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Protecting Overseas Workers Will Gain More Attention As Temporary Migration Continues States Insight PROGRAM ON MIGRANTS, MIGRATION, AND DEVELOPMENT SEPTEMBER 2007 SUMMARY Countries of origin can play a major role in Protecting Overseas protecting their migrant workers abroad. A government-operated welfare fund that Workers: migrants and/or their employers finance offers a potentially efficient and feasible solution to sharing the cost of protection. An analysis of Lessons and Cautions the world’s largest migrant welfare fund, the Philippines’ Overseas Workers Welfare from the Philippines Administration (OWWA), shows that protec- tion of migrant workers can be institutional- ized through three elements: (1) a mechanism for repatriation, (2) provision of insurance Dovelyn Rannveig Agunias and loans, and (3) education and training. Migration Policy Institute However, countries of origin must overcome several limitations if they want to realize Neil G. Ruiz these benefits. The Philippine case highlights The Brookings Institution the importance of tailoring services to the immediate or core needs of overseas work- ers without overextending the government’s I. Introduction capacity, as well as of creating meaningful partnerships with members of the civil soci- International labor mobility is increasing, as a matter of ety and the private sector. Also critical to successful operation is a strong state capacity policy and a matter of fact. Yet, countries of origin and that allows for the representation and mean- destination have reached little consensus on how best to ingful participation of migrant workers; politi- mitigate the social costs of a more integrated global labor cal, administrative, and financial transparency and accountability; and the effective use of market. As proposals for temporary worker programs in government employees. Further, since pro- developed countries spark political debates on immigration tection of migrant workers is a transnational reform, national governments and international organiza- issue that requires transnational solutions, tions have been grappling with questions about the welfare partnerships across borders are also neces- sary. Destination countries should be active and protection of migrants. Reports of maltreatment and partners and should complement the offer- exploitation of foreign workers come from all migrant- ings of welfare funds. receiving countries, from the Middle East and Singapore to more traditional migrant-receiving countries like the United Protecting overseas workers will gain more attention as temporary migration continues States. How can governments ensure migrants are pro- to grow worldwide. A membership-driven tected while working abroad? welfare fund like OWWA can benefit migrants in a number of ways. Once its limi- tations are addressed, this Insight shows that This Insight examines one method of tackling this ever- OWWA can be a useful template for many increasing problem from the perspective of the Philippines, developing countries as they face the mount- a traditional migrant-sending country.1 It gives an overview ing challenges of protecting workers abroad. of the welfare services that the Philippine of labor export. High unemployment rates, government provides to its citizens who are especially among the highly educated, and temporary overseas workers rather than per- political instability are the main push fac- manent emigrants. It is based on interviews tors.2 With increasing pull factors from major with several high-level government officials industrial countries that are suffering from and migrants’ organizations, as well as on an labor shortages, the Philippine government’s analysis of several data sources on the wel- labor-export system allows and encourages fare and protection services available to Filipinos to benefit from these opportunities. overseas workers. Although not a detailed performance evaluation of Philippine pro- As of December 2006, Philippine government grams, the paper provides an understanding estimates placed the stock of all overseas of the policies, functions, and challenges Filipinos, including temporary workers, per- that the Philippine government addresses manent emigrants, and irregular migrants, at through a unique government institution, the 8.2 million, which amounts to almost 25 per- Overseas Workers Welfare Administration cent of the total labor force and 9 percent of (OWWA), to protect its overseas workers the country’s total population.3 Today, the abroad. Philippines is the largest organized labor- exporting country in the world. Although a Countries of origin can play a major role in substantial proportion of the Filipinos abroad protecting their migrant workers abroad are permanent emigrants (most of whom settle through an institutionalized welfare fund, in