Philippine Labor Migration Policy

Gender

Among the Filipino migrants, there is a significant amount of migrants that are Overseas Filipino Workers (OFW). One of the recent trends in Filipino contractual workers is that as years pass by, more and more women have traveled out of the country, outnumbering the men. This can be attributed to the fact that domestic helpers and entertainers are in-demand globally. In fact entertainers destined for Japan and other countries have increased from 3.3% to 18.9% in a span of a decade from 1983-1984. As of 2009, the most Filipinos work as household service workers. Out of the total of 71, 557 household workers, 69,669 are women.

According to the Philippine Statistics Authority (PSA), many of the OFWs are Overseas Contract Workers (OCW).

Age

OFWs are distributed among different age groups. The 25-29 age bracket comprises more OFWs than the other age groups.

Origin

OFWs come from all parts of the country, and many of them come from provinces of the Philippines.

Filipino Migrants Destination

According to the World Bank, 4,275,200 Filipinos have emigrated out of the country as of 2010. Among those who travel abroad are Overseas Contractual Workers (41%), immigrants (29%) and those who are undocumented (30%). As of 2009, 1,422,586 Filipino workers have contributed to remittances from abroad. According to the book Philippine Labour Migration, these workers can be categorized into eight criteria, by type, countries of deployment, gender, rural or urban origin, civil status, age, education and skills, and occupation.

OFW Destinations

Although many permanent migrants are residing in the Americas, most OFWs are working in Asian countries. As of 2013, the top destinations for OFWs are Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Hong Kong, and Singapore.

Usual Occupations

Number of Deployed Landbased Overseas Filipino Workers by Major Occupational Category, New Hires

Remittances from overseas Filipino workers (OFWs)

A chart on the cash and personal remittances of OFWs in millions of US Dollars

* Remittances coursed through bank

**Partial data only until April 2015

A chart on remittances of OFWs according to regions in millions of US Dollars

*Partial data only until April 2015

History of Migration Policies

The history of Philippine Labor Migration policies can be traced as far back as 1521, when the Filipino natives started to man ships in the Manila – Acapulco Galleon trade. Filipinos started working in the dockyards and aboard ships traveling as far as Mexico, under the mandate of Spanish colonizers. In order to escape maltreatment by the Spaniards, many of those Filipino workers resorted to "jumping ship", settling in state ports like Acapulco, Mexico and Louisiana, USA. They were the first generation of Filipino labor migrants. Since then, three "waves" of labor migration occurred (in the 1900-1940’s, the 1940s-1970’s, and the 1970s-1990’s), each wave taking the Philippines closer to becoming one of the world’s largest labor exporting countries, as it is today.

The majority or the bulk of the temporary migration/ contractual/ labor migration started in the mid-1970s with the triggering of the formal adoption of the Overseas Employment Program with the Philippine Labor Code in 1974. It was also in the mid-1970s that the government started to mobilize and promote labor migration in the middle east as it has opened an opportunity for the Ferdinand Marcos, the then President of the Philippines, to export young unemployed men from the stagnating economy and be able to regulate and encourage labor outflows. The third wave of migration that took place in the 1970s was due to the economic downturn caused by an increase in crude oil prices. At this time, job loss in the country was tremendous. On the other side of the globe, however, oil-exporting countries were making large profits and this created a demand for more laborers to support their new projects. Marcos saw this as a chance to utilize the Philippines’ surplus labor and he created a foreign policy called "Development Diplomacy," which focused on exporting such surplus labor. In 1980, the number of overseas workers set for deployment by the Department of Labor and Employment (DOLE) had increased by 75% from that of the previous year.

Factors affecting the Labor Flow in the Philippines

Labor Flows in the Philippines has been determined mainly by three factors: Rapid Population Growth, Uneven Development and Labor Oversupply and Unemployment.

