enhancing the Banking and Remittance Environment of the Italy–Philippines Remittance Corridor

The central banking authorities of Italy and the Philippines, in consultation with major stakeholders, are pursuing a wide range of policies and programmes to ensure progressive advancements in banking systems and greater financial inclusion of the public, and to prevent the illegitimate use of financial institutions and remittance channels. By issuing regulations, supporting legislation and disseminating public campaigns, there have been significant advances in consumer education, the financial inclusion of migrants, bank protection, capturing remittance data, identifying issues on remittance and finance, promoting healthy competition among financial service providers, and measures for rationalizing financial transaction costs.

In the last few years, Italy has made considerable progress in establishing a more reliable remittance system that monitors and promotes the use of formal channels and in its enforcement of the country’s AML laws. Other programmes currently in place include: • the improvement of remittance data by including MTOs into the reporting system and addressing regional differences in reporting remittance figures; • the creation of a National Action Plan on Remittances, and piloting the plan on a per country level coinciding with partnerships by Italian banks with banks in origin countries, such as Albania and the Republic of Moldova; • the promotion of innovative remittance products that are low or reasonably priced and are more accessible (e.g. mobile phone, Internet or payment card systems); and • taking the lead in international forums of developed countries to lower remittance charges. 97 1. Actions for Italy

a) Filipinos are the sixth largest migrant group in Italy and their remittances from Italy rank third, after the Chinese and the Romanians. With such significant presence of Filipino nationals, the existing National Action Plan on Remittances should include the Philippines as one of its target countries. Furthermore, there must be strategies for collaboration among the national and local governments of the two countries, as well as their financial institutions.

b) While the remittance data system has been improved upon in the last few years, inconsistencies still remain surrounding the remittance figures between the origin and the destination countries. The collaboration between the central banks of both countries should identify the causes of these discrepancies to align the figures.

c) Competition among remittance service providers should be continuously promoted. This research identified that Filipino banks all offer a remittance fee of approximately EUR 8, differing marginally only with regard to delivery time and foreign exchange spreads. This must be examined to determine whether it reflects the presence of healthy market competition or a lack of it. Although migrants who use remittance services seem to be quite indifferent to service costs, the current tendency towards homogeneity in price and service inhibits industry innovations and interest in providing more affordable options.

d) The research noted that Italy-based Filipinos most commonly use Philippine banks to send their remittances home. Many migrants also rely on banks for information on savings and investment options. However, it is important to note that these Philippine banks are registered in Italy as remittance service providers and their license is limited to remittance functions. Taking into consideration the sensitivity of this issue, it is nevertheless important to empower Filipino migrants to become more financially literate and aware of their options even if Philippine banks are not yet able to provide actual savings and investment services in Italy.

e) Devolve financial literacy education down to the local governments in Italy and support civil society organizations engaged in migrant integration programmes, placing importance on training in The Italy–Philippines Migration and Remittance Corridor financial matters, enterprise, skills and knowledge acquisition, organizational development, and orientation on formal remittance channels and comparative rates and services.

f) There is value in encouraging the linking of cooperatives in Italy and the Philippines. The participation of migrants and their families in cooperatives could support the use of formal channels of remittances and assist in the administration of benefits. This can begin under Italy’s efforts at migrant integration and at directing migration towards development goals. The Philippine government could broker this partnership, starting with the sharing of information between Italian and Philippine co-op federations, which could then mature into collaborations and tie-ups. An example of this is the partnership between the Pinoy Online Fund for OFWs, the microfinance programme of the NATCCO and a German co-op bank.

g) Promote migrant-related development projects between the local governments of Italy’s host communities and the Philippines’ home communities. These can be supported by the private sectors, civil society groups and embassies of both countries.

98 The Italy–Philippines Migration and Remittance Corridor Recommendations 2. Actions for the Philippines a) BSP, the Philippine central bank, has initiated a programme that directs remittances to more productive uses. To elicit ideas and recommendations, the central bank should engage banks, MTOs, telecommunications companies and other industries that have a stake in how this programme should be implemented. b) Enhance transparency and promote competition among remittance service providers. Banks and MTOs should be required to post the costs of remittance services and other charges. The central bank can maintain an OFW portal in its website that reports all information on remittance providers, their products, services and related costs. The BSP’s Consumer Expectations Survey could include a mechanism to gauge consumer satisfaction with remittance services. c) Remittance systems through mobile phones must be further developed and information about how it works should be better disseminated to the public. d) Proceed with the mainstream adoption of the PhilPaSS, which can help lower transaction costs. Raise the public’s awareness of the PhilPaSS and its benefits and work on increasing subscription. e) Promote migrant investments in financial instruments such as government securities, long-term negotiable certificates of deposits and retail treasury bonds. Sometime in2010, the BSP will implement the PERA Law which offers tax incentives on certain investment products. f) As explained in item 6 on the previous section detailing Actions for Italy, the Philippines should do its part in developing a working relationship between cooperatives in Italy and the Philippines. E. Creating an Enabling Environment for Filipino Migrants in Italy

In a globalized society, migration has proven to be beneficial in compensating for deficits in labour and the working population in destination countries, and for deficits in economic opportunities and human development in origin countries. Migrants have responded positively to reforms in the integration processes, the stabilization of migrant status, the opportunities for family reunification, and the capacity-building initiatives that some – but not all – receiving countries are adopting.

Italian legislation, practice and tradition have a marked trend for being pro-labour and migrant-friendly, which provides democratic space where migrants are given educational opportunities and allowed to operate small businesses and establish cooperatives and labour unions. The Philippine experience lends testimony to this observation. However, as with most migrant-receiving countries, Italy exerts efforts to manage the flow of foreign migrants with cautious migration policies based on domestic labour needs, political realities, and its commitments as a member of the EU and the international community. Moreover, Italy must contend with real or perceived issues associated with the influx of international migrants. Problematic issues include illegal migration, the rise of criminality and terrorism, and inordinate demands on public services.

99 The report presents the following recommendations to the stakeholders in the Italy–Philippine remittance corridor:

1. Strengthening Support for Migrant Integration

Initiatives should highlight that successful integration benefits Italy and the Philippines mutually. A significant population of Filipinos in Italy has acquired permanent resident status. Italian local governments, civil society and Filipino migrant associations must cooperate in various programme areas such as:

• counselling services concerning migrant status, social security entitlements and eligibility for citizenship to provide migrants with critical information for important decisions; such information will lead migrants to relative stability and improvement in their productive capacity, which in turn will foster a reassuring labour situation for Italian employers and businesses; • encouraging Filipino migrants to avail themselves of formal Italian language courses to improve the Italian workplace, by increasing productivity, raising efficiency and minimizing workplace disputes; • encouraging unemployed Filipino migrants, particularly the unoccupied youth and adult dependents, to acquire entrepreneurial training offered by Italian institutions, which would convert them into assets to the Italian economy, rather than a resource liability; • facilitating access to employment assistance or internship programmes to provide opportunities where Filipino migrants can learn while they earn; • administering cross-cultural orientation to mitigate sociocultural maladjustments, especially among the children of Filipino migrants.

