Philippines' new law may harm jobs for migrants

Officials fear legal protection for Filipinos abroad could lead employers to look elsewhere for workers.

Abu Dhabi, United Arab Emitrates --- October 17, 2010 --- Nasser Munder is the Labor Attache at the Philippines Embassy in Abu Dhabi.   ( DELORES JOHNSON / The National )
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ABU DHABI // A law updated last year to protect Filipino migrant workers by requiring recruitment agencies to pay for their insurance abroad may be driving employers to hire from other countries, officials fear.
Nasser Munder, the Filipino labour attache in Abu Dhabi, is among those concerned about the impact of the mandatory insurance coverage, which in the UAE translates to US$72 (Dh264) per worker, or $144 for a two-year contract.
Officials worry it could lead to a reduction in the deployment of overseas Filipino workers (OFWs), as employers choose to hire from other countries that have not imposed the same requirements.
"I have yet to see the overall deployment figures by the end of the first quarter to determine if there has indeed been a decline," Mr Munder said.
The insurance requirement, part of the Filipino Migrant Workers Act, was introduced by the Philippine government and took effect on November 8 last year. Weeks later, Jennifer Manalili, the-then administrator of the Philippine Overseas Employment Administration (POEA) in Manila, said she had seen a 52 per cent drop in the processing of OFW contracts.
Overall, the number of Filipinos hired abroad last year fell by three per cent, which the new POEA administrator attributed to changes in the new act, including the insurance coverage requirement.
Carlos Cao Jr told The Philippine Star in Manila on January 28 that his government foresaw up to a six per cent drop in overseas deployment this year with the strict implementation of the new law.
The act applies to all categories of OFWs who are hired by agencies and who are leaving the country for the first time. It also applies to workers hired with new contracts by agencies. The insurance policy covers natural and accidental death and permanent disability, repatriation costs, medical repatriation and three months' salary for every year of the migrant worker's contract for cash claims that arise from the employer's liability, among other benefits.
However, recruiters say employers in the GCC, including the UAE, already secure insurance coverage for their foreign workers, making the Philippine government's new policy redundant.
Victor Fernandez Jr, the president of the Philippine Association of Service Exporters, which represents 700 licensed recruitment agencies, said the group was not against insurance coverage for Filipinos they sent abroad.
However, the Philippine government should consider lowering the cost of the premium because the group considers it "a rip-off, outrageous, and exorbitant", he said.
In recent months, Mr Munder's office has been receiving enquiries from companies in the UAE wondering why they had to pay the insurance premium "when they already provide life insurance to their staff".
Mr Munder said he referred all the enquiries, including one from a large medical group, to the POEA in Manila.
"This is a relatively new law," he said. "We'll just have to comply with it unless the government decides to revoke or amend it."
Of particular interest will be the outcome of ongoing talks between Manila's labour department and the Philippine vice-president Jejomar Binay, who is also the presidential adviser for OFW concerns, Mr Munder said.
Walden Bello, the chairman of the Philippine Congress's Committee on Overseas Workers Affairs, said reactions of OFWs in Saudi Arabia suggested that the mandatory insurance provision of the new law "might bring more costs than benefits, making its possible amendment something to consider seriously".
In a report that was released in Manila last week after his recent fact-finding mission to Saudi Arabia, Mr Bello wrote: "One of the biggest worries was that the recruitment agencies and employers would find ways to impose the added costs of mandatory insurance on the worker."