Virus, oil price plunge to cut 400-k OFW jobs

By Cai U. Ordinario & Recto L. Mercene

THE coronavirus 2019 (Covid-19) pandemic that has paralyzed economies, and the decline in oil prices could render as many as 400,000 overseas Filipino workers (OFWs) jobless, experts said at the weekend. This in turn would slow consumption, the primary driver of Philippine economic growth, this year.

In an Ateneo de Manila University (ADMU) policy brief, Ateneo Center for Economic Research and Development (ACERD) Director Alvin P. Ang and Institute for Migration and Development Issues (IMDI) Executive Director Jeremaiah M. Opiniano estimated around 300,000 to 400,000 OFWs will be laid off or suffer pay cuts due to the pandemic.

Ang and Opiniano said this will likely cut the remittances from OFWs by 10 to 20 percent or as much as $3 billion to $6 billion, “the steepest decline in remittances in Philippine migration history.” This means remittances could only reach $24 billion to $27 billion this year from $30 billion in 2019.

Their estimate of $3 billion to $6 billion fits in with a similar estimate made by House Ways and Means committee chairman Rep. Joey Salceda last week. Salceda, an economist and former investment banker, said modeling made by experts he tapped had projected as much as a $5-billion yearly decline in remittances, which have shored up the Philippine economy since the ’70s.

The dire predictions came as Overseas Workers Welfare Administration chief Hans Cacdac, citing official estimates during a radio interview, said more than 10,000 OFWs including seafarers have returned to the country since the repatriation wave started.

This excludes the 2,500 OFWs who were caught by the travel ban in Manila and are now under the care of OWWA and a few of the manning agencies who hired them. Cacdac directed the 15 other manning agencies to give assistance to the Filipino workers.

As many as 5,000 to 6,000 Filipino seafarers were stranded on dozens of cruise ships that got stuck in lockdowns around the world as governments raced to arrest the spread of the deadly respiratory virus, cases of which breached the millionth mark before the weekend. As crew members serving the needs of quarantined passengers round the clock, many OFWs were exposed to Covid-19 and have themselves fallen ill, the Department of Foreign Affairs (DFA) reported earlier.

In their analysis, Ateneo’s Ang and IMDI’s Opiniano said, “These base-to-worst case scenarios are significant numbers hitting the economy externally and then internally. With overseas Filipinos’ remittances fueling national consumption, we can lose 20 percent to 40 percent of consumption due to the pass-through effect of remittances,” referring to the job loss and remittance plunge.

Grim picture

The Covid 19-induced lockdowns and work stoppage have put global economies in limbo. Multilateral institutions as well as international and local think tanks have painted a grim picture for global GDP growth this year.

The Philippines is not spared as the enhanced community quarantine (ECQ) remains imposed over Luzon island, where the National Capital Region, Calabarzon and Central Luzon regions are located. The three regions account for 60 percent of the country’s GDP. The lockdown began March 17 and should end April 13, but there are mounting calls to extend the ECQ because mass testing—crucial to mapping infected populations and thus prevent spikes in contamination—will be under way only on April 14, which means unleashing the work force on the mass transportation system by April 13 would be exposing so many to the virus.

Middle East

According to Ang and Opiniano, another concern when it comes to the plight of OFWs is the decline in oil prices. They estimate that if the current trend continues, more Filipinos in the Middle East will be out of jobs or suffer pay cuts.

Based on the 2018 National Migration Survey of the Philippine Statistics Authority (PSA), majority of Filipinos working abroad went to the Middle East.

Data showed 20 percent of all Filipinos who migrated abroad in the past five years went to Saudi Arabia. Another 15 percent went to the United Arab Emirates; 7 percent went to Kuwait; and another 7 percent went to Qatar.

“Many countries are on lockdown and all the oil producers in the Middle East [where nearly half of our OFWs are based] are at risk with falling oil prices. If this price trend continues, the Middle East might be forced to stop oil production and possibly lay off many workers—including Filipinos,” Ang and Opiniano said.

In order to address the problem, Ang and Opiniano recommended the strict monitoring of the plight of OFWs and rapid assessments made of how many will be displaced from their jobs, similar to the 2008-2009 Global Economic Crisis.

Ang and Opiniano also said the government needs to track the assistance given by host countries to OFWs, in order to buy agencies such as OWWA, Social Security System (SSS) and Philippine Health Insurance Corp. (PhilHealth) some time to address OFW concerns.

The authors said private insurance companies should also activate the provisions of the insurance paid by OFWs that pertain to repatriation expenses.

PhilHealth should also cover the health expenses of Covid-19-infected returning overseas workers through its Overseas Workers Program (OWP), they said.

DFA gets waves of workers

On Sunday, the DFA welcomed 302 distressed workers from Kuwait, “the fifth straight day of repatriations of our kababayan.”

The DFA on Saturday said 4,349 seafarers from cruise ships have been repatriated since the arrival of 444 seamen from the Diamond Princess in March. That vessel got stuck off the port of Yokohama, as Japanese authorities refused disembarkation following the infection of some passengers.

Added to the mounting numbers of returning seamen are 1,839 Filipino crew members of five Royal Caribbean Cruise Lines scheduled to arrive last week of April.

“Instead of chartering planes, the company decided to return a total of 2,584 crewmembers in three of their sailing vessels,” recruitment executive Emmanuel Geslani said.

All five Royal Caribbean ships have dropped anchor off Australian cities, he said. There are also Indonesians, Chinese and Indian crew members from the three ships that are being returned to their respective countries.

The returning ships are the Spectrum of the Seas, Ovation of the Seas and Voyager of the Seas. These ships are to set sail to Indonesia, the Philippines and China “and will be refueled and restocked with the healthy crew before departing to a long journey to Asia,” Geslani said.

The Spectrum of the Seas is expected to arrive in Manila on April 22, to unload 577 Filipino crew, while 382 Filipino seamen will leave their ship, the Celebrity Solstice, to board the Voyager of the Seas for the trip back to Manila.

A total 880 Filipino crew members from Ovation of the Seas will transfer to the Voyager of the Seas, currently sailing off the coast of Bali, Indonesia, on April 19, 2020. This ship will then sail to the Philippines and reach Manila on April 25.

“This will be one of the largest contingents of returning Filipino seafarers since the coronavirus pandemic forced some 100 cruise ships to call at the nearest ports of return to their homeports,” Geslani added.

He said the five Royal Caribbean Cruise Lines have disembarked all their passengers in Australia, while all the crew members have been on quarantine inside passenger cabins “except for the technical and catering crews.”

Also expected to arrive are the Filipino crew of some 60 cruise ships, some of which are sailing in the Caribbean, unable to find a friendly port, while others are headed toward ports in Florida.

60 cruise ships

Consul Jose Victor V. Chan Gonzaga reported from Washington, D.C., “that there are more than 60 cruise ships with Filipinos on board these ships.”

Estimating an average of 400 crew per ship, that would be about 2,400 Filipino seamen who could be rendered jobless and majority would be forced to return home, he said.

Gonzaga looks after Filipino communities in 10 US states, 23 Caribbean countries/territories, and the District of Columbia (plus over 60 cruise ships with Filipinos on board).

Meanwhile, it was reported that the cruise ship Zaandam, with 203 Filipino crews, has arrived at Port Everglades, Florida, to offload passengers for medical treatment and for transport home.

The Filipinos remained in their cabin and were not allowed to leave the ship.

The Maritime Executive reported that guests have not been off the ship since March 14, “and more than 100 have reported flu-like illness. Four have died, including two fatalities attributed to Covid-19, and at least nine have tested positive for coronavirus.”

Image credits: Roy Domingo