Date Posted: November 14, 2010
Source: Arab News

JEDDAH: The Philippines' biggest group of recruiters said it will stop sending workers abroad indefinitely starting Monday to protest "exorbitant" premium rates being imposed on them by three insurance consortia.

In a press statement, the Philippine Association of Service Exporters, Inc. (PASEI) said its member agencies numbering 750 will stop the processing exit clearances of applicants for overseas jobs with the Philippine Overseas Employment Administration (POEA) until the government stops the "highly scandalous" rates.

An average of 2,500 Filipinos leave for work abroad everyday, with Saudi Arabia as the biggest destination, according to the POEA.

PASEI said it does not object to providing welfare and insurance protection not covered by the Overseas Workers Welfare Administration OWWA), "but the premium for these protections dictated by the 3 insurance consortia is so ludicrous."

"It actually amounts to forcing the recruitment industry to work and to support the business of the insurance industry at the expense and death of the overseas employment industry," the group said.

Reports by the Hong Kong media said some residents have suspended hiring Filipino helpers due to the compulsory insurance premium, while the Philippine media quoted the Society of Hong Kong-Accredited Recruiters of the Philippines (Sharp) as saying its members are alarmed by the new policy.

A recruitment industry leader, Lito Soriano, also warned that overseas Filipino workers (OFWs), especially those bound for Asian countries, would eventually end up shouldering the insurance premium despite government warnings against passing on the cost to workers.

"OFWs will eventually pay for the insurance just as they, in reality, pay for the placement costs," Soriano was quoted by online site GMANews.TV as saying.

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The controversy stemmed from the new law, Republic Act No. 10022, an amendment to RA No. 8042 or The Migrant Workers and Overseas Filipinos Act of 1995, which requires recruitment agencies to cover their recruits under an insurance that complies with the requirements of the Compulsory Insurance Coverage for Agency-Hired Workers.

Pasei President Victor E.R. Fernandez Jr. also faulted the three insurance consortia accredited by the Philippine government of acting like a cartel, noting that the three had uniformly pegged their premium rates at $72 for a one-year plan and $144 for a two-year plan.

The accredited insurance providers have been identified by the POEA as the Paramount Life and General Insurance Corp., Philippine Charter Insurance Corp. and United Coconut Planters’ Life Assurance Corp.

"The recruitment industry finds these rates totally unconscionable. Hence, the call for the indefinite deployment holiday," he said.

Fernandez explained that an agency that deploys a worker with a monthly salary of $300 (for an unskilled worker) can collect only $300 from the worker as placement fee.

"Imagine if the agency procures an insurance coverage for this OFW at $144, about 50 percent of the agency’s income already goes to the insurance premium. Where will recruitment agencies get the fees to pay for other costs, overhead, salaries, income, etc.?" he asked.

Unless the government acts quickly to resolve the dispute, applicants could lose their jobs as visas will be allowed to expire as a result of the recruitment holiday. 

PASEI urged the Insurance Commission "to exercise prudence and fairness in favor of the consumer especially to ensure there will be no pass-on of cost burdening further OFWs."

It urged Congress to investigate the Insurance Commission on how it can endorse such "exorbitant and unconscionable insurance premiums," prodded the Philippine Overseas Employment Administration (POEA) not to just watch and do nothing, and appealed to Vice President Jejomar C. Binay in his capacity as Presidential Adviser on Overseas Filipino Workers’ (OFW) Concerns to help resolve the problem.

It further asked President Aquino to "directly order a roll-back of premium rates" and "to investigate how the highly scandalous insurance premiums were arrived and to find out the “invisible hands and brains behind this surreptitious machinations and highly irregular scheme."