Current Government Policies

Around four centuries after the first Filipino laborers migrated, a law on Philippine labor migration was finally enacted in 1995. The creation of the Migrant Workers and Overseas Filipinos Act of 1995 (RA 8042) was triggered by the growing pressures on the Philippines imposed by the murder case of Flor Contemplacion. This case almost severed bilateral ties between the Philippines and Singapore (Contemplacion’s host country), negatively affecting the former’s economy with a $61.3B decrease in investments by the latter. Graver than the economic distress caused by the Contemplacion case, was the reality it symbolized for the Filipinos. It was the final blow in a long struggle against the abuse suffered by Filipino migrant workers in their host countries. Besides that, other problems also existed, such as the abundance of so-called "tourist workers"—workers who migrated without going through the due process of labor migration and the proper briefing provided by regulatory government agencies. Faced with such problems, RA 8042 was created with its goal: "to institute the policies of overseas employment and establish a higher standard of protection and promotion of the welfare of migrant workers and their families and overseas Filipinos in distress."

RA 8042 or the Migrant Workers and Overseas Filipinos act of 1995 seeks to deliver and provide full protection and promote full and equal employment opportunities for migrant workers. According to the Philippine Overseas Employment Administration, the act is intended for the assurance of the dignity and fundamental human rights and freedom of the Filipino citizens with an imperative to have an access to court and quasi-judicial bodies for the distressed overseas Filipinos. RA 8042 provided mechanisms to protect Filipino labor migrants from issues such as illegal recruitment and abuse by their employers. Some of the services that the government was to provide as stipulated in the law (Articles II-V) were the following:

In 2001, the Arroyo administration took a new stand regarding migrant workers. While RA 8042 stipulates that "the State does not promote overseas employment as a means to sustain economic growth and achieve national development… [rather], the existence of the overseas employment program rests solely on the assurance that the dignity and fundamental rights and freedoms of the Filipino citizen shall not, at any time be compromised or violated," President Arroyo declared overseas employment as a "legitimate option for the country’s work force. As such, government shall fully respect labor mobility, including the preference for overseas employment." Such statement signaled the shift of the government’s role from merely managing migrant workers in their ventures abroad to actively promoting "international labor migration as a growth strategy, especially of the higher skilled, knowledge-based workers."

In 2001–04, the following employment-promoting strategies were put action: enhancing the skills and competencies of the Philippine labor market by giving them easier access to training programs, facilitating employment by providing updated information on job opportunities to ensure the matching of workers’ skills and jobs, etc.

In 2010, RA 10022 or an Act Amending RA 8042 was enacted. The amendments to the law sought to further improve the protection mechanisms provided for Filipino migrant workers. RA 10022 is an act that amends RA 8024 that further improves the standard of protection and promotion of the welfare of migrant workers, their families and the overseas Filipinos in distress. This amendment establishes a continuous monitoring of international conventions, ratify those that guarantee protection of the migrant workers and enter bilateral agreement with the countries hosting overseas Filipino workers, free and accessible skills development and enhancement program for the unskilled workers. The state will also recognize non-government organizations, trade union, workers association, stakeholders and their similar entities duly recognized as legitimate in the protection of the Filipino overseas workers.

From 1565 to 2010, the face of Philippine Labor Migration had continued to evolve. Today, this stronger, systematized policy that the country adopts is one that neighboring countries like for example Indonesia try to emulate.

Regulatory Impact Analysis on the Philippine Labor Migration Policies

According to Aniceto C. Orbeta Jr. and Michael R.M. Abrigo, on their research Managing International Labor Migration: The Philippine Experience, however the Philippines is seen as the global model in managing international labor migration, the Philippine Migration Management Infrastructure has inefficiencies that needed to be restructured or highlighted. This includes the inefficiency of the migration policies to resolve illegal recruitment cases, professionalization of the Household Service Worker Sector or the HSW has been unknown to migrant workers, minimum wage provision has been violated by the stipulation of a lower minimum wage, and issues regarding the no-placement fee provision. Cost of deployment for workers has been greatly affected by the inclusion of Language and Culture and Stress Management trainings.

Labor Export Policy as Part of the Philippine Development Plan 2011-2016

The Labor Export Policy (LEP) of the Philippines aims to protect and support its migrant workers. For a country who chooses to solve its unemployment by making work abroad more convenient for Filipinos, the Philippines has made several processes in order to protect and support its citizens.

To be able to work abroad, Filipinos must go through a licensed recruiter or a government agency or have their contracts approved by the Philippine Overseas Employment Administration (POEA).

