Dark Side of Remittances

Illustration by Smruthi Gargi Eswar ©2010

February 28, 2010

It was disappointing to see that someone in a trusting position of accepting money for remittances stole from a bank and may have cheated those remitting money as well. It was reported that Ana Maria Villadiego Villegas (also known as MaryAnn) and Armilaine Salamat, (also known as Armilaine Legaspi Lizama or Armie) were arrested on one count of conspiracy and three counts of wire fraud for defrauding the Philippine National Bank of $109,855.33. The indictment states that Salamat was the manager of PNB Express and Villegas was co-owner of Philippine Express Remittance.

Villegas had four bank accounts that she used to remit money from the CNMI to the Philippines using PNB Express. Salamat allowed Villegas to draw money on checks with insufficient funds. Villegas filed a bankruptcy petition in the US. Bankruptcy Court of the NMI listing PNB as a creditor in an attempt to get out of her $109,000.00 debt to the bank.

The Saipan Tribune reported that Villegas was arrested in 2005 for allegedly stealing money from customers. From the October 2005 article:
Police charged 38-year-old Ana Maria V. Villegas, owner of Philippine Express Remittance in Susupe, with theft and theft by deception.

The charges appear different from reported claims by certain customers of Philippine Express that the establishment allegedly failed to remit money to their intended recipients, mostly in the Philippines.

In an affidavit submitted to the Superior Court, police detective Patrick Earl Maanao enumerated at least four persons who were allegedly victimized by Villegas.

Based on the affidavit, two of the alleged victims, Mary Grace San Gabriel and Fe N. Alejandro, claimed to have given the amounts of $1,800 and $1,000, respectively, to Villegas for a “sponsorship” scheme that involved the defendant's promise to employ their relatives in her company. These victims told police that the money relates to fees for the processing of their relatives' employment documents.

A certain Marcelina Salvador claimed that Villegas borrowed some $10,000 from her, with the defendant allegedly representing that she would use the money to expand her business.

Police said Villegas was also involved in a cooperative-like scheme, wherein investors would pool a fixed amount of money on a semi-monthly basis, with the pot going to one of the participants during a certain period. Under the scheme, all participants would have their turn to get the pot.

However, Analyn Tapdasan claimed that she did not receive the pot money when it was her turn to receive it last September. She told police that she has invested $300 under the scheme.
The story continues to detail the woven scheme.

It would be very difficult to locate an overseas worker who wasn't sending remittances to support their families back home. Remittances represent economic security not just for families who receive the money, but for many labor-exporting countries.

Here is an article I wrote, The Dark Side of Remittances, that was published in the Asian Development Bank magazine, Development Asia in January 2010:
Many in the international development community have come to see remittances— the money sent home to their families by overseas workers—as something of a panacea for reducing poverty. Loving family members working in wealthy nations send money directly to those who need it most in the world’s poorest countries.

But the relationship is not that simple. Asian countries have become dependent on human exports to sustain their economies through remittances. The World Bank estimates that 190 million migrants remitted $397 billion in 2008. Remittances to India were $52 billion that year; the People’s Republic of China, $40.6 billion; and the Philippines, $18 billion. Even Viet Nam, which is relatively new to the labor-exporting game, received $7.2 billion.

“Workers flow out, money flows in” has become a mantra for Asian nations. The money sent to countries through banks is counted as part of the home country’s dollar reserves and helps strengthen the bid for loans. Remittances have also been credited with lowering poverty levels in labor-exporting countries. Foreign workers not only serve their employers but also their home countries.

Commodifying People
The exportation of labor has a social and human cost that is often ignored or minimized. Across the globe, stories of exploitation and abuse have cast a dark shadow on the economic gains of labor exporting countries. These countries are responsible for protecting the dignity and rights of their citizens who work overseas and for maintaining the social fabric of their society. These workers are often regarded more as commodities rather than as valued citizens.

Family relationships are severed as a parent or parents work overseas. Ironically, many female overseas workers serve as domestic helpers who raise other families’ children while relatives raise their own children. Years of separation also weaken marriages and relationships with the children.

The majority of the workers who go abroad expect to experience some cultural and language difficulties. Unfortunately, that may be the least of their worries. Vulnerable workers, who are often little more than indentured servants, find themselves systematically dehumanized. Employers hold their passports and restrict their freedom by confining them to their living quarters. Many work for free in the first year because they need to pay back fees for recruitment, passports, and other required paperwork.

