Boom times in the Philippines’ call center and OFW economy

According to Associated Press “reporter” Teresa Cerojano who wrote an AP article, the Philippines’ much hyped economic “boom” was credited by “many” to the “new vitality to the policies of President Benigno Aquino III, elected in 2010 on promises of eradicating graft and fighting poverty.”

Perhaps. But the indicators of this growth cited by Cerojano revolve mainly around, you guessed it, growth in the retail and real estate sectors — areas where real “gains” are accounted for the most by the tiny 10 to 15 percent of the population that enjoy incomes considered to be beyond merely “disposable”. In the Philippines, mere “disposable income” constitutes the small change that is left over after food, clothing, and shelter obligations have been paid for. For the average Filipino, this is usually not enough to buy anything more than a couple of hours in an internet kiosk or the odd celphone load.

Yet, Cerojano’s AP “report” makes it look like the Philippines is suddenly every Filipino’s retail and property oyster…

The growing affluence and a burgeoning population have lured many global brands. Students and office workers flock to gleaming outlets opened by Zara, Gap, Forever 21, Starbucks and Japan’s Uniqlo. New apartment blocks are springing up on almost every corner of metropolitan Manila and other cities, often clustered around malls and office buildings housing outsourcing businesses such as call centers, which are forecast to earn around $25 billion by 2016.

Luxury car maker Rolls Royce said it was flooded with inquiries since it opened its first dealership in Manila two weeks ago. The first car selling for $ 605,000 went to a popular TV show host, according to newspaper reports.

Filipinos 'included' in BS Aquino's 'inclusive growth'
Filipinos ‘included’ in BS Aquino’s ‘inclusive growth’

You wonder if Cerojano fails to see the irony in what she asserts or whether she is deliberately injecting irony in her report when she writes…

“Disposable income has increased and we see a rising middle class,” said Jose E.B. Antonio, chairman of Century Properties Group that brought in Donald Trump’s sons and Paris Hilton to launch luxury condos in Manila.

Sheila Abay, a real estate agent for the past 10 years, said competition in her industry has become stiffer but she still sells more condominiums these days compared to five or 10 years ago.

So if it is the sudden “accessibility” of high-rise condos, P200 Starbucks lattes, Gap shirts, and $600,000 cars to Filipinos that is being construed as “inclusive growth” here, then perhaps we may as well write off the rest of the 85 percent of the Filipino population whose disposable income buys them simple family outings in Luneta as exempt from this “report”.

That is not such a new concept as it has always been the case that the majority of Filipinos have largely been an invisible statistic as far as efforts to paint the imagined greatness of the Philippines have gone. To be fair, the “report” did define the tiny domain within which this perceived new “affluence” is being felt…

The bulk of [Abay’s] clients [in real estate] are Filipinos working abroad, who buy property for retirement or investment. Over the last few years, however, she said she has seen a growing number of younger clients mostly aged 25 to 35. Many of them are mid-level managers at outsourcing companies who receive good pay for doing backroom operations for overseas companies.

There are two countries within the Philippines — (1) the nation of call centre workers, OFWs, and their families who able to afford to shop in the Gap, and (2) the nation of everyone else who can only sit and watch this most recent “boom” pass them by yet again.

[Photo courtesy Gulf News.]

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9 Comments on “Boom times in the Philippines’ call center and OFW economy”

  1. I don’t know, it sounds to me she’s just reporting on what’s happening in the Filipino middle class, which IMO, is the most ignored part of the Filipino population. It’s actually nice to read that something positive is happening within this class — it’s always either about the rich, who get away with so many things, or the poor, who are given so many things for free. The middle class? Heavily taxed, yet have to work harder than anyone else if they want to live in proper homes outside of squatter areas, send their kids to the expensive private schools that’ll provide the “competitive” kind of education, and purchase luxury goods that have unnecessarily become essentials like cars because just try to have a work-life balance in a congested Philippine city without one.

    Your own post on the article reads to me as another one of those “Oh, but what about the POOR?” commentaries. Yes, I agree with you that the wealth isn’t being distributed, but c’mon — how about just being happy that someone has recognized that the middle class is growing? Obviously, I’m in the belief that the middle class has the most power to affect change in a country. The Philippines has been dragged down to the levels of the poor for far too long — always thinking displays of any kind of wealth are evil, feeling guilty when enjoying even a bit of hard-earned money, because omg, there are poor people suffering all around us. It’s time we brought the poor UP to our levels. That’s a whole ‘nuther discussion entirely, so I’ll end it here.

    1. I did cite towards the end of the article that the author did define the sub-domain within Philippine society where the “reported” growing affluence is being felt the most.

      Indeed, I agree. What about the poor? is a question I myself will probably answer with So what about them? History has proven that nobody can help the poor — not even Mother Theresa could help them. So perhaps we should wholeheartedly celebrate those who actually succeeded at helping themselves instead of pretending that all these “efforts” are geared towards “alleviating poverty”. Ultimately, economic gains are reaped by those best positioned to reap them.

      The poor will always be in the most disadvantaged position to access any opportunities that fly by. They don’t call ’em poor for nothin’.

    1. Producing stuff that both domestic and foreign markets value and are willing to pay a premium for is where the solution lies.

      So the problem statement that frames the solution you ask for is this:

      How do Filipinos develop the capability to produce stuff that people want?

      Is the answer to that question the solution you ask for? I believe it is — it is an answer everyone who wants to make a bit of money seeks. Some succeed at finding that answer. Some don’t.

  2. Here’s an article on the income classification and percentage of Filipinos in the income bracket in year 2012.

    The study shows that the middle class in the Philippines is too small (9%) versus D and E (60% and 30% respectively).

  3. Benigno, for once, I agree with you.

    Especially with this: “whose disposable income buys them simple family outings in Luneta as exempt from this ‘report'”

    Although that is not even accessible for most. Having an outing in Luneta would cost a family of 5 around 600 to 700 pesos in food and transportation. That amount is even too high for most.

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