2. Cooperation among Labour Sectors

The Philippine labour office in Rome, with the help of Filipino NGOs, should explore and foster relationships between OFW associations and Italian unions to benefit from the collective bargaining The Italy–Philippines Migration and Remittance Corridor agreements with the Italian Employers’ Federation.

The Italian and Philippine governments and professional organizations should gather information and discuss the possibility of Mutual Recognition Agreements in occupational areas where human resource deficits are apparent to professionalize the migrants’ occupational credentials in the Italian labour market. The Philippine government, through the DFA and the Philippine Embassy in Rome, in close cooperation with the DOLE, TESDA, Commission on Higher Education and Professional Regulation Commission and with the assistance of Italy or EU-based Filipino associations, should:

• advocate and work for the passage of Italian legislation providing for the recognition of academic and professional qualifications of Filipino workers in Italy; • institute skills and competency assessment systems in recognition of prior learning, to determine whether another training course must be required; and • dispense adequate information and assistance about education and training in accordance with migrants’ capabilities.

100 The Italy–Philippines Migration and Remittance Corridor Recommendations 3. Opportunities for the Youth

There must be activities that target the Filipino youths in Italy. Such initiatives can include values formation and counselling, career advice, language proficiency training, cultural orientation, arts and sports recreational activities, and education on sexuality, health and drug use, and other issues of particular concern to the youth.

4. Regular Dialogue between Italian and Philippine Stakeholders

An annual dialogue between the Philippines and Italy should be organized and convened to include migration and labour authorities, policymakers, banking institutions, money transfer agencies, civil society, and migrant associations. This forum could discuss issues, challenges, and emerging best practices on migration and development between the two countries. F. Areas for Further Research on the Italy–Philippines Remittance Corridor

This research was able to compile relevant laws and structures concerning migration and remittance in the Italy–Philippines corridor, and to produce vital data in understanding the remittance behaviours of Italy-based Filipino remitters. However, it also revealed more areas where further investigation is necessary. The following items and agenda are enumerated to encourage further research and study:

1. Impact Assessment of Stakeholders’ Migration and Development Efforts

Interviews conducted with key informants from government agencies in the Philippines did not indicate the presence of a system that assesses the efficacy of programmes, and the limitations and reliability of data on services and beneficiaries. One exception was an external financial audit of the Philippines’ overseas employment programme made by the Philippines’ Commission on Audit in 2008. This is strange as budget requests require qualitative performance indicators. While it is possible that there are existing data that are not publicly disseminated, identifying assessment criteria is an important process for improving services or formulating policy. There must be an overall study on government transparency and assessment of its services.

Similar efforts by NGOs, business groups and other stakeholders in migration and development efforts can be studied in terms of their impact on OFs and migrant families.

Further research must also be done in decentralized migration and development initiatives by local and regional bodies in Italy. This report had outlined examples of migration and development work efforts by Italian local governments, but future monitoring and evaluation is necessary. Areas for more extensive studies include:

• the relationship between Italy’s immigration policies and existing local, regional and national efforts aimed at maximizing the potential of overseas migration and remittances to developing the migrants’ countries of origin; and

101 • how issues in migrant integration (e.g. educational equivalency systems, amnesty for irregular migrants, occupational mobility of migrant workers) relate to migration and development efforts in Italy.

The Philippine central bank’s efforts on remittances also warrant evaluation and an impact assessment. The quarterly Consumer Expectations Survey of the BSP shows increased savings activity among migrant households in the Philippines. BSP officials attribute this to the agency’s Financial Literacy Campaign. An independent body must conduct a study on the BSP’s remittances-related initiatives and identify factors that have encouraged migrant households to direct more of their remittances to savings.

2. Studies to Support Coordination between Italy and the Philippines

Italy’s National Action Plan on remittances has encouraged migrant-sending countries like Albania and the Republic of Moldova to develop their own national action plans. It would be interesting to learn how this has affected the remittance environments of those two countries. Moreover, in line with earlier recommendations of harmonizing the migrant policies of Italy and the Philippines, it is important to discover the common ground between the remittance action plans of Italy (a leading remittance-sending country) and the Philippines (a major remittance-receiving country).

3. Disparities in Migration and Remittance Data

Data from central banking authorities in the Philippines and Italy have revealed their differences in recording remittances figures. Both countries have their own rules, concepts and definitions that are reflected in how they record migration and remittances. This is true for migration and remittance data all over the world, although there are now attempts to establish international definitions and standards to streamline data on migration and remittance. A comprehensive study comparing the ways Italy and the Philippines record remittances and tackle migration procedural issues can facilitate standardization or at least improve the bilateral cooperation between the two countries.

The Italy–Philippines Migration and Remittance Corridor The study identified several procedural disparities that could be starting points for future research:

• It is difficult to account for Filipino migration flows between the Philippines and Italy because the various classes of migrants (e.g. work visa holders, petitioned family members, irregular migrants) fall under different classifications upon their departure from their origin country and upon their arrival at their country of destination. • While POEA and ISTAT data agree that many Filipinos are in family care services or household domestic work, the Philippines apparently underreports the number of male service workers abroad. For instance, while ISTAT data indicate that male Filipinos represent about 42 per cent of the Filipino migrant population in Italy, there are only a few of such male workers reported in POEA. This might be because male spouses or dependents did not move to Italy with work visas, thus they bypassed POEA.

102 The Italy–Philippines Migration and Remittance Corridor Recommendations • A similar gap exists in data about Filipino permit holders and permanent residents in Italy. While the 2007 records from the Italian Ministry of Interior showed that the Italian government awarded 83,589 residence permits to Filipinos, the records of the CFO in the Philippines indicate that only 8,628 registered with the CFO over a 28-year period from 1980 to 2007. Not surprisingly, there are no accurate figures on undocumented Filipinos in Italy. Estimates place this population at 13,000. This is a significant number of Filipinos who may not have access to vital services or information.

