Preparing for OFW's Return

THE story sounds all-too familiar: An OFW toils abroad, sends intermittently to his family back home. The recipient spouse spends the money indiscriminately, mostly on unnecessary luxury items. The OFW comes after the end of the contract and continues to spend what is left of his earnings. When there is nothing left, the OFW is forced to go abroad once again to repeat the cycle. During the global economic recession, with businesses and companies frequently closing, many overseas jobs have disappeared, forcing the OFW to stay home indefinitely with no work prospects either to home or abroad.
To prepare OFWs from such an eventuality, policymakers, economists and politicians have time and again urged OFWs and their families to save and start a small business, even a home-based venture operated by family members. But there are numerous problems and obstacles along the way. Foremost of these is the meager remittance that finds it way home; in some cases where there are opportunities to save, there is the propensity of OFW families to waste the savings on unnecessary items. And in the few instances that OFW families are ready and willing to invest in a small business, there are the problems of choosing the right venture and making a go of it.
Lacking business acumen and skill, many OFWs usually resort to the most common and seemingly simplest ventures – opening a sari-sari store, operating a tricycle, jeepney or taxi, or engaging in buy-and-sell or loan shark (aka 5-6) operations.
“Only a small number of enterprises run by former overseas workers are growth-oriented,” observes Rhodora Hizon of the non-government group Center for Small Enterprises (CSE), which provides technical assistance and training to small enterprises worth over a million pesos. She calls these ventures owned by former OFWs as “micro-micro enterprises.”
Based on government data, it is estimated that there are more than 700,000 micro-enterprises, 62,000 small enterprises, 2,000 medium-scale enterprises, and 2,000 corporations in the country today. Within these micro-enterprises, those with assets worth P100,000 and below are “micro-micro,” P100,000 to 1 million are “middle-micro,” and P1 to P3 million are “mezzanine micro-enterprises.”
Hizon says preparation is the key to any OFW start-up business’ chance of success. “If you really want to manage a business, you should already know what business you will set up, and the risks involved in entrepreneurship will then become calculated risks because you have planned for those already,” she says.
Preparation involves equipping oneself with the prerequisite skills, and also a “careful self-assessment” on the part of the OFWs about their capacity to engage in business. “Part of this assessment is if the entrepreneur has plans to make the business grow.”
Whatever the prospect might be, experts emphasize that it must be a business that the entrepreneur has a passion for. Entrepreneurship or getting into business is harder than being an employee. There are numerous factors and systematic challenges one has to hurdle in starting a business. The simpler ones include registering the business and getting the needed licenses and permits. The more complex problems involve choosing the right store location, haggling for the lowest lease rates, finding suppliers and doing market research.
To assist would-be entrepreneurs and returning OFWs get their feet wet, so to speak, and provide them with timely and up-to-date information about the wide opportunities open to them, a group of businessmen has organized an annual event called the Mega Balik-bayan Expo and OFW Summit. Its goal is to help OFWs and their families prepare for their future through income preservation and entrepreneurship in the Philippines.
According to Mitch Ballesteros, Chief Marketing Officer of event organizer Ex-Link Corporation, it is extremely important for every OFW to create a contingency plan for the day when overseas work comes to an end. “At first, they are just paying for their debt incurred in going abroad. In the second year, they tend to enjoy so much and become extravagant with the earnings they have.”
She continues: “If they don’t invest in something that can give or provide sustainable livelihood, like having business or being an entrepreneur here in the Philippines, they will just end up with empty pockets and start all over again at zero.” Based on Ex-Link Corporation’s research, the great majority of returning OFWs are unable to establish a secure future for their family.
Currently on its 6th year, the Mega Balik-bayan Expo has given free livelihood training and seminars for OFWs. Its objectives are two-fold: to provide ideas and methods of income preservation and growth through entrepreneurship and legal investment channels via its assortment of business booths and stations; and to educate OFWs on basic entrepreneurial and financial literacy.
During the three-day event last December at SM Megamall in Mandaluyong City, various business opportunities and investment tools available in the market were showcased. Booths and stands exhibited many possible business services and ventures OFWs can explore, including realty business, business franchises, product dealerships, financial and insurance investments, retail businesses, technology ventures, educational institutions, and health and wellness products.
Ballesteros cites other potential ventures. “Aside from the transport business that they can venture on, we have online business solutions and technology. The more popular ones are food business, buy-and-sell business, gifts, and fashion items, and multi-level and distributorship business.”
There are also Filipino-owned franchises, which require much lower capital than foreign brands. Mostly food and snack stalls, these ventures need only a first-year investment of between P200,000 to P500,000, with payback within three to five years.
“We invite OFWs to invest their money on business here, cultivate a long-term and sustainable livelihood or business entity in our country, offer local jobs to our countrymen, and help each make our economy strong. No one will help us except us Filipinos,” Ballesteros exhorts. “We can help each other establish the Philippines as the next economic tiger of the world. Don’t just spend your hard earned money on material things. Instead, put them long-term business opportunities where you can have a sustainable livelihood and leave a legacy to your family.”