The first place to stop abuses is in the country of origin. Sending laborers abroad is a highly profitable business for recruiters, and manpower agencies. Government employees have been accused of helping minors and others sneak past immigration officials with fake documents resulting in dire consequences. Minors who were promised jobs as waitresses have found themselves trafficked into the sex trade.

Kickbacks and commissions have resulted in an oversupply of workers as companies enlist more people than they can employ. Scammed workers who paid thousands of dollars to work abroad have found themselves jobless once they reached their destination. Such was the case of an estimated 1,000 workers from Bangladesh, India, and Sri Lanka who paid recruitment fees of $2,000 for a chance to earn between $600 and $800 a month in Iraq. Their passports were withheld and they received no pay. In December 2008, the men protested in an abandoned Iraqi airport where they were housed in tents.

Each year, tens of thousands of expatriates across the globe find themselves victims of labor abuse, unpaid wages, and other contract violations. Living as a disenfranchised underclass, they endure the most stoic of living conditions, sacrificing to fulfill their moral obligation to send money home to their families.

Giving Workers a Voice
One such worker, Buddhi Lal Dhimal, a Nepalese foreign worker in the US Commonwealth of the Northern Mariana Islands, went to the Department of Labor repeatedly to request help in getting the $2,400 owed to him by an unscrupulous employer. He needed to send the money to his family, according to his daughter Pabitra Dhimal. Finally, after he was told that he would be deported without the money, he doused himself with gasoline outside the labor office and set himself on fire. He died a month later.

In some extreme cases, in which workers have been hanged, beheaded, tortured, or wrongfully imprisoned, governments have spoken out and attempted to intervene.However, for the tens of thousands of workers who suffer daily, instead of outrage, the labor-exporting nations that sent them overseas turn a blind eye to abuses or remain silently complacent. Abused workers have fled to their foreign embassies or consulates only to be returned to their employers. Maintaining diplomatic relations while nationals suffer rather than risk losing remittance funds is not acceptable.

Development organizations, which promote labor exportation as a measure to reduce poverty, share in the responsibility of protecting workers. They should use their influence with the labor-exporting countries to enact and enforce stronger regulations to protect these workers, or restrict or stop the flow of workers overseas entirely when abuses occur.

Many of the workers come from the lowest stratum of society and possess little political power or influence. It is therefore up to all of us to give voice to this situation to ensure that laws and public policy protect citizens whose rights must not be secondary to their economic contributions.


the teacher said...

This is a tremendous article Wendy, strong work.

The statistic that jumps out is the Philippines. While has three times the remittances, they also have 16 times the population. PI is the only nation whose number one GDP is people, expected to grow by 9% in 2010. At the risk of insulating sensitive people that have been taught deep rooted nationalism, I sincerely believe the government is encouraging overpopulation, or intentionally growing people for export.
This combined with substandard educational opportunities leaves poorly skilled women at risk for human exploitation in the sex trade industry.

Perhaps the most serious issue there is the effect the world economic crisis will have on the general population. As the industrial countries experience unemployment at home, the trend will be to reduce guest workers with tightened immigration laws, reduce investment in the third world by returning to protectionist strategies, and they will greatly reduce aid to the third world as well, which has already happened (pledges of aid to developing nations was not met in 2009 and was slashed).

The starvation rate there is staggering and growing, that combined with the political killings(and refusal to respond to repeated UN requests over the past 15 years), according the UN, “is troubling and grave”.

Anonymous said...

PS First line above should say "while India has 3 times the remittances, they have 16 times the population"..

Anonymous said...

"I sincerely believe the government is encouraging overpopulation, or intentionally growing people for export"

I have to disagree with you this time Ron. The Philippine government is not encouranging the over population or population explotion. Where did you base your opinion? Have you gathered facts, done a study?

It is the other way around. In fact the Phil government is convincing and encouraging the people to use "contraceptives" or "population control" through out the country to the extent of clashing with religious sect, that is not in conformity with the idea. (what happens to the constitutuion's separation of church & state?). Contribution to the population is every individual's discretion.

I also disagree with your generalization that the substandard educational opportunities leaves poorly skilled women at risk for human exploitation in the sex trade industry.

Moral is the contributing factor to human exploitation in sex industry. Philippines still has a lot of good schools, colleges & universities to boast for..yes, there are still educational opportunities. Earned degrees however does not guarantee a person's mores & value to have the right disposition to take the road of good living.