In order to protect its migrants, the Philippines has made private recruiters pass through certain government standards. In order to be a licensed recruitment agency, it must be Filiipino-owned, meet capitalization and bonding requirement as well as not charging the worker more than one month’s salary as a placement fee.

To be able to provide quality labor to other countries and support to Filipinos, the Philippine government provides a number of subsidized benefits such as pre-migration training on social and work conditions abroad, life insurance and pension plans, medical insurance and tuition assistance for the migrant and his or her family, and eligibility for pre-departure and emergency loans. Registration for these benefits, which are administered by the Overseas Workers Welfare Administration (OWWA) is compulsory. This is paid for by the agency from the direct wages of the migrant or directly from the migrant himself/herself.

In the case of the Philippine Development Plan (PDP) 2011-2016, Overseas Filipino Workers (OFWs) are to be required to apply for all social security schemes of the government Asset Reform. e.g. SSS, Philhealth.

Procedures and Qualifications in Becoming an OFW

For those who are going through certain agencies for employment abroad, the following are the documents for submission to the Philippine Overseas Employment Administration (POEA).

Land-based

1. Duly accomplished OFW Information Sheet
2. Your Verified Employment Contract
3. PDOS Certificate, National Certificate (NC) II, Comprehensive Pre-Departure Education Program (CPDEP) Certificate from OWWA (For HSWs)
4. Verified Insurance Policy

Sea-based

1. Seafarer's Information Sheet
2. Employment Contract (original and duplicate)
3. Seafarer's Registration Certificate (SRC) (original)
4. Seafarer's Identification and Record Book (SIRB) (original)

Fees

Recruitment agencies will charge service fees from the employer as payment for services rendered in recruiting the worker. The employer also pays the cost of:

The agency is allowed to collect from the worker a placement fee equivalent to one month salary, except in countries prohibiting collection of fees from workers. However, there are agencies that collect even more than this, without receipts.

Salary, Taxes and Benefits

According to Hans Cacdac, POEA Head, OFWs are required to be given salary of a minimum of $400 a month. OFWs are also exempted from having their income taxed by the Philippines.

In agreement with the rules of POEA, OFWs are entitled to the following benefits:

Health

With OFWs travelling back and forth between countries, it cannot be avoided that disease will be spread from one nation to another. The risk involved here is that communities and people who have never been exposed to a certain disease will not have the necessary antibodies to fight the sickness.

Human Immunodeficiency Virus

One of the common health hazards with working abroad is HIV. The spread of the disease was due to the limited condom use, multiple partnering, clients of sex workers, low HIV knowledge, and low perceived HIV risk. It was expected by the Trade Union Congress of the Philippines (TUCP) on June 22, 2015 that the number of OFWs testing positive to HIV could breach 4,000 if the government fails to take action. As of April 2015, the number of OFWs infected already reached 3,509 with the 221 new cases from January to April 2015. The median age of infected OFWs is 33 and mostly male. They comprise 14 percent of the aggregate 24,936 cases in the Philippine HIV and AIDS Registry as of April 2015.

Ebola and Middle East Respiratory Syndrome Coronavirus (MERS-COV)

During the Ebola outbreak, nations were devastatingly affected with the highly contagious virus. President Benigno Aquino III held off from announcing whether or not the country will send a team of health workers to West Africa. As the disease is spread via direct contact with an infected person, even after a short period after death, the risk of infection is very high and direct contact to any individual should be avoided to prevent the further spread of the virus. During this time, the MERS-COV, another highly contagious virus, has already been put on the watch-list. Precautions were made to prevent the spread of the virus through education, close monitoring, and working with global authorities to deal with the diseases.

Abuse

The issue commonly seen in social networks is that of physical abuse under foreign employment. These abuse cases can be caused by their own employers or by their co-workers. The intensity of each case can range from physical abuse to rape or even murder.

Cases

Jasmin Vergara suffered from sexual and physical abuse from her employers in Saudi in September 2012. She was asked to do sexual favors and was beaten upon refusal. When she received gifts or owned something that was not allowed by the employers, she was beaten. The sons of her employers would molest and sexually harass her. She was only kept silent by her responsibility to her family.

