By Ma. Alcestis A. Mangahas and Geoffrey M. Ducanes

THE COVID-19 pandemic is having a massive impact on economies and employment worldwide. Forecasts made by multilateral organizations as of June 2020 puts global economic output this year declining by about 5%. Meanwhile, the International Labor Organization (ILO) estimates that around 400 million full-time jobs were lost worldwide in the second quarter of 2020, and that while some recovery is expected, employment is still projected to be down the equivalent of 140 million full-time jobs in the fourth quarter.

Among the most heavily affected workers during this crisis are migrant workers, particularly those not classified as performing “essential work” in their country of employment.

The Philippines, as one of the top sources of migrant workers in the world, is already feeling the pinch in terms of the job displacement, repatriation, and stranding of scores of thousands of its workers, as well as the drop in remittance flows to the country. Remittances in April 2020 was already lower by 16% from last year and forecasts for the entire year see remittances declining by 10% to 30%.

Displacement. According to data published by the Philippine Overseas Employment Administration (POEA), drawing from regular reports of labor attaches from the Department of Labor and Employment (DoLE), the global displacement of OFWs rose rapidly from 5,849, first reported in April 1, to 182,401 in June. Middle East displacements dominated, representing 78% of all displaced OFWs (141,895), though there are also large displacements in Europe (20,348, 11.1%) and the United States (8,790, 4.8%). By the end of 2020, DoLE forecasts that the level of repatriation would rise to about 400,000 workers.

Repatriation. Displacement does not lead to immediate repatriation. In the Middle East, displacement could be limited to adjustment in working hours or reduction of benefits and conditions of work, whereas the rights to stay and residence could continue.

The DoLE data show that the number of overseas Filipino workers (OFWs) repatriated as of July 8 has reached 49,880, representing around 20% of overall displacements. In April, the repatriation of OFWs from Europe and the Americas were facilitated because cruise ships were allowed to dock in Manila Bay and the Filipino crew disembarked. Middle East repatriations were zero in April, started in May, and expanded in June and July, made urgent by both international pressure of destination governments and domestic dismay at internet videos of Filipinos in dire straits in the host countries.

Stranding. When residence and exit permits in the host country expire, provisions for housing and accommodation almost always end immediately. In this situation, prompt repatriation is needed. However, during the pandemic there are natural deterrents to quick repatriation. Airport closures, the absence of flights, and uncertainty about who shoulders the costs have impeded progress. The Philippines’ restrictions on flight entry, imposed early in the pandemic, have caused the numbers of stranded Filipinos to rise. From 225 in April, the number of stranded Filipinos as of end June was at 43,169, with over 58% of them in the Middle East.

In normal times, OFW households typically do very well, compared to most other households. Analysis of the Philippine Statistical Authority’s household survey data shows about two-thirds of OFWs belong to the richest 40% of households (top two income quintiles), while only 16% are in the poorest 40% of households (and only 5% are in the poorest 20% of households).

But OFW households are also highly dependent on remittances and the loss of remittances can easily tip some into poverty. On average, an OFW household relies on remittances for 43% of its total household income. The complete loss of remittances due to the job loss of its OFW member is sufficient to pull the incomes of OFW households in the second income quintile and even some of those in the third income quintile below the poverty line. Most of the OFWs in low income households are women in elementary occupations (including domestic workers) and services and sales workers. If these are the OFWs losing their jobs and they do not get it back or do not find new jobs, it will have a huge negative impact on the welfare of their households.

To address the humanitarian and socio-economic impacts of COVID-19 on our OFWs, the following four areas of concern should be considered:

• Organized Return. At destination, our OFWs require immediate humanitarian assistance to enable a safe and dignified return. Ensuring a safe return requires establishing identified protocols on health assurances, return travel arrangements. Coordination and communication is required at all levels, including diplomacy at the posts, to ensure documentation of workers’ accrued benefits and assurance for eventual claims.

What has been missing so far in the immediate response is establishing a database of OFW returnees, to obtain full data of their personal profiles and employment training and experience. There should be an effort as well to document the loss of incomes, benefits, and gratuities in the host country, to allow for future claims. Information on educational and occupational profiles will help prepare for employment assistance in the future.

Returned OFWs will need information on local employment opportunities whether these are: start/develop your own business type of training with credit lines of support; or where possible, wage employment through possible private sector partnerships. Training would be useful especially in skills upgrading around e-commerce, the digital economy and the health care sector.

On the policy level, social protection of displaced workers need to include the returned OFWs, especially those distressed. This is especially critical for those entirely or almost entirely dependent of foreign exchange remittances and having no alternative income sources.

Policy and program focus should shift to ensuring employment and social protection of our workers continuing to live and work abroad, especially in ensuring access to health care and services. Diplomatic representation is essential at the highest levels to safeguard visa rights and provide opportunities for additional and supplemental work.

• Rebooting foreign employment and providing safe channels for repeat work. International labor migration is not expected to completely stop, but it is likely to reduce in scale and pace, certainly within the next two years. There are expectations that the demand for additional labor will continue to increase, especially in aging societies. Requirements for health staff will continue to be stable and so with IT, operations and maintenance (engineering). International shipping will expand with the comeback of trade but manning for cruise ships is not expected to resume soon.

To restart foreign employment will require new safe channels for foreign employment supported by bilateral agreements and regional frameworks. It will require providing for safe-track, green channels for work that would include digital processing of documents, agreed protocols for health testing, pre-departure training and safe travel. It may require having personal, protective equipment and uniforms.

This commentary is an abridged version of Ateneo de Manila University Department of Economics Policy Brief No. 21.


Ma. Alcestis Mangahas is a Fellow of Social Weather Stations (SWS) while Geoffrey Ducanes is Associate Professor at the Ateneo de Manila University Department of Economics and also a Fellow of SWS.