MANILA, Philippines - A recruitment consultant warns that falling oil prices may result in lower deployment of overseas Filipino workers (OFWs) and a consequent decrease in dollar remittances as Middle East economies contract.
Emmanuel Geslani, a recruitment and migration expert, said yesterday the government should be prepared in the coming years as he predicts current oil prices would result in fewer job orders from Middle East countries as they tighten their budgets and reduce private investments.
Plummeting oil prices, from as high as $114 per barrel in August 2014 to $38 per barrel on Dec. 29, 2015, have forced Middle East countries to reduce government and private investments for 2016 as an oil glut, the demise of the Organization of Petroleum Exporting Countries (OPEC) and weakening global demand combined to make 2015 a year of crashing oil prices. The cost of crude fell to levels not seen in 11 years – and the decline may have further to go.
This means OFWs will have fewer job opportunities in Saudi Arabia, OPEC’s top producer, as low oil prices are squeezing the kingdom’s domestic budget, imposing austerity with looming taxes in some areas.
Saudi Arabia this week announced budget cuts to address an alarming deficit of 15 percent of GDP this year. Subsidies for water, electricity and petroleum products are likely to be cut, and government projects reined in.
Even seafarers have felt the pinch as more offshore rigs and oil tankers are shutting down and reducing salaries of OFWs, according to Nelson Ramirez, president of the United Seafarers of the Philippines.
Saudi Arabia has announced plans to reduce its reliance on foreign workers by recruiting only highly technical workers and monitoring investments closely. The kingdom will now be more selective in hiring foreign workers, said Ibrahim Al-Assaf, finance minister.
King Salman Al-Assaf said the kingdom had made substantial progress in training and absorbing qualified Saudi professionals and workers in different sectors.
Saudi Arabia was the top destination of OFWs in 2014 with 402,837 deployed compared to 2013 with 382,553 OFWs, followed by UAE with 246,231 workers sent in 2014. Qatar was the fourth destination of OFWs with 114,511, with Kuwait as the sixth and Bahrain the ninth among the top 10 destinations.
Five Middle East countries have a total of 852,635 OFWs out of the 1,430,852 total deployment of POEA in 2014, with new and rehires accounting for 60 percent of the total.
A reduction by Saudi Arabia on new projects and a cut-back in infrastructure projects would mean a large reduction of job orders for OFWs. The same goes for the other Gulf countries. There are 800,000 to 1.5 million OFWs in Saudi Arabia alone.