4. Remittance Behaviour of Filipinos in Italy

There are a number of points that require further clarification and investigation to explain some of the findings from IOM–ERCOF surveys. This includes studies to explain the differences between this report’s survey findings and the survey findings of other existing studies. a) The survey was not able to determine how long migrants keep their savings and investments. A more extensive study on this could reveal whether these instruments are treated simply as a temporary repository for daily and/or regular expenses, a type of payroll account, or a long-term investment vehicle for future productive projects, more complex financial instruments or asset build-up. Such studies can include the different methods OFWs send resources to their beneficiaries that were explained in this report (e.g. occasional remittances, padala) and how the different methods relate to how the resources are used. b) Other studies could also focus on how age, gender and educational attainment determine the investment decisions of migrant Filipino workers. This study revealed that investment decisions are largely made by the OF in Italy. An analysis of statistical figures taken from the survey did not present evidence that gender is a significant variable among Filipinos. However, it is important to note that this particular migration corridor is highly gendered in terms of occupation. Future research could investigate further about more gender-sensitive factors on remittance behaviour. Studies on the Italy–Philippines corridor could examine the effects of remittances on the migrants’ socio-economic development needs. c) Future surveys, interviews and discussions should be conducted to gather data on the role and behaviour of migrant households in budgeting, spending and saving the remittances they receive. It would also be important to understand to what extent these households rely on remittances. Almost all the respondents from this survey admitted that they were not aware of how their remittances are used by their households in the Philippines. As the survey contained no other question that could expound on this phenomenon, it is an important area for further study and action as it is perplexing and puzzling that migrants who remit money to their households have little knowledge about household expenditure and budgeting. d) The research did not collect comparative data about the differences in remittance behaviour between migrant workers (specifically caregivers and domestic helpers) who live with their employers and those who have to pay rent for accommodations. There is good reason to believe that this variable has a significant effect on remittance behaviour as workers that live with their employers may save more money. There are also other variables considering the dynamics of renting arrangements which lead OFWs to share or sub-rent their apartments to recoup expenses in rent. A survey that takes this into account would yield interesting behavioural data.

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The Italy–Philippines Migration and Remittance Corridor Gaggi, P. 2006 Remittance Services: The Case of Italy. Paper presented at the CPSS–World Bank General Principles of International Remittances Services, Washington, United States, 10 May.

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Giaconne, M. 2009 Migrant Workers Found Mainly in Low-Skilled Occupations. March, http://www.eurofound. europa.eu/ewco/2009/02/IT0902049I.htm (accessed on 13 May 2009).

106 The Italy–Philippines Migration and Remittance Corridor Bibliography GMANews.tv 2009a Banks to cut remittance fees under new accord. 2 December, http://www.gmanews.tv/ story/178365/banks-to-cut-remittance-fees-under-new-accord (accessed on 3 December 2009). 2009b 60,000 reacquire Filipino citizenship. 27 January, http://www.gmanews.tv/story/178365/ banks-to-cut-remittance-fees-under-new-accord (accessed on 20 July 2009), 27 January.

Hamburg Institute of International Economics 2009 Stocks of Irregular Migrants: Estimates for Italy. http://irregular-migration.hwwi.net/typo3_ upload/groups/31/3.Database_on_IrregMig/3.2.Stock_Tables/Italy_Estimates_Irregular_ Feb09.pdf (accessed on 13 June 2009).

Hernandez-Coss, R. et al. 2006 The Italy–Albania Remittance Corridor: Shifting from the Physical Transfer of Cash to a Formal Money Transfer System. Paper presented at the conference “Remittances: An Opportunity for Growth”, Bari, Italy, 3–4 March.

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Institute for Migration and Development Issues (IMDI) 2008 The Philippine Migration and Development Statistical Almanac. IMDI, Mandaluyong City, Philippines, December.

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The Italy–Philippines Migration and Remittance Corridor 2007 Italy action plan on remittances. http://www.iomtirana.org.al/Remitance/Materiale/Docs/ Italian-Action-Plan-on-Remittances.pdf (accessed on 20 June 2009).

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108 The Italy–Philippines Migration and Remittance Corridor Bibliography Opiniano, J. 2005 Good News for the Poor: Diaspora Philanthropy by Filipinos. Association of Foundations- Philippines, Quezon City, Philippines. 2008 No dirty money from OFWs, yet – government watchdog. OFW Journalism Consortium News Packet, 7: 1, 28 March. 2009a Filipinos’ International Migration and Its Impact on Domestic Employment Conditions. Research for the Social Research Center, University of Santo Tomas, Manila, Philippines. 2009b Overseas Filipinos and Cooperatives: Maximizing Pinoy Cooperativism and Reaping Mutual Rewards. Paper presented at the 2009 General Assembly of VICTO National Cooperative Federation, Davao City, Philippines.

Organisation for Economic Co-operation and Development (OECD) 2009 International Migration Report 2009. OECD, Paris, France.

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Pernia, E. 2008 Migration, Remittances, Poverty and Inequality – the Philippines. Discussion paper no. 2008-01, University of the Philippines School of Economics, Quezon City, Philippines, July.

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109 Ribas, N. 2008 Gender, Remittances and Development: The Case of Filipino Migration to Italy. United Nations International Research and Training Institute for the Advancement of Women (UN-INSTRAW), Santo Domingo, Dominican Republic.

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Vitiello, M. 2008 Immigration and Integration Policies in Italy. IRPPS Working paper no. 20, Istituto di Richerche Sulla Popolaziuone e le Politiche Sociali del CNR, Rome, Italy, March.

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110 The Italy–Philippines Migration and Remittance Corridor Other Sources Other Sources

Key Informant Interviews Conducted

1. Officials of the Philippine embassy in Rome 2. Italian Ministry of Interior 3. Banca D’Italia 4. Centro Studi di Politica Internazionale 5. Pilipinas OFSPES (Overseas Filipinos’ Society for the Promotion of Economic Security), 6. Filipino Women’s Council 7. Ministero del Lavoro e delle Politicke Sociali 8. Filipino councillors in Rome 9. Bangko Sentral ng Pilipinas 10. International Network of Alternative Financial Institutions (INAFI)-Philippines 11. Philippine Consortium on Migration and Development (PhilComDev) 12. Kanlungan Centre Foundation 13. National Reintegration Center for OFWs 14. Overseas Workers Welfare Administration 15. Microfinance Council of the Philippines 16. Commission on Filipinos Overseas 17. Encash 18. Social Security System 19. Philippine Health Insurance Corporation 20. National Confederation of Cooperatives 21. Nagkasama Multi-Purpose Cooperative (Balayan and Tuy, Batangas) 22. Philippine Central Fund Cooperative Federation 23. Pag-Ibig Fund (Home Development Mutual Fund) 24. Ateneo de Manila University 25. International Organization for Migration Rome Focus Group Discussions Conducted

1. FGD of beneficiaries (four participants), Pampanga province, 13 February 2009 2. FGD of beneficiaries (five participants), Batangas province, 15 February 2009 3. FGD of remitters (five participants), Rome, 12 March 2009 4. FGD of remitters (eight participants), Biella, 15 March 2009 5. FGD of remitters (eight participants), Rome, 19 March 2009 Reports from Websites

1. Bangko Sentral ng Pilipinas 2. National Reintegration Center for OFWs 3. Commission on Filipinos Overseas

111 4. Philippine Overseas Employment Administration 5. Commune of Rome, Italy 6. Social Security System 7. Pag-Ibig Fund 8. Philippine Health Insurance Corporation 9. Chamber of Real Estate Builders Association 10. Italian Institute of Statistics 11. Fondazione ISMU 12. Land Bank of the Philippines 13. Philippine Trade Training Center 14. Economic Resource Center for Overseas Filipinos 15. Overseas Workers Welfare Administration 16. Social Enterprise Development Partnerships, Inc. Reports from Unpublished Papers

