A Tale of Three Markets: How Government Policy Creates Winners and Losers in the Philippine Health Sector

For more than half a century the Philippines has been a leading exporter of human capital in the healthcare sector. This paper estimates that remittances from Philippine nurses who worked abroad on a temporary basis netted the country some $0.5-$0.6 billion in 2008 while total remittances from all Philippine nurses working abroad—whether on a temporary or permanent basis—are likely to exceed $1 billion. In the last decade the country’s supply of nursing colleges has more than doubled and its annual output of registered nurses has increased fourteen fold. The education, licensing and international recruitment of nurses have become highly lucrative markets. These developments are due to the unintended consequences of shifts in immigration policies, particularly of the United States, as well as negligent education and healthcare policies in the Philippines. The nurses who seek work abroad face stringent re-licensing requirements and a plethora of restrictions, including quantitative limitations, on work permits in rich countries. A detailed analysis of the regulatory requirements in Saudi Arabia, the United Kingdom and the United States reveals that local nurse associations often have a strong influence and effectively can regulate the inflow of foreign nurses.