Law of Diminishing Returns

I read somewhere that the IMF projects remittances from OFW's to hit more than US$14 billion for 2006.

This makes the Philippines a major exporter of labor force as has been widely noted. The contributions of OFWs to the over-all economy are well-known and has been discussed ad infinitum. What I want to point out is the obvious diminishing returns per capita it generates over the long-term.

You see, the longer the OFW stays abroad, the less frequent he/she is likely to remit back to the Philippines. Consider: most stay abroad after completing the necessary requirements to qualify for residency. For some, getting citizenship means petitioning their relatives back home to join them overseas. And as such, they send back money less often when their immediate family has joined them abroad.

Thus, the cycle never ends. So that the much-needed foreign currencies continue to flow in, new batches of workers that fly out of the country in search of better opportunities are actually needed to sustain the level of foreign reserves we have.