1. Bangko Sentral ng Pilipinas 2. National Reintegration Center for OFWs 3. Philippine Cooperative Central Fund Federation 4. Nagkasama Multi-Purpose Cooperative 5. Chamber of Real Estate Builders Association 6. Proceedings of the IOM Thursday Forum Series (March to April 2009) 7. Proceedings of the Rome Policy Dialogue on the Italy–Philippines Remittance Corridor, 19–20 May 2009, Rome, Italy The Italy–Philippines Migration and Remittance Corridor

112 The Italy–Philippines Migration and Remittance Corridor Annex 1 Annex 1: Sampling Formula to Determine Survey Respondents

The researchers determined the sample size using the Confidence Interval Formula:

n = z 2 (pq)

e 2

Where: n = sample size z = standard error associated with the chosen level of confidence p = estimated percentage of population q = 100-p e = acceptable sample error

The researchers also estimated the sample size as

n = 1.96 2 (70 x 30) = 322

5 2

Where:

z = 95 per cent confidence level p = 70 using the bank remittance mode (ADB, 2005) q = 100 – 70 e = 5

The computations yielded a minimum sample size of 322. The sample size was increased to target 350 with 100 to be interviewed in the Philippines and 250 in Italy. The total number of actual respondents for the surveys was 368.

113 Annex 2: Details of the Surveys Conducted in the Philippines and in Italy

Surveys in the Philippines

The survey that was conducted in the Philippines was scheduled for the Christmas season to be able to interview Filipinos who were visiting home during the holidays. As Christmas season is exceptionally long in the country, the survey was conducted from January to February 2009 with 95 respondents predominantly from the provinces of Batangas, Laguna, Oriental Mindoro, Tarlac, and the country’s capital, Metro Manila.

The surveys were conducted simultaneously in all locations in the Philippines. Barangay (village) officers identified the households that had migrants based in Italy. Prior to conducting the survey, all potential participants in each location were screened to produce the most representative samples. The participants were interviewed in their residences. Efforts were taken to collect accomplished surveys that were fully filled out and submitted to meet the target quota within the limited time frame.

Surveys in Italy

Rome and Milan were chosen as survey locations because of their large populations of OFs. The surveys, conducted during March and April of 2009, yielded 273 respondents. They were given by Tagalog-speaking trained interviewers at locations where Filipinos congregate (i.e. Philippine Embassy, transportation terminals, churches, commercial centres, restaurants, training venues). Respondents were randomly selected and screened on the basis that they sent remittances to the Philippines. Resource constraints limited the survey to be primarily conducted in Rome where almost all of the respondents were interviewed. The Italy–Philippines Migration and Remittance Corridor

114 The Italy–Philippines Migration and Remittance Corridor Annex 3 Annex 3: Philippine Government Services in the Protection of Nationals Overseas

The DFA and its corps of 87 embassies and consulates do not only provide consular services to Filipino nationals in their jurisdictions abroad. Whenever possible, DFA personnel provide outreach services and legal assistance, set negotiations with host country officials in extreme cases affecting distressed Filipino workers (e.g. convicted Filipino workers on death row), and arranges the repatriation of distressed workers, including undocumented migrants. The DFA has a legal assistance fund for migrant workers who need monetary resources for court cases in host countries.

Various agencies under DOLE perform the following tasks:

• Facilitates the search for overseas job opportunities; regulates the overseas employment industry (POEA). • Provides pre-departure orientation and activities and welfare assistance to vulnerable overseas workers abroad and upon their return (OWWA). • Dispenses legal and penal actions against illegal recruitment activities, contract substitution, excessive recruitment fees, and trafficking (NLRC). • Provides assistance to distressed migrant workers in host countries (POLOs).

The OWWA is the world’s biggest welfare fund for migrant workers, underwritten from the migrants’ payment of USD 25 per overseas work contract which they pay prior to departure. As of 2007, OWWA had 1,087,657 members and a fund corpus of PHP 1.390 billion (USD 30.181 million). The IOM–ERCOF survey of Filipino remitters in Italy found that 82 per cent of respondents are members of OWWA, with six out of 10 saying they obtained membership in Italy.52 The agency’s programmes for overseas workers are divided into four programmes: a) insurance and health care; b) education and training benefits; c) family welfare and assistance; and d) workers’ assistance and on-site services. To provide welfare assistance to vulnerable overseas workers abroad, OWWA sends out welfare officers in 31 key migrant destination countries. Given the rural spread of migrants, migrant families are able to access key OWWA services through its 16 regional offices.

PDOS are seminars for departing migrants about the laws, practices, regulations and culture of the destination country. Their purpose is to avoid or, at least, minimize incidents, emergencies or situations that could result in legal, physical or psychological distress. The duration of the seminar is between half a day to a whole day. Attendance in PDOS is mandatory for all overseas contractual workers. Deployed workers are given informational materials as well as names and contact numbers of diplomatic and labour staff, and other entities they may call in case of emergencies. These include accredited NGOS, recruitment agencies and the POEA. However, there is no standardized PDOS curriculum with information about remittances and financial literacy. A review of pre-departure orientation procedures is needed to acquaint migrants with remittances and financial literacy.

52 OWWA membership is mandatory for all departing workers, but there are OFWs who left the country as tourists but found work, or were former OWWA members but whose contracts have expired and instead of returning to the Philippines, took on another employment without reporting this. Hence, their current work overseas did not pass through the POEA. Yet these overseas workers could still enrol for membership in OWWA through Philippine Labour Attachés abroad. This explains why six out of 10 respondents obtained OWWA membership in Italy.

115 The CFO is mandated to provide programmes for OFs, which includes the PDOS and others that encourage Filipino migrants to contribute to Philippine development. Under Executive Order 548-A, CFO is also designated to address the trafficking of migrants. The CFO task force provides referral services and airport and legal assistance to returning victims of trafficking.

The DSWD also assists migrant workers through the following: (1) a livelihood programme for distressed workers; (2) the deployment of social welfare attachés in specific countries with high numbers of vulnerable and distressed Filipino workers; (3) administering to those who underwent traumatic experiences with an after-care programme that involves counselling and critical incident stress debriefing (a method of psychosocial intervention); and (4) social services to undocumented migrants and their families who are repatriated or deported to the Philippines. Examples of these are the psychosocial and welfare services given to returning undocumented migrants deported from Malaysia and the department’s livelihood programme offered to female domestic workers repatriated from Lebanon in 2006. However, these livelihood programmes are temporary measures instituted mainly to soften deportation shocks and help distressed workers reintegrate upon their unscheduled return.

Basic government services and programmes for migrants. Several government-controlled financial institutions and intermediaries have been offering health insurance and other allied services to OFs and their families. These government programmes primarily respond to important migrant needs that afford protection or coverage on health, retirement and other contingencies. Contributions to programmes such as Pag-Ibig or SSS (see below), are also configured as savings mechanisms that earn interest for migrants.

