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Gloria Macapagal-Arroyo is not the first president to declare the Philippines’ 3 million Overseas Filipino Workers (OFWs) as 'modern-day heroes'. Particularly since the 1995 execution of Filipina domestic helper Flor Contemplacion, resulting in a major diplomatic rift between the Singapore and Philippine governments, OFWs have been hailed as martyrs who endure estrangement, marginalisation and frequent instances of maltreatment for their families (and country). More recently, their personal safety has itself come under threat in light of the deadly bomb blasts in Saudi Arabia, traditionally the location of the largest proportion of overseas Filipino workers.
Arroyo’s particular contribution has been to point out that OFWs should also be considered 'Overseas Filipino Investors'. With their remittances amounting to at least 85 per cent of the country’s gross foreign exchange earnings, OFW contribution to the Filipino economy can hardly be underestimated. This has come in sharp focus with a recent ban on sending workers to Hong Kong, which hosts the second largest number of OFWs.
In early March this year, the President ordered an indefinite suspension in processing Hong Kong domestic worker contracts in which the salary is below HK$3,670. This 'selective ban' was instituted in response to the Hong Kong’s imposition of a HK$400 levy on householders who employ foreign domestic helpers. Correspondingly, the monthly minimum wage for foreign help has been reduced by HK$400 per month from 1 April. The wage cut effectively offsets the new levy, which employers will have to pay from 1 October this year. In addition, Hong Kong also plans to remove the medical benefits given to foreign domestic workers.
In February, HK Chief Secretary Donald Tsang defended the measures insisting that the cuts were to be made 'in accordance with existing policy' and that the anticipated HK$1.4 billion revenues raised would pay for job-training programmes for locals. Foreign domestic helpers make a substantial contribution to the HK economy, enabling mothers and fathers to hold down high-paying jobs. Yet despite this, a Chinese University of Hong Kong poll showed close to 60 per cent of respondents agreed with the government's tax proposal, while only 31.5 percent opposed it.
It is a difficult predicament for Arroyo, who has come under fire for the ban. Asia remains the most popular destination of OFWs in 2002, hosting 76.5 per cent of the total workforce. Cash remittances sent by OFWs in Asia reached PHP31.7 billion last year, or 68.4 per cent of the total cash remittance. There are nearly 240,000 foreign domestic workers in Hong Kong, of whom almost 64 per cent are Filipinos (most of the others are from Indonesia, Nepal, Sri Lanka and Thailand). In Hong Kong in March, a series of noisy protests were staged by a group of domestic helpers, most prominently represented by the Asian Migrants Coordinating Body (AMCB), who complained that foreign domestic workers are being made the 'scapegoat for the territory’s economic woes'. The Philippine government has lent its voice to such protests in the hope that Hong Kong would relent
The irony of the Philippine government’s ban is that it seems to be cutting its own nose to spite the Hong Kong people. The measures taken to retaliate against Hong Kong may very well accomplish what the wage cut would achieve: denying prospective OFWs of a decent livelihood. Many applicants for foreign contracts have incurred debts for the application fees at the Philippine Overseas Employment Agency (POEA), only to have their applications suspended. There is also speculation that the ban would force unscrupulous ‘underground’ recruitment agencies to reappear, potentially resulting in more ill-treatment of domestic workers.
On the other hand, as the Contemplacion issue demonstrated, the Philippines can do very little by itself. The fear is that jobs for foreign workers can easily be taken up by Chinese amahs waiting in Guangdong province (if not by other nationals), unless a unified protest is put in place. Indonesia, for its part, is already enforcing an unrelated temporary ban on sending workers to a number of markets including Hong Kong. The Philippines however, has the most to lose and what is vital for Arroyo is that she successfully lobby for the full support of other labour-exporting Asian countries to help put pressure on Hong Kong.
WATCHPOINT: Will OFWs in Hong Kong make their grievances heard at the 2004 polls, in light of the recently passed Absentee Voting legislation?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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