Taguilaso, Arabella

BSA 2121-A

LABOR EXPORT
Reflection

The prevalence of labor export in the Philippines plays a crucial role in its economy as it has
contributed significantly in terms of earnings from taxation in foreign exchange. Tax rates
vary between 5% to 33%, of which the equivalent amount is converted as additionals to the
country’s income. Although there is a considerable beneficial impact from tax remittances
which somewhat contributes to the increase in income of the country, its opposite equates to
an inverse relationship between economic growth and exchange rates. Meaning, as the
economy of the Philippines increases, the exchange rate decreases thus affecting families
supported by Overseas Filipino Workers (OFW).

Working back on this issue, it is evident that the Philippines is highly dependent on the
income from taxation in foreign exchange rates. Exporting workers as a form of earning
definitely means that the country lacks job opportunities and has weak economic
performance, which is why citizens choose to work overseas. In order to address this, the
country should create sustainable employment opportunities for its citizens. As per our
lecture, the professor shared with us that creating an industry exclusive in the Philippines
would open opportunities for Filipinos to maximize their knowledge and skills for the job that
they are most suitable for. Moreover, it is a primary issue of the Philippines that its academic
sector offers a curriculum not aligned on the actual needs in the real world. Upon
observation, a number of companies only hire employees who have experience, which is why
those who are still new in the industry find it hard to be accepted. Most of the time, students
who graduated with latin honors, or those who have graduated from universities that are
considered prestigious based on the hierarchical structure formed, are the ones prioritized.
Those that do not qualify for the degree of education required as well as those who lack
experience choose to work abroad. Hence, if the Philippines offers stable jobs, it positively
affects the social and economic sector of the country as it increases the purchasing power and
boosts domestic consumption, considering that citizens are offered with job opportunities. In
turn, it contributes to economic growth.

Furthermore, it is important that the country invests in its local industries as it also diversifies
the economic base. Investing in local industries promotes economic self-sufficiency by
Taguilaso, Arabella
BSA 2121-A

reducing dependency on foreign goods and services. This helps in creating a more robust
economy that is less vulnerable to global economic fluctuations. Moreover, investing in local
industries fosters innovation, technological advancement, and skills development within the
country. This, in turn, enhances competitiveness on a global scale and can attract foreign
investment.

In conclusion, offering sustainable jobs and investing in local industries are strategic moves
that not only strengthen the domestic economy but also provide social and economic benefits,
making the country more resilient to external economic challenges. The more that the
Philippines is not reliant on income from foreign exchange, the more that the citizens will not
have the need to work overseas. Thus, minimizing the risk of being affected by the mentioned
inverse relationship between economic growth and exchange rates. In addition, the growth of
the Philippine economy will not become a problem for its citizens, hence only creating a
positive impact for both its people and the country.