Health insurance. PhilHealth is the country’s lead implementer of the National Health Insurance Program. Since 2004,53 PhilHealth has been running an Overseas Workers Program (OWP) to provide annual medical insurance services to overseas workers. Departing overseas workers have to pay a mandatory PHP 900 (USD 19.54) premium per annum.54 Should overseas workers wish to continue their PhilHealth membership beyond their overseas contracts, they need to pay PHP 300 (USD 6.51) every quarter as individual paying members. The collection of premiums is mainly done at The Italy–Philippines Migration and Remittance Corridor the POEA during the deployment process.

PhilHealth claims that as of 2008, it has active membership coverage of some 68.67 million Filipinos (consisting of principal members and beneficiaries), of which 1.84 million are overseas workers and their beneficiaries. Collection of premiums increased from PHP 8.6 billion (USD 186.730 million) in 2000 to PHP 25.6 billion (USD 555.846 million) in 2008. Of this total figure, benefit payments handed out to all members increased to PHP 18.2 billion (USD 395.172 million) in 2008, from PHP 6.8 billion (USD 147.647 million) in 2000. In 2008, some PHP 593 million (USD 12.876 million) in benefit payments were handed out to members of the OWP.55 The collection of premiums is done at the POEA.

53 Prior to PhilHealth’s OWP, OWWA managed an OWWA Medicare Program which was eventually transferred to PhilHealth. 54 Details of the coverage of PhilHealth’s OWP can be found here: http://www.philhealth.gov.ph/members/overseas_workers/index. htm. 55 Key informant interviewees, who are frontline personnel of PhilHealth, declined to answer major questions – the whys, hows, and prospects for the future of the OWP as they were not authorized to speak on behalf of the agency.

116 The Italy–Philippines Migration and Remittance Corridor Annex 3 Social security benefits. For its part, the SSS has been running two savings programmes for OFs and is the only social security agency in Asia that has a social security package for citizens working or residing abroad. The agency’s programmes for OFs are a means to address social security-related issues facing migrants (i.e. exclusion from social security coverage in host countries, long residency requirements before being eligible for benefits, problems in upholding social security rights).

A section called International Affairs and Branch Expansion division implements the voluntary coverage SSS programme for OFWs. OFWs pay a PHP 1,620 (USD 35.17) premium annually through SSS offices at the POEA and through designated banks and 14 branches in selected embassies and consulates in 11 countries, including two in Italy. Benefits cover the areas of retirement, disability, death, funeral, sickness, maternity, and loans (e.g. salary loans, housing loans, home repair and improvement, business development loans).

SSS’s Real Estate Department also manages a PHP 3 billion (USD 65.138 million) Direct Housing Loan Facility to workers who are members of trade unions and to OFWs. A maximum of three qualified SSS members within the same household could apply in a single loan for amounts of PHP 300,000 (USD 6,513.82) for socialized housing or PHP 500,000 to PHP 1 million (USD 10,856.37 to USD 21,712.74) for low-cost housing. The loan is payable in multiples of five years up to a maximum of 30 years. Interest rates are 9 per cent for up to PHP 300,000 loans, 13 per cent for PHP 300,000 to PHP 500,000 loans, and 14 per cent for PHP 500,000 to USD 1 million loans.56

Since 2002, SSS has also operated a provident voluntary fund programme called FlexiFund for OFs, where migrant savers contribute PHP 1,800 (USD 39.08) monthly. It is a pension plan and savings account that pays 8 per cent interest annually in addition to a pension and a lump-sum payment upon maturity. A FlexiFund availed with a PHP 2,000 (USD 43.43) monthly contribution, for example, can accumulate PHP 1 million (USD 21,713) in 20 years and PHP 349,000 (USD 7,578) in 10 years (ADB, 2005).57

SSS membership among OFs total at least 500,000. As of 2008, collection from OFs has reached PHP 1.455 billion or USD 31.375 million, from a low of PHP 38 million (USD 825,084) in 1997, when the programme for OFs first started. Only about 20,000 OFs have availed of the SSS Flexi-Fund.

According to interviews with Judy Frances See and Joy Villacorta from the SSS, these programmes of SSS for OFs also run in tandem with the agency’s forging of bilateral social security agreements with host countries which cover equal treatment, the export of benefits to the migrants’ home countries (portability of social security benefits), the total of coverage periods, and mutual administrative assistance. To date, the Philippines has forged bilateral social security agreements with Austria, the United Kingdom, Spain, France, Canada (and a Canadian province, Quebec), the Netherlands, Switzerland, Belgium, and the Republic of Korea .

56 In http://information-hub.ofw-connect.com/OFW_Articles/SSS_Housing_Loan_Benefits. 57 From interviews with the SSS.

117 Housing loans. Since 1992, the Pag-Ibig Fund, formally known as the Home Development Mutual Fund, has been running what it calls a Pag-Ibig Overseas Program (POP) for OFWs. It is referred to as Pag-Ibig 2, to differentiate it from Pag-Ibig 1, which is for local workers. Regular Pag-Ibig members are entitled to apply for housing loans at low interest, for amounts of up to PHP 3 million (USD 65,138), with terms of five, 10 and 20 years. Those who avail of loans continue to pay the Pag-Ibig monthly contribution fee. 58 As of April 2009, interest rates range from 6 per cent to 10.5 per cent, depending on the terms of the loan.

Membership in POP or Pag-Ibig 2 is voluntary, unlike Pag-Ibig 1 where membership is mandatory. Today, there are an estimated 500,000 OFs who are members of POP. Majority of POP members are temporary migrants – half are seafarers. POP has been especially helpful for temporary migrants, particularly those in semi- or low-skilled jobs in the Middle East and Asia, while only a few immigrants and permanent residents have opted for membership since they find the maximum amount for loan “small”. 59 The Italy–Philippines Migration and Remittance Corridor

58 From an interview with Pag-Ibig Fund. 59 Ibid.

118 The Italy–Philippines Migration and Remittance Corridor Annex 4 Annex 4: Reintegration Services of Philippine Government Agencies

1) The services of the NRCO are divided into four major strategies:

Counselling services, which guide migrant workers and their families on values formation and prepare them for eventual reintegration. Services include: re-entry options (i.e. employment and livelihood, financial and investment opportunities); educational initiatives and retirement programmes; knowledge transfer programmes for returning skilled migrants who wish to share their expertise with their local communities.

Capability enhancement services, which equip migrants and their families with knowledge and skills in their chosen reintegration options to assist them in making informed decisions. Assistance includes: financial literacy activities that cover financial planning and management, savings, special remittance or investment schemes; free skills training and retooling; free entrepreneurial training; business counselling.

Networking services. NRCO refers returning overseas workers to business organizations, financial institutions and livelihood and skills training in order to secure cooperation for the identification and development of entrepreneurial or investment opportunities. The referrals are aligned with enterprise formation, access to credit, technology and product development, market assistance, and skills upgrading and re-tooling. Activities include: exploring partnerships with specific institutions; development of returning migrant database and directory of service providers and stakeholders to facilitate matching; migrant volunteer projects to encourage Filipinos abroad to contribute to the development of their communities.

