Most OFWs go into debt to fund deployment


WHILE the average recruitment costs remain low in the Philippines, prospective Overseas Filipino Workers (OFWs) still resort to loans from family and friends as well as pawning assets in order to move, according to the World Bank.

In its recent report, the World Bank said the recruitment costs for Qatar-bound OFWs were on average about $483. This is only equivalent to 1.1 month’s salary and is considered one of the lowest cost corridors in the region.

However, family support still accounts for 40 percent of the recruitment cost; personal funds, including savings and salaries, 25 percent; employer support, 23 percent; and borrowing from friends and family, 18 percent.

“The share of migrants’ borrowing via formal sources such as banks is below 3 percent. A similarly small share [3 percent] reported pawning or selling their assets to finance their move abroad,” the report stated.

“The pandemic has further brought to the spotlight the issue of recruitment costs as migration costs due to limited flights, quarantines, and repatriation increased while workers experienced job loss and reduced wages,” it added.

The data also showed women migrant workers are more likely to sell or pawn their assets and depend on family support to obtain the needed financing to cover recruitment costs.

The World Bank data also showed that male OFWs, meanwhile, were more likely to resort to loans from family and friends as well as obtain formal loans such as through banks.

However, in terms of benefits, male OFWs are more likely to receive health insurance or medical allowance from their employers; get paid for overtime work; and be compensated for work-related accidents.

Male OFWs are also more likely to receive paid leave or vacation leave; get separation pay; paid sick leave; and get retirement pension.

Female OFWs, meanwhile, are more likely to receive housing or lodging benefits as well as rice or food allowance or other consumer goods.

“There is a huge gender difference in accessing various types of benefits,” the World Bank said. “Three-fourths of the men reported receiving overtime compensations whereas only 29 percent of women reported the same. Women were also far less likely to have access to health and medical insurance, compensation for work accidents, paid leaves and sick leaves, and separation pay.”

The World Bank said this is possible given that many female OFWs are domestic workers and are live-in helpers. They are also not compensated for overtime work.

Earlier, the Bangko Sentral ng Pilipinas (BSP) disclosed that cash remittances from Filipinos overseas grew 3.5 percent to $2.76 billion in January 2023.

Based on data from the BSP, the expansion in cash remittances in January 2023 was due to the growth in receipts from land- and sea-based workers.

The growth in cash remittances from the United States (US), Saudi Arabia, Japan, and Singapore contributed largely to the increase in remittances in January 2023.

In terms of country sources, the US posted the highest share of overall remittances during the said month, followed by Singapore, Japan, and Saudi Arabia.