PHILIPPINES: Contingency plan for army of migrants

Photo: Jason Gutierrez/IRIN

An unemployed man sleeps on a bench along Manila Bay. The Philippine economy is taking a hit from the global financial crisis as millions of Filipino workers based abroad stand to lose their jobs

MANILA, 22 October 2008 (IRIN) - The government is finalising a contingency plan to protect the millions of foreign Filipino workers amid a global financial meltdown that threatens escalating unemployment, said officials.

While the economy remains relatively stable and has limited exposure to fallen US and European financial institutions, the crisis could force many governments abroad to cut jobs in sectors where Filipinos are employed.

About 10 percent of the 90 million Filipinos are overseas, and their remittances have become the backbone of the economy - in 2007 they sent home US$14 billion, or about 10 percent of gross domestic product (GDP), according to official figures.

The overseas Filipino workers (OFWs) work as maids in countries from Hong Kong to Singapore, as nurses and health workers in the US and Europe, and as truck drivers in Iraq and Afghanistan. About a third of the world's seafarers are also Filipinos, with about 270,000 employed by foreign maritime agencies.

Their monthly pay ranges from $400-$600, and they spend up to 10 months of the year away from their families just so they can provide barely enough for five people, according to government data.

But as the global financial crisis has made them extremely vulnerable, and by the extension the Philippine economy, presidential spokesman Jesus Dureza said: "We should be prepared for a worst-case scenario, because our country is part of what we call a global village. If their stomach aches, we will also feel it.

Photo: Jason Gutierrez/IRIN

A Catholic priest gives holy communion to Filipino seafarers during a special mass at a street job fair in Manila in October. The Philippines is the world's fourth biggest source of migrant workers, with over eight million Filipinos employed abroad

"The president has ordered the labour and foreign affairs departments to prepare a contingency plan in case they lose their jobs."

He said a recession in the US, where about two million Filipinos work, could lead to mass lay-offs. To cushion the economic impact of the crisis, Dureza said President Gloria Arroyo was set to sign a law that would provide for the restructuring of housing loans to ensure easier terms. The president also extended the term of a special committee that seeks to protect the welfare of over one million OFWs in the Middle East.

Retraining programmes

The state-run Technical Education and Skills Development Authority was also asked to prepare practical and vocational courses for those who may be affected by the crisis.

Connie Bragas-Regalado of Migrante International, an NGO working for migrant rights, warned that many middle-income families in Hong Kong or Singapore, for instance, would look for ways to cut spending. "Of particular concern are the domestic helpers or maids and other contract workers. If their employers lose their jobs or their jobs are affected by the crisis, the maids could be sent home or they may be forced to take pay cuts," said Regalado, a former maid who worked for 13 years in Hong Kong.

"When the Asian financial crisis struck in 1997, I was in Hong Kong and there were massive job cuts. Many of the expat employers lost their jobs. Their first thought was cost-cutting measures and they had to terminate their maids," Regalado said. "We are likely to see the same trend now, since this fresh crisis is global.

"If the workers cannot send home money to their families, this would also lead to social problems," she said. "The government should put up safety nets for these workers who may be displaced."

Foreign Undersecretary Esteban Conejos, heading up the contingency plan, said low-skilled workers were "the most vulnerable".

The most vulnerable would be the low skilled workers, our domestic helpers. With a prolonged recession, households would not have the necessary income to support or maintain the services of our domestic workers.

"The most vulnerable would be the low skilled workers, our domestic helpers," Conejos told foreign correspondents on 15 October. "With a prolonged recession, households would not have the necessary income to support or maintain the services of our domestic workers.

"We still hope for the best, but are planning for the worst," Conejos said. "We have to be ready in case the recession is deep and prolonged."

He said the contingency plan would be completed this month, and could include livelihood training. Banks would be encouraged to provide micro-financing to enable the returning workers to start small businesses.

Economic growth meanwhile was expected to slow from 7 percent GDP growth last year to about 5 percent this year, according to economists.

Augusto Santos, deputy director-general of the economic planning agency, said the public should not panic, insisting that macro-economic fundamentals remained steady. He said the economy at worst would only contract and not crash.

But with local unemployment up to 8 percent in the first quarter of the year, Regalado said the public should be prepared to tighten their belts and ride out the financial storm. Already, the central bank has said dollar remittances could slow down amid the crisis.

"I expect the families of the migrants to suffer the most," she said.

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