An assistance desk attends to walk-in and online queries from overseas workers, who may then be referred to the appropriate service providers. Support includes: job search assistance; entrepreneurship and enterprise development; training and re-tooling assistance; psychosocial services; knowledge transfer activities for skilled workers; links with local government agencies, and community and non-government organizations; retirement and remittance packages; investment portfolio; advocacy and information programmes.

In its first two years, the NRCO discovered what services it could provide to returning migrant workers (which include both distressed migrant workers and those who did not encounter problems migrating). Given that the NRCO has only existed for a few years, it is too early to assess its impact and capability on reintegrating displaced workers. The NRCO received its first appropriation from the national budget in 2008 from DOLE.

This reintegration initiative further developed in 2010 when Republic Act. No. 10022, otherwise known as An Act Amending RA No. 8042,60 was passed into law. Among its provisions was the

60 Republic Act No. 8042 is also known as the Migrant Worker’s Act of 1995.

119 formalization of NRCO under DOLE. RA No. 10022 strengthened the NRCO’s legal mandate to provide mechanisms for reintegration, promote local employment, and tap former migrants’ skills and potential for national development. The new law restated that the NRCO shall provide the following services:61

• Develop and support programmes and projects for livelihood, entrepreneurship, savings, investments and financial literacy for returning Filipino migrant workers and their families in coordination with relevant stakeholders, service providers and international organizations. • Coordinate with appropriate stakeholders, service providers and relevant international organizations for the promotion, development and the full utilization of OFW returnees and their potentials. • Institute, in cooperation with other government agencies concerned, a computer-based information system on returning Filipino migrant workers, which shall be accessible to all local recruitment agencies and employers, both public and private. • Provide a periodic study and assessment of job opportunities for returning Filipino migrant workers. • Develop and implement other appropriate programmes to promote the welfare of returning Filipino migrant workers. • Maintain an Internet-based communication system for online registration and interaction with clients, and maintain and upgrade the computer-based service capabilities of the NRCO. • Develop capacity-building programmes for returning OFWs and their families, implementers, service providers, and stakeholders. • Conduct research for policy recommendations and programme development.

2) The DTI provides entrepreneurship seminars. DTI has information on its website about the steps and registration requirements in setting up an enterprise; financing small and medium enterprises; availment of training courses available for specific types of small enterprises and other strategic information that may be useful for OFs. However, there is neither information about how many OFWs access or use this information, nor dedicated articles about DTI programmes for OFWs. As mentioned earlier, the agency has not developed a programme or service that specifically caters to The Italy–Philippines Migration and Remittance Corridor OFs. Moreover, DTI has foreign trade offices that, for a long time now, have been inviting foreigners to invest in the Philippines through an investment law that provides tax and other incentives for setting up industries in priority areas. In contrast, there are no laws that give special incentives to Filipino investors from overseas. Under the law, no distinction is made between foreigner and OF investments.

DTI has two existing programmes that could prove beneficial to migrant enterprise. One is the Rural Microenterprise Promotion Programme (RuMEPP), which promotes profitable and sustainable micro-enterprises and could serve families of OFs who are in the Philippines. Another is the One-Town, One-Product (OTOP) programme that supports micro, small, and medium-sized entrepreneurs (MSMEs) with assets under PHP 100 million (USD 2.171 million) that produce their

61 Republic of the Philippines, Congress and Senate. Republic Act No. 10022: An Act Amending Republic Act No. 8042. 14th Congress, Third Session. Metro Manila, 2009. Retrieved 15 April 2010 from < http://www.poea.gov.ph/rules/RA%2010022.pdf>.

120 The Italy–Philippines Migration and Remittance Corridor Annex 4 municipalities’ best product. OTOP encourages municipalities to promote these products to local and overseas markets. OFs wishing to venture into an OTOP enterprise in their hometowns can borrow from the DBP up to 90 per cent of the required capital.

3) The FWRC provides social services to Filipino migrant workers in their host countries. Pursuant to the Migrant Workers and Overseas Filipinos Act of 1995, Section 19, the FWRC was established in countries with large numbers of OFWs. It is a 24-hour centre that provides social and economic services to distressed Filipino workers, especially those needing temporary shelter. Because there are comparatively few labour-related cases in Italy, it does not have an FWRC. Hong Kong SAR, Taiwan Province of China, Jordan, Kuwait, Malaysia, Republic of Korea, Singapore, United Arab Emirates, , Libyan Arab Jamahiriya each have one centre, while Saudi Arabia has three. Some FWRCs, such as those in Kuala Lumpur and Hong Kong SAR, run training classes on entrepreneurship, financial literacy, and skills acquisition for migrants, and have posted notable results from graduates setting up enterprises or finding occupations with higher pay. These practices deserve replication (see Text Box 5 and Annex 4).

The reintegration programme has been beset with persistent challenges throughout the years. Even now, productive reintegration is deterred by the lack of sustainable employment, livelihood and entrepreneurial opportunities back home. Arguably, the success of any reintegration programme primarily hinges on the state of domestic business and employment.

On one hand, the lack of local government involvement in the management of migration issues and opportunities continues to inhibit the potential of local communities to attract back savings, capital, skills and technology gained from abroad. On the other hand, the Philippine government and the recruitment industry’s unrelenting support of overseas employment options sustains Filipinos’ interest in migrating out of the country over returning to the Philippines. The extent of success among migrants has added to the lure of working abroad.

The low skills of many migrants (especially in occupations such as domestic work, general services, factory work) and the low wages being offered in the market amid recruitment regulation and bureaucracy fail to provide workers with better negotiating leverage for higher income and, subsequently, improved rates of savings. Despite years of work abroad, a significant population of OFWs does not mindfully take stock of their skills acquisition or occupational or income growth. Many have moved into high levels of consumption and low levels of savings and investments. It is a common observation that many OFWs spend the prime years of their productive life working abroad and do not have retirement plans.

The absence of a monitoring system for returning migrant workers continues to be a subject of discussion. Without knowing who are returning and what occupations, proficiency areas, income levels, industry fields, and host countries they come from, it is difficult to offer a responsive reintegration programme. It is uncertain whether returnees are forced to come home, whether they are largely distressed workers with cases to file, whether they are retiring workers or whether they found their skill levels to have become globally uncompetitive. Cooperation among the Bureau of Immigration, DOLE and POEA must capture vital information about returning OFWs to be able to successfully operate a reintegration programme. It is also important to document and assess successful cases of reintegration for possible replication.

