Overseas Filipino workers bear debts as crisis hits labor-importing economies
MAKATI CITY, Philippines — Ramones Caytiles’s stint in Taiwan is as short as the song-length of his namesake American punk rock band: two weeks.
But nearly six months now since he and 171 fellow workers got pink slips last year from their employer Hanston Display Corp., Caytiles feels life is as long as Don Maclean’s American Pie song.
It was the nineteenth of November, Caytiles recalls, when their music –the crinkle of New Taiwan dollar– died.
When we arrived in Taiwan, we borrowed money to pay fees to a broker who paid for our travel, Caytiles said adding such was the standard process for workers trying their luck outside the Philippines.
He and five other OFWs sent back after LCD manufacturer Hanston downsized are now saddled with that debt from Taiwan-based lending agencies eCash and Paylite Financing.
Caytiles said they were focused on working and earning they didn’t think the Kaohhiung, Taiwan LCD manufacturer would get hit by the economic catatonia seeping from the United States.
And if it did, he said they didn’t expect the time between working in Taiwan and getting laid-off would be that fast.
“You left the country riddled with debt, and then you came back home still saddled with debt—causing an even bigger problem,” said Caytiles, a single parent (his wife left him and his daughter some years ago).
Caytiles’s fate marks the lives of millions of OFWs in labor-importing countries whose real sectors are getting hit by the collapse of the global financial system that began in the US housing sector.
So says economists like former budget secretary Benjamin Diokno.
Diokno has become a prophet of doom since the start of the year, noting that May would be the month countries in Asia like the Philippines would feel the impact of the financial crisis that has coursed through the so-called “transmission channels.”
One of these channels, credit lines, has plugged lending to the electronics export industry, a flagship for most Asian economies like the Philippines.
In his presentation to journalists last March, Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) president Ernesto B. Santiago presented a grim outlook on worldwide industrial production as traditional lending windows shutter.
Santiago ticked off global companies announcing they were affected by the downturn in consumer electronics downturn: Sony (to shed 8,000 jobs); Philips (6,000); NEC (20,000); Panasonic (15,000); Pioneer (10,000); IBM (2,800); TDK (8,000); Nokia (2,500); Motorola (13,000); Sprint Nextel (8,000); and AT&T (12,000).
Closer to home, the closure of Intel Corp.’s Cavite manufacturing by May would see thousands of Filipinos losing a steady source of income.
“Countries that are heavily dependent on electronics have been the worst affected (notably the NIEs, Philippines, and Malaysia, but also China), followed by commodity exporters (notably Indonesia, Lao, Malaysia, Mongolia, PNG and Vietnam), exporters of capital equipment (all NIEs) and the garment manufacturers,” a recent World Bank report said.
“There will be higher unemployment abroad and here at home,” Diokno said, “and this means less jobs, less jobs, and less jobs.”
Caytiles said he was imagining kicking himself in the back while listening to Diokno.
“I think before workers should go overseas, they should know the situation that is happening –or if their employer is still steady,” Caytiles’s colleague Elwood Yambao said.
The father of two based in Olongapo City, which hosted an American air base a century ago, said that knowledge he could’ve gotten by reading newspapers.
But the overseas labor market is tough enough, and when potential OFWs like Yambao do access news sources, it’s for securing work.
That is still in their minds right now, according to Yambao, because they are hounded by their lenders of their debts amounting to between P60,000 (US$1,250) and P80,000 ($1,667) each.
He said they filed a case against their agency to at least get back the placement fees they paid for work contracts in Taiwan.
Under Philippine Overseas Employment Administration (POEA) regulations, OFWs who did not finish their contracts can file for some claims to their recruitment agencies. Manila-based recruitment agency Grand Placement and General Services Corp. brokered Yambao and his five co-workers for the Taiwan jobs.
We haven’t paid yet the Taiwanese lender since we’re still jobless, Yambao said in a short message via mobile phone.
In the meantime, Yambao said they feel immobile.
We went to Manila to check out that recruiter claiming he’s not requiring payment of placement fees, he added.
Other than that, he said they’re staying put in their respective homes in the provinces.
Caytiles, for one, has gone back to his farm in Sibalom, Antique, southern Philippines.
If The Ramones band was known for its blitzkrieg hit songs, Caytiles notes government support to displaced OFWs like him is like a slow-motion dance.
Deputy administrator Hans Leo Cacdac of the Philippine Overseas Employment Administration said Caytiles’s and Yambao’s cases require having these “heard through conciliation proceedings” so that some placement fees can be recovered.
Another government employee said displaced workers like Caytiles and Yambao can apply for public training grants on entrepreneurship and livelihood loans for small businesses.
It is a package totaling 60,000 pesos ($1,250 at US$1=P48), explains Teresita Manzala of the DOLE’s National Reintegration Center for OFWs.
“We need to repay our debt quickly,” Yambao said adding that meeting the documentary requirements of OWWA only “means additional expenses for us.”
The labor department’s Bureau of Local Employment said it is trying to find companies that may have vacancies in the domestic market.
Government’s Technical Education and Skills Development Authority, on the other hand, said it will train displaced local and overseas workers on identified lines of businesses, as well as retraining workers on certain skills.
The labor department’s online job search websites, meanwhile, reports 753,719 overseas job orders needing to be filled while local job openings run to 46,300 as of end-January this year.
Looking at the end-October 2008 data of the quarterly Labor Force Survey, the Philippines generated some 861,000 local jobs last year; the government deployed 1,376,823 newly-hired and re-hired overseas workers in 2008.
Amid the global economic crisis, the Philippines had a record-low 6.8 percent unemployment rate in 2008, as well as a record-high 34.533 million employed Filipino workers that same year
Since 2005, the government’s statisticians included overseas Filipino workers as among the “employed” in the Philippine labor force as mandated by the International Labor Organization. But since that time, the number of local jobs generated cannot outpace annually-rising overseas employment numbers (see Table 1).
In a presentation to business journalists last March, Labor Undersecretary Rosalinda D. Baldoz said of the total 6,406 displaced workers as of March 12, 2009, 4,197 reported Taiwan as host country while 1,357 came from the United Arab Emirates.
However, reports of local workers retrenched daily have gone down by 40 from 437 during the first week of March to only 397 as of March 16, 2009.
From October last year to March 16, 2009, Baldoz said a total of 109,529 workers were affected by the global economic crunch. Nearly 11 percent of this number or 11,574 workers were permanently displaced (10.6%) while 38,806 reported to be temporarily laid- off (35.4%). A greater number or 59,149 were reported to be in flexible work arrangements.
The World Bank paints grim pictures in its latest update on the effects of the global slowdown.
“As unemployment in the region and around the world begins to climb, migrant workers, wherever they are, are likely to be among the first to lose their jobs,” the report titled Battling the forces of global recession said.
“This will mean lower remittance flows to the poorest countries in the region and, if the migrants return home, a worsening unemployment in those countries as well as further downward pressure on real wages, especially in the informal sector that would directly affect the poor,” added the report, released early April.