After becoming one of the top source-countries of migrant workers for decades, the Philippines is now also emerging as a popular destination for foreign workers, according to the Department of Labor and Employment (DOLE).
Data obtained by the BusinessMirror from the DOLE’s Bureau of Local Employment (BLE) showed that the number of foreigners with alien employment permit (AEP) skyrocketed from 22,740 in 2013 to 50,234 in 2017.
An AEP is a mandatory documentary requirement from the DOLE for expatriates, who would like to work in the country for more than six months.
For those who would work locally for less than six months, they could get a special work permit (SWP) from the Bureau of Immigration.
The BLE recorded its biggest growth rate in 2016, when the government relaxed the requirements for AEP the previous year as part of its commitment under the World Trade Organization (WTO).
AEPs rose from 28,371 in 2015 to 41,993 in 2016, which is equivalent to a whopping 33.4-percent increase.
Chinese nationals consistently comprised most of the AEP holders from 2013 to 2016.
In 2013 Chinese nationals only comprised 23.7 percent (5,412) of AEP holders. This grew to 45 percent (18,920) in 2016.
Following the Chinese in the top 3 nationals with biggest number of AEPs are South Koreans and Japanese, respectively. Both usually register an average of 4,000 AEPs each year.
While the growth rate slowed down last year to 16 percent, BLE said this was still significantly higher compared to the years before 2015.
“There was significant increase in the issuance of AEP [in 2017], particularly in NCR (National Capital Region) and Region 2. This can be attributed to the prevalence of online gaming industry in the areas whose clients are mostly from China and other South East Asian countries,” the BLE said.
Temporary in nature
The Federation of Free Worker said it was surprised by the surge in the number of foreign workers in the country, while the Philippines continues to lose many of its professionals abroad.
“The government has always said that the comparative advantage of Filipino workers is that we are highly skilled. Thus, this news comes as a surprise. That’s more than 100-percent increase,” FFW Vice President Julius Cainglet said.
“It’s unacceptable. A lot of our professional and skilled workers are going abroad and yet, it appears that work is readily available,” he added.
BLE Director Dominique R. Tutay, however, noted that the country is still in need of more foreign workers to address the skills gaps of its professionals.
“While we have many professionals, they still lack the needed higher level of education, training and competency needed by the industry,” Tutay explained. “That is why foreigners are still hired here temporarily until we could get their expertise.”
She said the AEP holders are usually hired as technicians and associate professionals, or for administrative, executive or managerial positions.
By its very nature, AEPs, Tutay said, usually last for two years, although she added there are cases wherein it would last up to five years or sometimes just only a year.
As to concerns of the labor sector that the AEP holders will compete with Filipinos for local positions, Tutay said this is unlikely because of their labor-market test.
“The labor-market test ensures that no Filipino is available with that skill needed for a job, that is why it is given to a foreign national,” Tutay said.
The DOLE assures that only a small portion of the country’s 44 million work force are foreigners.
More to follow
Tutay expects the number of AEPs to continue increasing, as the government engages with more trade agreements with other countries.
“Once you open your market, many countries will come to your country to see if it will be viable for their business,” Tutay said. “We allow their people to come in and check which areas in the country they could invest in.”
She added many foreign companies have shown interest in doing business in the country after the government made its AEP more accessible for foreign workers.
“Trading partners usually look for favorable conditions for investments. If the law is too restrictive, they think it is not good to do business there,” Tutay said. She added this was apparent from the industries where most of the AEP recipients were based.
“Most of them are in the manufacturing, and information and technology sector. There are also those in the construction, accommodation and food and service. So these are investments-related,” Tutay said.
Other popular industries for foreigners are business-process outsourcing; arts and recreation, particularly online gaming; and wholesale and retail.
WTO review
No less than the WTO has recognized the country’s efforts to liberalize its work force in its fourth Trade Policy Review (TPR), particularly its participation in the Asean Mutual Recognition Agreement (MRA) for professionals.
The country is currently undergoing its fifth TPR, wherein it would report its efforts to reduce its regulatory barriers for foreign trade and services.
Professional Regulation Commission (PRC) Chairman Teofilo Pilando Jr. said the review will be crucial to entice new foreign investors in the country, and also to open up opportunities for Filipino professionals abroad.
He explained a good review from the WTO will encourage more countries to ease their restrictions for Filipinos to practice their professions in their territories. “They will reciprocate our efforts if they find it satisfactorily.”
Pilando earlier said the WTO has show interest in the remaining professions within the country’s Foreign Investment Negative List (FINL)—the list of sectors of the economy where foreign participation is restricted or banned.
In November 2017 the PRC reported that the government was able to reduce the restricted professions on the list from five to three. Currently, the FINL only covers radiologic technology, criminology and law.
The PRC also reported it was asked by WTO representatives, who visited the country last year, about the status of its implementation of the Asean MRAs.
As for the DOLE, the WTO required it to report on the government’s efforts to promote female employment in the information technology-business process management industry.
Pilando said they are hopeful the WTO will retain its favorable review to the country due to the said reforms. “So far, we have yet to receive any protest [from WTO about service],” he said.
Development blueprint
Former DOLE Undersecretary and University of the Philippines economist Rene Ofreneo said the country’s dependence on foreign workers may be a symptom of the lack of coordination among government agencies.
“What is the plan of the PRC? Will it license professionals to work abroad or locally? That is why it should coordinate with the DTI [Department of Trade and Industry] to determine this,” Ofreneo said.
He added this could be addressed through a development blueprint for its labor force to determine which industries should be opened or closed to foreign workers. The DOLE was able to address this problem in the past through its JobsFit report, which contained the labor-market trends it sourced from local industries and other government agencies.
Tutay said they are set to release their latest Jobsfit report this year.
She pointed out that this will determine which industries should be prioritized by the government so Filipinos can compete abroad.
“The challenge for our sector is to compete globally, because as of now, only our construction sector can compete abroad,” Tutay said.