Starvation...it is universal now. Yes, I agree with you on this one. It is our government's fault. The officials are just enrinching themselves and pushing the common people to the ground.

Political killings, well I can list some more countries that have higher rate compared to Philippines but I don't want the readers to get bored of reading a saga.


the teacher said...

VS, my comments are not personal or directed toward anyone, and are just unscientific observations. I have no nationalism for my own homeland and have always been critical of the government.

“I have to disagree with you this time Ron. The Philippine government is not encouranging the over population or population explotion. Where did you base your opinion? Have you gathered facts, done a study?”

No VS, I have not done a study, but I know the government profits so much on remittances that it is tracked on the nightly news as source of economic and national pride. Sending your finest away to improve other lands, isn’t a source for pride, it is one shame.

“I also disagree with your generalization that the substandard educational opportunities leaves poorly skilled women at risk for human exploitation in the sex trade industry.”

Some of this generalization stems from 15 years experience teaching here, which includes hundreds of students that have already graduated HS in the PI public education system. Waves of those graduates could not identify anyone on a list of the most influential people of the last millennium, from Martin Luther and Newton, to Edison and Guttenberg, to the stubborn man from Campi…a complete blank. I know ISM is a highly accredited school but it is attended and funded by expats and I am sure there are many good schools and teachers in PI, but the overall educational level is abysmal.

“Political killings, well I can list some more countries that have higher rate compared to Philippines but I don't want the readers to get bored of reading a saga.”

Actually the UN has warned PI over a 15 year period and the government refuses to submit reports and investigational data. UN studies of reporting obligations concerning political killing in the Philippines, “does not look good” according to the the Southeast Asia Team of the Nobel Peace Prize-winning human rights group Amnesty International (AI) assessed the Philippines’ record on reporting obligations to United Nations (UN) treaty bodies. 15 reports are overdue, 7 are 5 years overdue, and 5 are ten years outstanding.

Targeting and retaliation against newspapers, individuals, other media, and potential representation is also disturbing. The fact that citizens are afraid to sign their name or speak out against repression is worse.

Anonymous said...

The Teacher,
Professional from the PI are in-demand all over the world, so education there is not what you think. Many foreigners from all over the world continuously studying there; I have a lot of classmates and saw other foreigners in my school before.
Can you explain why you can not even summed up the numbers of workers in the previous post? where are you graduated?

TAGLISH said...

V. S., I am a Filipino but the teacher is right.
If our government is really sincere about the population control, they can do it. No one in the government wants to do it because they need to keep their offices.
He is right, our government is in fact encouraging overpopulation, so that we would have the manpower to supply to other countries. Our government takes pride in this, isn’t that shameful? Look at our nurses, for example, our government is obviously pushing them to go abroad. Look at how these politicians praise and reward the Filipinos abroad and how they ignore the true Filipinos on our land. It’s our government that should provide jobs for us and should find a way to keep us together in our homeland. Our government doesn’t know how we feel every time we leave our family behind, they care only for the remittances. We became the bread and butter not only of our family but also our government, don’t you realize that V.S?

red october said...

Well said taglish and I agree with teacher.Phil. populations is very scary and whoever win as a president this coming may 2010 presidential election,whatever promises they are saying now for the good of the people? They are "liar" With billions of dollars in foreign debts, exporting manpower will continue and thats a reality.

red october said...

Well said taglish and I agree with teacher.Phil. populations is very scary and whoever win as a president this coming may 2010 presidential election,whatever promises they are saying now for the good of the people? They are "liar" With billions of dollars in foreign debts, exporting manpower will continue and thats a reality.

Anonymous said...


I can list all the shortcomings, malpractices, injustices and BS that the Philippine Government is doing (***just citing one), I assure you that. My point is that the government is not encouraging the people to do it. Juan Flavier spearheaded the campaign, gov't distributed paraphernalia's, seminars, supplies for birth control, etc . The Roman Catholic Sect issued its statement against the drive and was very vocal about it. My point of argument is "Encouraging the Filipino to go abroad is definitely not the same as encouraging the people to make babies. The government did not say, go on and multiply. It still is the person's discretion to donate to the population. I "realize" and know that we are the bread & butter of our country, but it is not what I'm pointing out. It is the Teacher's generalization without hypothesizing first.

***I've read in one of the books (I forgot the title, it was a long time ago) that the Filipinos are one of the most intelligent people in the world. Why is the Philippines not progressive then? It is because Filipinos are so smart the most of us wants to be a leader, not a follower. Everybody wants to lead, nobody wants to follow.