121 Annex 5: Philippine Civil Society Organizations

Unlad Kabayan Migrant Services. Since the group’s founding in 1995, Unlad Kabayan has been implementing two major programmes that utilize the savings of overseas workers. The Migrants’ Savings and Alternative Investment (MSAI) programme promotes the formation of savings groups composed of migrants and provides business development assistance to migrant workers who wish to set up their own businesses in their home communities. Complementing this is the Social Entrepreneurship and Enterprise Development Services (SEEDS) that helps migrants and migrant associations direct resources to support existing social enterprises such as rice mills and coco-coir facilities. Unlad Kabayan’s MSAI and SEEDS programmes operate in the cities of Davao and Iligan and in the provinces of Bukidnon and Davao Oriental. It is to be noted that Unlad Kabayan’s flagship savings programme has also been embraced and adopted by migrants not only from the Philippines, but also those from other countries such as , Sri Lankans, Bangladeshi and other nationalities in Hong Kong SAR where MSAI is also being implemented.

The Atikha Overseas Workers Communities Initiative, or Atikha (a word from a Philippine dialect which means “the gradual accumulation of an amount by saving” ), has been involved in programmes at the community level. Atikha established an OFW Center in San Pablo City in Laguna through collabo- rative contributions from the local government, the private sector and development organizations. The centre provides programmes that seek to address the social costs of migration and harness available local resources, including those coming from OFs abroad to promote savings and investments which will benefit the migrants’ households and their hometown. Atikha’s initiatives include: a) a financial literacy training programme for OFW family members, including children, and for those who will become financial literary trainers themselves; b) collaboration between migrants, migrant hometown associations, NGOs, and the private sector in San Pablo City and Mabini, Batangas, to direct remittances to specified development projects; and c) directing migrant remittances to social enterprises within local communities. Atikha has linked Filipino migrant investors in Europe with established community social enterprises that can offer alternative investment projects for their remittances. An example of such a social enterprise is the SIDC, the country’s leading agricultural cooperative that is based in the The Italy–Philippines Migration and Remittance Corridor capital city of Batangas province.

ERCOF acts as an intermediary between migrants and stable rural financial institutions that can offer alternative investment products to maximize migrants’ remittances and even contribute to local economic development. Through ERCOF, OFs from Luxembourg and the Netherlands opened five-year time deposits in microfinance rural banks in northern Mindanao, Batangas and Negros Occidental, now amounting to almost PHP 2 million pesos.62 ERCOF has now partnered with 15 rural banks that are setting up programmes that provide financial products and services for OFs, including a long-term deposit product configured as a retirement fund. According to ERCOF, these1 5 rural banks are among the leaders in the rural banking industry. The banks are involved in microfinance activities and have

62 Based on the internal records of ERCOF.

122 The Italy–Philippines Migration and Remittance Corridor Annex 5 existing deposit, loan and investment products for OFs and their families. Moreover, they have over 220 branches in 44 provinces.63 ERCOF has also facilitated OFW-backed investments in dairy cows, under a stewardship programme handled by a dairy cow cooperative and dairy farmer. The OFW investor and dairy farmer share the milk proceeds and the livestock produced. So far, investments in these cows are valued at about PHP 600,000 (USD 13,027.65). ERCOF programmes have a bias for and are directed to the development of the Philippine countryside.64

For two decades, the Kanlungan Center Foundation served distressed women overseas workers, and provided financial services for migrants. Kanlungan has offered livelihood grants to trafficking victims. In the province of La Union in northern Philippines, Kanlungan has a Local Economy Development programme that helps the formation of local chapters composed of former overseas workers, called the Bannuar ti La Union (BTL). Existing projects for the local economic development programme cover micro-businesses (e.g. retail stores, eco-friendly enterprises). BTL chapters have been regularly consulted by the provincial government of La Union and the eight municipal governments about migrant issues. BTL supports the idea that migrant concerns are integrated in local development plans (e.g. remittances, alternative jobs for migrants and their families, anti-illegal recruitment campaigns).65

PhilComDev (Philippine Center for Migration and Development), established in 2007, is a newly established consortium of NGOs that are members of INAFI-Philippines, the Migrant Forum in Asia, and the Philippine Social Enterprise Network (PhilSEN). PhilComDev strives to optimize the benefits from migration to help the country achieve self-sufficiency and to minimize migration as a forced option. One of the major initiatives of PhilComDev is the “Convergence Project” where hometown associations, NGOs and local governments cooperate in pooling overseas and local resources for development projects. PhilComDev also launched an awards programme for outstanding OF individuals and associations in recognition of their work on migration and development in the Philippines. The awards also serve as inspiration to other organizations.66

Civil society organizations outside of the migrant sector have initiated their own remittances-for- development projects. Some examples are discussed below:

In 2005, the Sugar Industry Foundation Inc. (SIFI), in cooperation with the United Sugarcane Planters of Davao Multipurpose Cooperative, began a project that involved sending children of sugar farmers to overseas jobs and a subsequent remittance scheme. The project aimed to deploy at least 25 adult children of sugar farmers for documented overseas jobs and set up enterprises for the families left behind by these children. Some 50 children were accepted and given English lessons and skills training (e.g. hotel and restaurant services, baking). They were then deployed to accredited licensed recruitment agencies in Middle East and Asian countries. The children were handed out PHP 1.042 million (USD 22,624) in pre-deployment loans which their remittances to family members should have been

63 ERCOF’s rural bank partners are: First Valley Bank, Bank of Florida, Bangko Mabuhay, Bangko Kabayan, GM Bank, Rang-ay Bank, Quezon Capital Rural Bank, Camalig Bank, First Macro Bank, Bank Victorias, Guagua Rural Bank, One Network Bank, Cantilan Bank, Xavier Punla Rural Bank, and Xavier Tibod Rural Bank. The last two are microfinance-oriented rural banks. 64 Rural banks in the Philippines are mandated by law to invest their earnings in the areas where they operate as a form of community reinvestment. 65 Taken from key informant from Kanlungan Centre Foundation. 66 From a key informant from PhilComDev.

123 repaying. Fifty per cent of every remittance goes to repaying the loan, 20 per cent goes to the family, 10 per cent is allocated to the child’s personal savings, and 20 per cent is portioned off as seed capital for an enterprise to be run by the family. Some seven sugar farming families have run enterprises such as sugarcane farming, a retail store, and a service to spray mango trees (Braza, 2007).67

SEDPI is a training and capacity-building institution for microfinance that launched a Sustainable Investment Fund where migrants can invest for competitive returns. Investments to the fund are used to provide loans to organizations that implement microfinance. The microfinance investment fund is guaranteed by a Dutch development organization, Cord-Aid. SEDPI also offers pre-investment work consisting of financial literacy sessions for Europe-based Filipinos, who so far, have invested at least USD 100,000 in SEDPI’s microfinance fund.

Civil society actors have actively promoted greater financial literacy and entrepreneurship among Filipinos. Advocacy groups on entrepreneurship have developed to tackle issues related to low savings rates in the Philippines, the need to promote entrepreneurship among Filipinos, and low volumes of local investments.

