Sunday, January 01, 2012

Migration and Freedom 14: Shrink or Abolish the POEA

Employment, whether domestic or foreign, is a private contract between the employers and employees. If the terms and price are right, a contract can be signed between the two; if not, the employers will turn down a job applicant, or the latter will turn down a prospective employer's offer. The role of government is mainly to enforce the rule of law, the private contract between the two, to set transparency mechanisms so that both camps are really what they say they are. That is, a prospective employer is indeed a hotel/restaurant and not a prostitution house looking for innocent women to traffic and victimize.

When a government agency comes in to make such private contract as complicated and as costly as possible by requiring lots of permits and certificates, both from employers and would be employees, that agency is becoming a parasite and hence, should either be drastically shrank or abolished altogether.

Here are three papers that argue for the shrinking or abolition of the Philippine Overseas and Employment Administration (POEA). The first is a newspaper commentary yesterday, the other two are my old papers on the subject.

Second-class citizens

By:  *

THIS Christmas season, thousands of overseas Filipino workers (OFWs) will have had their constitutional rights violated at the world’s worst airport.

I met Marc one Sunday evening at NAIA 1. He skipped dinner with his family, not wanting to risk a long Philippine Overseas Employment Administration (POEA) desk queue and miss the 10 p.m. flight back to Singapore. An elite Ateneo Management Engineering graduate now in a global investment bank, he is one of thousands of young professionals in Singapore and Hong Kong juggling priceless short trips home with an international career. He is one of thousands of young professionals resigned to sacrificing brief moments with their families for inane POEA queues.

After my first Christmas home, I found myself begging a POEA officer to issue my clearance because my plane was taking off in 30 minutes. Without looking up, he sternly ordered me to return to the queue and wait. I boarded only after staring down the guard at immigration, claiming to be a tourist.

It is an open secret that the POEA was formed by torturers left jobless by Edsa. In Singapore, I must travel during office hours to our embassy, not the most accessible of places, to purchase an Overseas Employment Certificate (OEC). My papers are never checked and I routinely write conflicting information in the forms. (I will try “drug mule” on my next OEC). I must then have the OEC certified at NAIA’s POEA desk because it might be fake.

Being the world’s worst airport, NAIA 1 requires Filipinos to queue outside to enter; foreigners have heralds who shout “Business class, business class!” and ask Filipinos, guards included, to make way. Because the POEA desk is brilliantly located outside the departure area, one better be early to first queue at the POEA desk then queue to enter NAIA 1 before one’s check-in counter closes. One may be forced to queue to enter, queue to check in, exit NAIA 1 to queue at the POEA desk, then queue yet again to reenter. Especially if a 747-load of travelers to Los Angeles intervenes, one can readily miss one’s flight and get fired.

The best part is check in, and immigration officers ask to see my Singapore employment pass anyway. Shown my hard-won OEC, they explain that it and the POEA certification may be fake.

Amid such silliness, picture OFWs clutching thick envelopes of documents and their last shreds of dignity as they make obeisance to the POEA. Picture a Filipino professional, trying to be taken seriously in an international team, forced to beg one’s colleagues to leave early for the airport because his OEC might be declared fake.

And this is just NAIA; imagine the hell that is the main POEA office that Stella Gonzales visited. (NB: The ultra-efficient Joseph Jose is the sole smiling POEA officer who never berated me for not printing my itinerary or not arriving three hours before my flight. Be sure to queue for the long-haired Malaysian rock star lookalike.) Ironically, an OFW may escape becoming a second-class citizen in one’s own airport by giving up his citizenship....

My parents walked to Edsa for our Constitution’s trivialized sentence: “Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health, as may be provided by law.” The Supreme Court reiterates that the right to travel is a fundamental human right, and one recognized in the Universal Declaration of Human Rights. The ruling Silverio v. CA emphasizes that the explicit list of exceptions “national security, public safety, or public health” is “a reaction to the ban on international travel imposed under [Marcos] when there was a Travel Processing Center.”

Phil. Ass’n of Service Exporters v. Drilon, in upholding a selective ban on female OFW deployment to specified countries, categorically stated: “Had the ban been given universal applicability, then it would have been unreasonable and arbitrary.” Thus, the POEA’s blanket curtailment of the right to travel is blatantly unconstitutional. So disenfranchised are OFWs that the right to travel only received attention when Gloria Macapagal-Arroyo and her neck brace tried to invoke it; balls and chains on every single OFW have long gone ignored.

There are undeniably difficult policy issues. Our Singapore consuls regularly work miracles for desperate Filipinos with an unbound knack for getting duped, down to sobbing detainees in Changi Women’s Prison who were promised waitress jobs. The Singapore embassy ministers to an OFW population three times the size its staff can theoretically support. Nevertheless, convoluted, inutile procedures imposed on everyone are an unconstitutional placebo, not a solution.

Singapore’s OFW profile is evolving; even the CEOs of the Bank of Singapore and Credit Suisse are OFWs. The growing majority are now professionals who do not need or want the POEA’s so-called protection. OFWs remain treated as the perfect docile cash cows, voiceless in government as fee upon inane fee and procedure upon inane procedure are heaped upon us. It is not an option but a constitutional imperative to find a rational way to protect those who need protection while respecting the general population’s right to travel.

I have already accepted the burdens of proudly being a citizen of our screwed up country. But is it too much to ask that the POEA leave reunited families to have dinner in peace? The constitutional right to travel was intentionally strengthened after the Marcos-era abuse; is it too much to ask that it not be violated, in the cruelest of ironies, at the Ninoy Aquino International Airport?

