Philippine migrants feel the pinch of skyrocketing inflation

Mayumi Marie, a Filipino national living in Germany’s capital Berlin for 10 years, sends money every month to her parents in the Philippines to cover their medical costs and everyday living expenses.

She also supports the education of her economically disadvantaged but deserving younger cousins.

“My mother has always believed that sharing is caring. Those of us who are doing better in life have a moral and family obligation to help others,” Marie told DW.

These kind of overseas remittances serve as a safety net for many Filipino families.

In fact, the Philippines is the third largest remittance receiving country in the world, after India and China. Remittance inflows to the Southeast Asian nation amounted to 1.72 trillion pesos ($33 billion, €28.9 billion) in 2017, contributing up to about 10 percent of the country’s gross domestic product.

But in recent months, many Filipinos, both inside and outside the country, have been hit hard by rising inflation and a tumbling currency.

Read more: Filipinos resist China-funded dams amid Beijing’s growing clout in Southeast Asia

Inflation in the Philippines jumped to an almost 10-year high in September, with consumer prices rising by as much as 6.7 percent, up from an increase of 6.4 percent in the previous month, government data showed recently. This means the Philippines now has the highest inflation rate among ASEAN countries.

The nation’s currency, meanwhile, has been hovering around a 13-year low, with one US dollar now fetching as much as 54 Philippine pesos. The stock market has also slumped about 17 percent since December, making it one of the worst performers worldwide.

The combination of accelerating inflation and plunging currency has eroded the real value of Filipino remittances.

Philippinen, Manila: Präsident Rodrigo Duterte hält eine Ansprache (Getty Images/AFP/N. Celis)

President Duterte justified the rise in inflation rates saying that it was an expected reaction to external trade factors like the rising price of oil

The value of a Filipino migrant worker’s average monthly remittance has dropped from 20,000 pesos (€328, $374) to around 16, 982 pesos (€279, $318), according to labor rights group Migrante International.

“That is 1,078 pesos (€18) lower from the real value recorded in the same period last year,” Migrante International said in a statement.

“The amount of money we send back home now needs to be doubled, if not tripled, and it’s taking a toll on us here in Europe. Instead of enjoying our hard earned money here, we have been forced to tighten our budgets to support our families back home who depend on us,” Marie said.

Duterte: ‘Nothing we can do’

Philippine President Rodrigo Duterte justified the rise in inflation rates saying that it was an expected reaction to external trade factors like the rising price of oil. “There is nothing we can do…We don’t have the buffer on oil. The reserve, we can just increase little by little, but we don’t have that luxury, and that is why inflation is high. You can crucify me, behead me, I cannot do anything in oil,” Duterte said in a speech referring to the fact that the Philippines is not an oil producer.

“Inflation affects overseas Filipino workers (OFWs) primarily by eating away at the real value of the remittances they send back home,” said JC Punongbayan, an economist at the University of the Philippines.

“Inflation, in fact, can be considered a tax on people’s incomes, and this is made worse by the fact that slower GDP growth means a smaller economic pie for everyone to enjoy. The double whammy that is slower growth plus unabated inflation poses a real threat to the purchasing power of families of migrant workers,” Punongbayan told DW.

Public opinion polls show that the rising inflation rate is the foremost concern for 53 percent of Filipinos.

In mid-October, in a bid to tame inflation rates, the government’s Finance Department announced that it would suspend the implementation of the second tranche of fuel excise taxes scheduled for early 2019.

Duterte remains popular

Some rights groups, however, have criticized that the government isn’t doing enough to resolve the inflation problem.

“Filipino migrant workers and their families will not just sit back and watch as the regime plagues the country with anti-people policies. There will be an outpouring of the Filipino people’s collective wrath against the Duterte regime,” Arman Hernando, spokesperson for Migrante International said in a statement.

Read more: Saying mining is ‘raping’ us, Philippines minister continues crackdown

Others say the current situation, as difficult as it may be, may not sway migrant workers to withdraw their support for Duterte. These workers formed a sizable base of support whose vote played a critical role in ensuring Duterte won the presidency in 2016.

“The majority of our migrant workers are low wage earners. They will really feel the pinch of inflation and so will their families,” Ellene Sana, executive director of labor rights group Center for Migrant Advocacy, told DW.

The government has been slow when it comes to reforming its migrant worker policy, but Sana doesn’t see Duterte’s popularity waning as a result. This president has supported the overseas Filipino worker community in ways that other presidents had not in the past, she said.

“This is a constituency that felt that their woes had been ignored by the government. That’s why Duterte’s attention and personal touch means a lot to them. His fury about abuses committed in destination countries and his consistent engagement with migrant communities whenever he is abroad have made migrant workers feel that he is their ally and their defender,” Sana said.