In as much as I don't want to say this, I have to. From most of what I read from the teacher's posting, he tries to attack the Philippines & Filipinos most in all the chances that he can get.

Political Killing? Don't I know about it. You might have not experienced what I had. Tear gas? Not my point either. He only singled out the Philippines, that it what I am rebutting about.

Don't think that I don't symphatize with most of the contract workers' plight. I do, because I'm one! I just don't agree how the Teacher singled us out without studying the facts or being fair in writing.

Venusa Saturnina

the teacher said...


I do not think this comment is fair or accurate and is not true.

"From most of what I read from the teacher's posting, he tries to attack the Philippines & Filipinos most in all the chances that he can get."

Comments about governments are not about their residents or citizens. The cold war between the US & Russia wasn't between its people, it was a struggle between governments. I am critical of the governance in PI with regard to economics, inequity, corruption, and injustice that doesn't appear to be improving, and is clearly getting worse.

In my first trip to PI the country seemed to be a progressive nation immerging, well ahead of Thailand and Indonesia. They were also able to feed themselves without charity or food imports. Now Indo is a G-20 nation after democratic reforms and a campaign against corruption. Their stability has led to much foreign investment that PI will not see until reform measures are instituted. Thailand is close to an industrialized nation whose tourism is off the chart and they are Asia’s primary exporter of rice. Oddly enough, the number one customer is PI, who can no longer feed themselves and rely on remittances and aid to pay the rice bill. This, coupled with organized units of orphans begging in the street for organized crime, a shameful worldwide reputation for sending girls into the sex trade industry, the attacks by the government (including Her Excellency) on freedoms of speech and press to repress the people, an alarming number of political murders and executions (according to the UN and AI, not my data), and a government recently referred to by the UN (not by me) as a kleptocracy [rule by theft], and the alarming authority the church has over the people, leaves us to wonder when the people there, and abroad, will stand up and say enough is enough and do something to improve the lives of so many imperiled people.

I don’t know what humans are the most intelligent and don't care, but I do know a nation of people that face catastrophic starvation currently at 20% and rising, with governance among the world’s worst.

Anonymous said...

There are a lot of religious bigots posting to this blog.

Human life is a gift of God, a blessing of infinite dignity and worth, of unlimited potential, and the solution to the world's problems.

It is not and never has been a privilege granted by the state, nor a commodity to be exploited by big capitalism, big labor, or big government.

Nor is it that way in the Republic of the Philippines. Each Filipino lives life according to his or her own conscience -- if anything the RP government, under pressure from USAID, has been trying to suppress fertility through intensive "PopCon" and "Family Planning" propaganda, outreach, and conditions of American foreign aid and grant assistance. Especially under Democrat administrations.

TAGLISH said...

Very well said, Teacher!!

I think VS should read between the lines.

Thank you Wendy for your hardwork, we really appreciate it.

red october said...

The teacher is not atacking the entire filipinos (in my own understanding)and I'm not offended by his brief summaries,he have the wit of how our country run by elites and super intelligent politicians.
"you said"
I've read in one of the books (I forgot the title,it was a longtime ago)that the Filipinos are one of the intelligent people in the world,Why the phillipines not progressive then? It is because the Filipinos are so smart the most of us wants to be a leader,not a follower,Everybody wants to lead,nobody wants to follow." I disagree and I'm sure millions of filipinos worlwide will turn thier heads left and right.("think before you act" my dear kabayan and peace be with you.

Anon 10:28

I respect your views,but the phil.populations overrides the economic realities that the government is no longer capable to address the needs of the people.I am a catholic by birth i came from a big family and I did not follow my parents on how many childs we have,We based on how we financially capable to have a number of child.Sorry Father ( if you are priest)But the population must be control in a moral and a legal way.

Anonymous said...


I would love to read your articles or your piece about any other countries except Saipan & the Phillipines.


You should read the previous writings, articles, comments of the Teacher, so you can understand, not only to read between the lines. Understanding is different from reading between the lines. You might not understand me because you might not know what I'm coming from, but there's more to it. Try to research.

Red October,

Prove me wrong, Filipinos would like to follow, I would love to be wrong at this. I will take whatever is written here with a grain of salt. We are just exchanging & expressing different ideas and not fighting. If there is somebody we need to consider a foe, it is the "SCHEMER or SieCAMer".

I think first before I write, contemplated if I will or I will not do it. I know this is coming but try to read the Teacher's other posting please, then tell me later if I'm wrong.

