Remittances a boon for Philippines, but at what cost?

Sturdy houses with concrete foundations now replace the thatched huts of a generation ago. There are new cars, washing machines, children attending private schools, and former sharecroppers who have purchased the farms where they once worked as lowly laborers.

Such economic progress has come from remittances, the staggering $1 billion sent to families nationwide each month by Filipinos working overseas in an attempt to overcome extreme poverty and joblessness in their native land.

Since they began leaving their island nation in droves in the early 1980s, Philippine workers have become a staple in other nations, with the money they send home in many cases remaining steady despite the worldwide financial crisis.

Filipinos sent a record $1.5 billion home in June as more sought work abroad. Remittances for the first six months of 2009 reached nearly $8.5 billion, a 2.9 percent increase over the same period last year.

In her annual state of the nation address in July, President Gloria Macapagal Arroyo hailed remittances as a driving force behind the economy. Labor Secretary Marianito Roque separately described the remittance system as a source of pride.

“The flow of overseas worker money in an unstable global economy demonstrates the resiliency of the Filipino people,’’ Roque said. “Under the worst circumstances, our workers are getting jobs and sending home more money than ever. They are keeping the boat stable.’’

But some critics say the money comes at a continued social cost. The poverty-stricken nation of 90 million has seen 10 million workers - more than 10 percent of its population - join the overseas labor force.

The exodus of trained teachers, health professionals, and engineers, some say, has done the Philippines more harm than good as those much-needed services go elsewhere.

There are also distinct social problems that arise when heads of households leave for greener economic pastures, officials say.

Although Noble, the police chief, praises the financial boost remittances give his town, he said the system is draining the Philippines of a prized resource: its people.

“Every day you look and shake your head,’’ he says, “to see that someone else is gone.’’

Many Santa Barbara residents realize they must leave their isolated town to achieve a better life. But with millions of the poor living atop garbage dumps and under bridges in Manila, they know their nation’s capital is not the solution.

And so they go abroad: One in 10 of Santa Barbara’s 80,000 residents work in places such as Italy, Taiwan, Singapore, and the United States.

But recent months have hit hard. Since last fall, when the global financial crisis struck, many overseas workers have been forced to secure second and even third jobs to keep the remittance flow constant.

About 200,000 overseas Filipinos have lost their jobs since then, economists say. Many have returned to the Philippines, where, accustomed to the better salaries and working conditions abroad, they often do not want to take any available jobs.

Others are hounded by job placement businesses to repay hefty travel and work setup fees the agencies laid out in advance of workers leaving the Philippines.

The remittance system has also altered the lives of the stay-at-home families of overseas workers.

A recent International Monetary Fund study found that many extended families of overseas Philippine workers are refusing to pursue jobs at home that they consider too low-paying, preferring to rely on their monthly remittance cut.

There are social problems as well.

As parents leave home, children get left with relatives or friends who may not provide adequate supervision, which can lead to substance abuse and gang membership, says Tony Sarmiento, a Santa Barbara city official in charge of monitoring the overseas worker program.

“The worst part of this human export policy is that [the government doesn’t] make the hard choices back home,’’ said Benjamin Diokno, a professor at the University of the Philippines School of Economics.