Another OFW, who remains anonymous, was abused by a female employer in Kuwait before she escaped. She suffered being poured hot water on her back so that she would wake up and also suffered having her head hit the wall several times. Kuwait court ordered her employer to pay P2 million in damages to the OFW.

Movements

Senate President Pro Tempore Ralph Recto suggested to increase the number of trained government personnel who can give comfort and aid to OFWs. This can be done, according to Recto "[By adding] a fourth leg to the traditional agencies assisting the OFWs and that would be the Department of Social Welfare and Development which can dispatch professional social workers to countries where there are Filipinos in distress who need to be aided." He also stated that there are budget limitation in and one possible funding source are "reasonable adjustments" in operating cost and overhead costs of DSWD’s Conditional Cash Transfer program in 2014.

Illegal Recruitment

The POEA apprehends numerous illegal recruiters regularly. Some of these recruiters submitted fake documents, which can be defined as the presenting false information. The cancellation of their license is then imposed with a corresponding penalty.

There are certain penalties associated with illegal recruitment:

1. Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine not less than two hundred thousand pesos (P200,000.00) nor more than five hundred thousand pesos (P500,000.00).
2. The penalty of life imprisonment and a fine of not less than five hundred thousand pesos (P500,000.00) nor more than one million pesos (P1,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein.

Provided, however, that the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.

Many illegal recruitment agencies form for the sake of profit and some examples of how they earn money is by stealing the applicant’s money or by using the applicant in human trafficking or as drug mules for drug trafficking.

POEA has partnered with an online recruitment company, Jobstreet.com, to fight illegal recruitment. In 2012, 152 cases of illegal recruitment with 312 victims were filed.

Overseas Filipino Workers incarcerated or executed abroad

The current administration led by Pres. Benigno Aquino III has been the subject of scrutiny for international labor issues. According to Migrante International, a militant group supporting overseas workers, the current administration holds the record of having the most number of OFW executions since the implementation of the Philippine labor export policy in 1974.

Latest cases

In April 2015, the nation witnessed Mary Jane Veloso’s clamor for clemency from the government of Indonesia, in order to reverse her death sentence due to her drug trafficking case. Inasmuch as President Aquino appealed to Joko Widodo, president of Indonesia, the administration was bashed by a considerable majority especially on social media arguing that its efforts are always "last minute." Not to be ignored is Veloso’s mother’s statement, "taumbayan ang tumulong."

In December 2014, Carlito Lana, an OFW in Saudi Arabia, was sentenced to death due to his murder case. Being forced to pray during Muslim prayer time, Lana killed his employer in 2010 and was convicted in the same year. In 2014, his death was ordered by the Saudi Arabian government. Lana was the sixth OFW executed under the present administration.

As of April 2015, there is a total of 88 Filipinos in the death row in various countries according to the Department of Foreign Affairs.

Regarding the Legal Assistance Fund for OFWs, Budget Secretary Florencio Abad stated that the DFA has an allocation of Php100 million in the 2015 national budget in response to militant groups’ accusations of insufficient funding for the sector supposed to extend support to overseas workers facing criminal charges in other countries.

These two cases are just a microcosm of the difficulties that Overseas Filipino Workers encounter in the event that they get caught in the intricacies of foreign law and regulations. Not to be forgotten is the case of Flor Contemplacion, sentenced to death in 1995 in Singapore, which paved the way to the review of the international labor laws of the Philippines.

The Aquino and Arroyo administrations each have six OFW executions in the tally of Migrante International. The high number of those remaining in the death row under the present administration poses an alarming state for the OFW community in various parts of the world.

Employment

The volume of OFWs working abroad as a proportion of the labor force of the country has increased dramatically. In 2014, the number of Filipinos working abroad grew by 137 percent from its number in the year 2000.

According to the results of the 2014 Survey on Overseas Filipinos, the total number of OFWs currently stands at 2.3 million, based on the total number of OFWs working abroad anytime from April to September 2014.

During the 1990s the National Economic Development Authority (NEDA) calculated that the country needed to create at least one million jobs annually in order to reach full employment by the year 2000. However, in 1994 only 415,000 jobs became available while the country's labor force increased by around 700,000.