Go! Negosyo (Go! Business) is the advocacy of the Philippine Center for Entrepreneurship (PCE), a non- stock, non-profit organization. It addresses poverty in the Philippines by demystifying entrepreneurship and promoting it as an alternative to other employment options. It offers business advice from successful entrepreneurs to Filipinos wishing to set up an enterprise. One Go! Negosyo caravan in 2006 had overseas workers as its theme and target audience, as it awarded notable overseas workers who ventured into businesses.68

The Colayco Foundation provides books, guides, and lectures on financial literacy for Filipinos in the country and abroad. The Colayco Foundation has also formed a cooperative, called Kapatiran sa Kasaganaan Service and Multi-Purpose Cooperative (KSK SMP Coop), composed of domestic workers in Hong Kong SAR after they were initially taught the basics of financial literacy. KSK has offices in the Philippines, Hong Kong SAR and Saudi Arabia. The Italy–Philippines Migration and Remittance Corridor

67 From the SEDPI website, www.sedpi.com. 68 From the Go! Negosyo website, www.gonegosyo.net.

124 The Italy–Philippines Migration and Remittance Corridor Annex 6 Annex 6: Philippine Cooperatives

Since 2005, the PCF (formerly the Visayas Cooperative Central Fund Federation) has been a conduit of the Livelihood Development Programme for OFWs (LDPO) of the OWWA and the NLDC for Region VII-Central Visayas. The LDPO offers migrants and migrant families enterprise -set-up loans of up to PHP 200,000 (USD 4,343). Since 2005, PCF has handed out 164 loans worth PHP 27.625 million (USD 599,815), indicating how cooperatives are an untapped source of financing for migrants and their families in the rural areas. Soon, PCF will launch a remittance channel for migrants while it plans to extend the geographical reach of its LDPO services to other areas, PCF being a national federation.69

A sister cooperative federation, VICTO National,70 just convened a national convention to introduce its over 200 members to the OF sector (Opiniano, 2009b).

NATCCO is a secondary federation with 254 member-cooperatives nationwide and assets worth PHP 682 million (USD 14,808 million). Some member co-ops also operate as outlets of Western Union with a peso value turnover of PHP 250 million (USD 5.428 million). NATCCO’s broad network allows its members to expand beyond remittances. Some of its members (e.g. Nagkasama Multi-purpose Cooperative, Abra Diocesan Teachers and Employees Multi-purpose Cooperative, Claveria Grassroots Multi- purpose Cooperative, and Sta. Cruz Development Cooperative) have other services for migrants and their families.71

In July 2009, NATCCO launched a Pinoy Online Fund for OFWs and microfinance projects. Set up in cooperation with the German cooperative bank BIBE, this flagship financial service seeks to encourage OFs to save and deposit their savings with NATCCO to avail of high interest. These savings, in turn, will be used by NATCCO’s MICOOP that hands out microfinance loans through NATCCO’s member-cooperatives. Depositors are entitled to automatic life insurance coverage, rebates, and a patronage fund upon withdrawal. The savings facility is an attempt to link remittances and microfinance and to have cooperatives assist OFs (NATCCO, 2009 ).

Cooperatives may also directly assist migrants to engage in business. SIDC, the country’s largest agricultural cooperative handling numerous agriculture-related businesses, is one example. Just recently, with the help of Atikha, SIDC encouraged Filipinos in Italy to invest in the cooperative’s growing egg farm business. A PHP 100,000 (USD 2,171) investment that is locked in for five years and that is also payable on instalment will yield a guaranteed annual interest of 6 per cent. SIDC will manage the egg farm business and the OFW investor will be considered a communal owner of the enterprise for a minimum of five years.72

Should migrant workers wish to start a business, the cooperative can coach and guide the migrant and the migrant’s family in running the enterprise. Eventually, the OF could join the cooperative, to avail of benefits such as the mandatory savings programme and start-up business loans.73

69 From key informant members Betta Socorro Salara, Eunice Enriquez and former overseas Filipino Susana Jimenez. 70 PCF was then a trust fund under VICTO but separated in 2005. Both VICTO National and PCF have agreed to maintain their mutual relationship given their historical origins. 71 From an interview with NATCCO. 72 Proceedings of the “Rome Policy Dialogue on the Italy–Philippines Remittance Corridor,” 19–20 May 2009, Rome, Italy. 73 From the IOM Thursday Forum series.

125 Annex 7: Profiles of Some Filipino Migrant Associations in Italy

Name of organization Activities / interventions

Association Philippines Service Donations to causes in the Philippines Sama-Sama Onlus (Turin) Trains children of Filipinos for cultural presentations Associazione Communita Filipina Promotes Philippine culture and integration (Rome) Provides information on migration issues Provides counselling and pastoral services to the Filipino community

Associazione Culturale Filippina Integration-related activities for Filipinos del Piamonte (Turin) Information, counselling and pastoral services

Associazione Nazionale Italo- Free Italian language courses Filippina (Milan) Legal assistance in tribunal cases Assistance in housing and personal loans Assistance for damage claims and indemnities

Associazione Pilipinas-OFSPES Leadership and social entrepreneurship training programmes (Overseas Filipinos’ Society for Community training learning centre (computer training) the Promotion Post-arrival orientation seminars of Economic Security) Research

Comunita Filippina di Napoli e Italian language classes Campania (Naples) Legal and employment assistance Medical assistance (including discounts for medicines purchased in pharmacies) Donations to causes in the Philippines (e.g. children, housing) Medication and education of Filipino children born in Italy Community Filippina in Toscana (Florence) Consular assistance to Filipinos

Community Filippina in Toscana Consular assistance to Filipinos (Florence) Support to Filipino indigenous communities in the Philippines

Filipino Community of Naples Assists Filipinos in Naples with their consular needs (Naples) Community contributions (e.g. donation to build a school building) Building of community spirit and camaraderie among members Filipino European Association of Support to a programme for computer literacy of overseas workers Empoli (Tuscany) Filipino Women’s Council (Rome) Support services for Filipino women, in particular domestic workers Training on empowerment and entrepreneurship

The Italy–Philippines Migration and Remittance Corridor Research, advocacy, lobbying, networking, intercultural mediation

La Filippiniana Associazione Provides temporary work and shelter to distressed Filipino workers Onlus (Milan) Social services, legal assistance, rescue efforts from house arrest by stay-in domestic workers, financial assistance Supports a health charity centre in Zamboanga City, southern Philippines

Sentro Pilipino Chaplaincy Network of 48 Filipino Catholic communities in Rome (Rome) Has a commission on youth and family programme that provides parent–youth forums; marriage enhancement seminars; counselling services and a hotline; and family service groups Services such as: job referrals; health centre; Italian classes; radio programme

Richard Gabriel and Josephine Scholarship grants to children from Tarlac and Pampanga Sonza-Gabriel Foundation provinces, Philippines (Milan) Advocacy against illegal drugs (e.g. symposium)

74 Sources: Charito Basa from MamaCash, 2006; IOM Rome Policy Dialogue on the Italy–Philippines remittance corridor (19–20 May 2009); Internet searches; The Kabayan Times; information from the website of the DFA; OWWA.

126 The Italy–Philippines Migration and Remittance Corridor