Same as your belief, I believe in population control, I only have two kids because of my financial means. It is my decision not the Phil Govt, not anybody else's. That is why I said what I said about the teachers theory about government's role on the population. I am nationalistic. I can't just take everything in sitting when my beloved country is so unfairly attacked. If we will not love our own country, who will?

If you said sorry "Father", I'm also sorry to my husband because I promised not to put my fingers in the cookie jar but I could not control it any longer. On the other hand, I am happy that my kababayan like you is aware of what's happening and taking part in the interaction, unlike those dormants who seemed not to care at all. We are just on the other side.

If I can't write anymore it is not because I not have nothing to say, it is because my hands will be tied. How I love the freedom of SPEECH!

Have a nice day and peace be with you too!

Anonymous said...

I am not a priest, but my faith is important to me and I try to live it as best I can.

We are called to be co-creators of life that will live forever, a gift not granted even to the angels. But like all blessings, the joy of marital unity must be exercised responsibly with due regard for the unitive and procreative funtions of matrimony and not overemphasizing either component.

If there are "grave" reasons why one cannot accept the blessing of another child, such as extreme poverty or health issues, it is certainly permissible to abstain from relations during the fertile period. It is just artificial contraception (condoms, pills, sterilization) that is contrary to God's will, because it separates the unitive and procreative natures of the marital act -- thus using one's beloved solely as a vehicle for hedonistic pleasure and removing the completeness of what is supposed to be a total self-giving of oneself to another, the two becoming one for as long as they live. Selfishness has no place in a sacrament lived daily.

Of course, many Protestants don't believe marriage is a sacrament and don't think there is anything wrong with artificial birth control. And we all know the U.S. is a Protestant country, which is why it continuously pressures the Philippines and other poor nations to adopt repressive "PopCon" policies. Even many Catholics have not fully educated themselves on this issue or formed their consciences in light of the heart and mind of the Church.


But any fair reading of Phillipine history and current events will show that the RP government is not trying to "breed humans for export." If anything, it is pressuring the people to violate their consciences so as to qualify for U.S. foreign aid.

Fortunately, many Pinoys trust God far more than government bureaucrats and do-good Canoys who want to "save" them either religiously or through secular humanist PopCon policies.

the teacher said...

Nationalism is similar to religious fanaticism as it teaches and breeds extreme love for your country and/or religious faith. These qualities instill competitiveness, animosity, and even hatred toward other nations or religions. Nationalism was a major factor in both world wars and will be a factor in future wars.

A large group of former Nobel Prize winners met several years ago to discuss major concerns and possible strategies for improvement. This group included some of the brightest humans in history in math, science, human rights, economics, and other areas. Two of the main four problems they identified were nationalism and religious fanaticism, citing both as a historical cause of conflicts and a source of future conflicts leading to war (environmental concerns and a better way to distribute the worlds dwindling resources in an increasing population were the other two).

Leaders and governments have historically taught nationalism to strengthen their own power base by fostering an "us vs them" mentality (the US civil war was an example of this mindset or sectionalism).

I have no nationalism toward any country because names for regions are inanimate objects on a map or globe, not something to love. The world will be better when tolerance for others is held in high esteem and nationalism is wiped from the face of the earth.

Nationalism is used by governments to coerce behaviors and control moderately educated populations. Historically, the US has been as guilty of promoting nationalism as any other.

A more tolerant world, not a nationalistic view, will be a better one for our children.

the teacher said...

Actually my dear, I have written much worse criticizing Indo., China, Burma, and the US “War on Terror” than I have ever written about PI.

But Indo has had many democratic reforms since the Megawatti movement and has adopted a no nonsense policy toward corruption along with educational programs on tolerance that are proving successful. China has opened their doors to free enterprise and a floor factory supervisor in S. China that made 5k a year in 2000 made 35k in 2007 and can expect 50k in 2010. They have also stopped their runaway population with stringent regulations that I admit seem brutal. The war is hopeless and I don’t think PI is the worst nation on earth or in Asia, as Burma has them beat in human rights areas.

I still can’t imagine being pumped with so much nationalism that I would ever think sending my daughter away into servitude or the sex trade industry so I can sit around on my arise waiting for my little girl to send me her hard earned paycheck for remittance home is a good plan. PI doesn't have the market cornered on beggars though, as other nations have concerns as well.

For me, I would rather be rolled off Bonzai with some honor and dignity than to accept money from my child.