The Philippines may forego $1.5 billion remittances

As lower oil prices, ‘Saudization’ policy take toll on deployment

MANILA, Philippines — The Philippines stands to lose as much as $1.5 billion worth of remittances due to the projected 10 to 15 percent decrease in the deployment of overseas Filipino workers particularly to the Middle East due to declining global oil prices.

Emmanuel Geslani, a labor and migration expert, said the administrative order issued by the Department of Labor and Employment to the Philippine Overseas Employment Administration (POEA) would reduce the number of job orders for household service workers for the Middle East starting this quarter.

Labor Secretary Silvestre Bello early this year directed the POEA to reduce by 10 percent the accreditation of foreign recruitment agencies as well as the number of employment contracts especially in Saudi Arabia and Middle East countries.

Geslani said the directive would have a severe impact on the deployment of household service workers to the Middle East by 30,000 workers as recruitment agencies deploy around 300,000 workers annually.

 “Around 80,000 to 100,000 jobs for OFWs will be lost due to the precarious financial situation of Saudi Arabia and other Middle East countries due to lower crude oil prices that includes the reduction of household service workers to that country,” he said.

Saudi Arabia is progressing in the implementation of “Saudization” and more companies are folding up due to the alleged failure of the Saudi government to pay their contracts.

Last year, around 3,000 workers were repatriated through the Overseas Workers Welfare Administration (OWWA) by local recruitment agencies. Deployment likewise declined by 10 percent due to the instability of crude oil prices.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed personal remittances consisting of cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders rose 2.9 percent to $29.06 billion from January to November last year.

Cash remittances coursed through banks likewise went up 3.1 percent to $26.09 billion as inflows from land-based Filipino workers inched up 2.8 percent to $20.5 billion while that of sea-based workers grew 4.1 percent to $5.5 billion.

The BSP has lowered the growth targets for both personal and cash remittances to three percent instead of four percent for 2018 and 2019.

Geslani said the one-year ban imposed by the US on the grant of two types of work visas, H2A and H2B, to Filipinos starting last month would have minimal effect on remittances.