It was observed by the International Labour Organization (ILO) that the country’s full employment goal couldn’t be met with the domestic labor conditions and only through sending contract workers overseas could the country provide jobs for its people. Therefore, unemployment alleviation is one benefit from labor migration.

Remittances

For countries like the Philippines, remittances are the main benefit of labor migration. With higher wages abroad, money can be sent back to the workers' families in the Philippines and this money is either consumed or saved. Therefore, remittances from abroad increase consumption in the source country and create more demand for goods. Either through formal banking channels (where the government is able to measure foreign exchange) or through informal channels, the money circulates within the source country and helps stimulate the economy.

Furthermore, families who receive remittances tend to have a higher financial status. A slight decrease in poverty levels has been observed as a result. On the other hand, there is no clear negative relationship between income inequality and remittances in the Philippines.

The following table shows the cash remittances of OFWs per year for the last five years.

Total OFW remittances have been increasing for the past years. In 1990, the yearly remittances reached the one billion US dollar mark and 24 years later, in 2014, had increased to 24 billion US dollars. Overseas workers' cash remittances in 2014 rose by 5.8 percent from its 2013 level. Cash and non-cash remittances combined, there has been a 6.2 percent increase in 2014 from its number in the preceding year.

Remittances have helped stabilize the government’s national accounts. From 1975 to 1994, these remittances accounted for 2.6% of the country’s gross national product (GNP). However, according to the 2011 figures, remittances rose to around 11.17% of the country’s GNP. NEDA economists believe that without these earnings from abroad, economic growth would be much lower. The country’s GNP grew because of high rates of OFW remittances and the government believed that the money remitted was used to help start-up small businesses, boost consumer spending and enable small-scale construction.

In 2014, remittances from OFWs constituted ten percent of the Philippines’ Gross Domestic Product (GDP).

Foreign Exchange Reserves and Debt Repayment

As of 2012 the country has huge debts, but the overseas Filipino workers (OFWs) foreign exchange remittances have kept the country's debts from increasing to critical levels. Not only is foreign debt being paid with these remittances but they are also used as collateral for new loans. Furthermore, they help to improve the balance of payments and reduce the trade gap. Foreign exchange reserves mainly come from labor migration and OFW remittances have surpassed the export sector in producing foreign exchange. For this reason the government is supporting overseas deployment of the labor force which has reached around one million Filipinos per year.

Decrease in Labor Force

Although the labor force of the country has been increasing, labor migration has caused a lack of skilled workers, especially specialist workers who choose to work abroad for higher wages. As well as the social issues caused by OFWs and those they leave behind, the decrease in specialists has forced companies and government agencies to hire less experienced workers for highly skilled jobs.

With what is colloquially called "brain drain," the Philippines loses its human capital with the continuously growing number of Filipinos who decide to work abroad mostly for better compensation. This "exodus" of workers, such as nurses and doctors, will eventually lead to the country having a shortage of skilled workers in various sectors.

Overseas Filipino Workers also decide to work abroad during their prime years, i.e. 25–34 years old. This age bracket constitutes 48.5 percent of the total OFW population in 2014. On the side of the Philippines, this diaspora of Filipinos is a loss to the country due to the productivity that they could have contributed had they been working in the domestic sectors rather than abroad.

Economic Dependence

With the growing number of OFWs sent abroad, the national economy, bolstered by remittances from other countries, becomes conditioned by the very fact that the growth exhibited by the economy is due mainly to monetary remittances by OFWs and not really contributed by national growth per se.

The economic consequences of being import-dependent and export-oriented redound to the disadvantage of the Philippines as it furthers mechanisms of dependence on other countries. In addition, the Labor Export Policy conceals the national economy’s innate weakness through the remittances of OFWs to their families, with the local manufacturing industry performing poorly but nonetheless compensated for by the said source of income.

Broken families

One of the consequences of working abroad is separation from one’s family. Reports from the POEA, Overseas Workers Welfare Administration (OWWA) and Non-Government Organizations, as presented by Senator Miriam Defensor-Santiago in 2007 for Senate Bill 1779, all point to the negative effects of separation due to labor migration in the OFWs’ families, most especially their children. Such effects include "broken marriages, drug addiction, sexual immorality, crimes, suicidal attempts and psychological breakdowns."