the Americas), the majority of overseas but policymakers need to Filipinos are contract or temporary workers, Countries of origin exercise caution given the officially called overseas Filipino workers or can play a major limitations governments in OFWs.4 Figure 1 provides an overview of the role in protecting origin countries face. The astonishing growth of land-based and sea- Philippine experience high- their migrant work- based OFWs from 1974, when the govern- lights the importance of ers abroad through ment initiated its labor-export policy, to 2006. developing state capacity to an institutionalized Almost two-thirds of these OFWs originated effectively deliver services, 5 welfare fund. from the countryside and almost half have ensuring accountability to college degrees.6 and representation of migrant workers, and creating meaningful The number of OFWs has increased almost partnerships within as well as beyond a 25-fold over the past 20 years, with nearly state’s borders. 1.2 million registered deployments to over 190 countries in 2006 alone.7 Most OFWs go II. Emigration from the Philippines to the Middle East and East Asia, as high- lighted in Figure 2, but the numbers have For more than three decades, the Philippine recently been increasing in Europe as well. government has adopted a deliberate policy Seafarers make up a significant proportion of 2 Insight Figure 1. Deployed Overseas Filipino Workers, 1975 to 2006 (in thousands) Source: Philippine Statistical Yearbooks, 1984 to 2006. OFWs with almost a quarter of a million projected to approach the US$15 billion deployed annually, and they compose 30 mark in 2007.9 percent of all seafarers in the world. Although government policy initially focused Celebrated nationally as “modern-day on exporting professionals, OFW occupa- heroes,” the remittances from this huge tions abroad have diversified over time to Diaspora have emerged as a major source of include factory workers, construction work- the country’s foreign exchange inflows, aver- ers, and service workers, such as care givers aging 8.9 percent of gross national product and domestic helpers (see Figure 3 and (GNP) over the last five years and over 23 Appendix 1). Professionals are still the percent of export earnings.8 According to the third-largest group of OFWs; that category Central Bank of the Philippines, remittances includes nurses and engineers. in 2006 reached US$12.8 billion and are 3 Figure 2. Deployed Overseas Filipino Workers by Destination, Annual Average, 2002 to 2006 Note: To see the Maps more clearly, please zoom in on the screen by clicking the Zoom In (+) button in the toolbar. See inset below. See inset below. Map by Chuncui Velma Fan of the Migration Policy Institute Source: Philippine Overseas Employment Administration (POEA), 2002 to 2006. 4 Insight Figure 3. Overseas Filipino Workers by Occupational Type Abroad Note: Type 1 includes professional, technical, and related workers (as well as entertainers). Type 2 includes managerial, executive, and administrative workers; sales workers; and agricul- tural, husbandry, and forestry workers, and fishermen. Type 3 includes clerical workers. Type 4 includes service workers. Type 5 includes production process workers, transport equipment operators, and laborers. Please see Appendix I for more detailed information. Source: Philippine Statistical Yearbooks, various years as cited in Neil G. Ruiz, "Made for Export: Labor Migration, State Power, and Higher Education in a Developing Society," Ph.D. dissertation, Massachusetts Institute of Technology, 2007. A shift in the international demand for in Hong Kong, Singapore, and the Middle Philippine labor took place in the 1980s, East, and as entertainers in Japan. indicated by a decline in the relative share of workers in production processes and related Studies from the early 1980s showed that occupations, and an increase in the interna- men originally composed an overwhelming tional demand for service workers. In the majority of OFWs. By 1987, 47 percent of all Philippines, this led to more women going deployed land-based workers were women. abroad, mainly to work as domestic helpers This proportion rose to almost 50 percent in 5 1994, a trend that continues well into the destination countries do not cheat potential current decade. As of 2006, 60 percent of and current overseas workers. new hires were women.10 The other reason for restructuring govern- The Institutionalization of Labor Export ment institutions in 1982 was to mitigate the In 1974, President Ferdinand Marcos issued risks involved in migration, such as a presidential decree creating three govern- exploitation and abuse. A 1977 White Paper ment institutions within the Ministry of Labor by the Ministry of Labor and Employment to facilitate the export of workers: the recommended
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