Is it too much to uphold our right to be free from the POEA?

* Oscar Franklin Tan was chair of the Philippine Law Journal in 2005 and student speaker at his 2007 Harvard Law School graduation. He twice won the Cortes Prize in Constitutional Law at the UP College of Law. He has worked as a corporate lawyer in London and Singapore and is an associate of Jones Day, one of the world’s largest law firms.

Here are my two old papers on POEA:

(1) POEA and OWWA Racket

January 15, 2010

I got this from my UPSE alumni association yahoogroups last December '09. There was no source (say a news report link, or a blog, etc.) given, only the body of the report was copy-pasted.

There should be some truth to these reports as COA was the main source.
Just one of the reasons why the POEA and OWWA should be abolished.

THE Commission on Audit (COA) has rebuked the Philippine Overseas Employment Administration (POEA) for "illegally" granting about P40 million in incentives and allowances to its officials and employees for the past three years.

COA also took the POEA to task for allowing its executives and employees who were issued mobile phones to download about P796,000 worth of games, tones, picture messages and other unauthorized items.

In its latest report, prepared by Director IV Roberto Marquez, COA said the POEA drew P24.048 million from the funds of the Overseas Workers' Welfare Administration (OWWA) to grant an "incentive allowance" to its personnel. Such use of OWWA funds is unauthorized, COA said.

It said that even if the OWWA Board of Trustees had justified the giving of the incentive allowance by citing the increase in OWWA collections from overseas Filipino workers, the move was "without legal basis."

Section 15 (e) of the General Appropriations Act, FY 2003 (as reenacted in 2004), "as well as previous general appropriation acts, provides that no government funds shall be [used] to pay honoraria, allowances or other compensations to any government official or employee, except those specifically authorized by law," the report stated.

Section 3 of Administrative Order 103 also bans national government agencies from granting new or additional benefits to their officials and employees "except for Collective Negotiation Agreement (CNA) Incentives and those expressly provided by presidential issuance," the COA said.

Although it recommended that the POEA management stop granting the incentive allowance, COA acknowledged that the issue is awaiting final disposition before the Legal Adjudication Office.

COA noted that the POEA granted P15.448 million for the CNA signing bonus and rice allowance to its employees, a violation of rules laid down by the Public Sector Labor Management Council.

COA said the POEA management and the employees' union agreed on a quarterly rice subsidy to its employees, including casuals, contractual and temporary workers, and a P15,000 signing bonus "to be given on a staggered basis within three years subject to the availability of savings."

On the strength of the agreement signed on December 10, 2001, the POEA granted P15.448 million from 2002 to 2004. But! the COA reviewed the payments and found they could have violated the rules on CNA signing bonus and allowances. Rice and other subsidies require "appropriation of funds," or approval from Congress and subsequent enactment of the President, COA said.

COA also cited a May 16, 2002, circular from the Department of the Budget and Management that said the President has issued a "moratorium on the grant of CNA signing bonus due to some problems raised on the payment and fund source."

COA added that the moratorium has been in effect until these problems are resolved and a policy is issued on the matter.

It also cited the July 11, 2002, decision of the Supreme Court in the case of Social Security System v. COA, in which it ruled against the signing bonus as a form of additional compensation under the Constitution.

COA said that despite the Court's earlier pronouncement against the granting of incentives and allowances, the POEA in 2004 still gave P7.2105 million to its employees and officials as signing bonus and rice subsidies.

The POEA justified its move by saying that the budget department had approved the release of incentives and allowances, COA said.

COA also questioned why the POEA failed to follow the guidelines in its memorandum on October 26, 2001, covering the use of cell phones after the POEA paid for the nonessential downloads made by its officials and employees.

The POEA is supposed to put a limit on the use of cell phones, but the audit on its telephone bills showed that P487,283.59 of the P1.3-million total from 2003 to 2004 consisted of charges in excess of the authorized limit.

Even POEA's bookkeeper in charge admitted that she could not impose limits on the use of ! the cell phones to some officials, COA said.

"We also noted that the POEA had incurred other charges amounting to P308,747.58 in the use of the mobile phones, in addition to the fixed charges of P400,002.80 due to subscription to Globe lines or plans. These additional charges are value-added taxes and currency adjustment fees. Other charges which are personal and which are easily incurred and billed due to the nature of line subscription, include share-a-load and its processing fee, GPRS such as Globe games, photo messages, polyphonic ring tones, digital postcards, photo album, cinema and magazine covers, premium java download, instant messaging and catxtcism, etc.," COA said.

To avoid further overpayments, COA recommended that the POEA coordinate with Globe to shift to prepaid cards and end the subscription of postpaid lines.

(2) Mandatory And Confiscatory Fees vs. OFWs

October 29, 2006

While government calls the overseas Filipino workers (OFWs) as the "new heroes", government actually also considers them as "new milking cows". Before one can work abroad, here are some of the required fees he/she must face:

1. POEA processing fee (get overseas employment certificate), $100
2. OWWA membership fee, $25
3. OWWA Medicare, P900 ($18 at P50/$)
4. Passport fee, P500 ($10).
5. Huge "placement fee" with POEA-accredited labor recruitment agency.
Amount here can range from zero (for those directly hired by the companies abroad) to P200,000 ($4,000), even higher for some.

Per Philippine Overseas Employment Administration (POEA), many of those "placement fees" are illegal; but still this is widely practiced.

To be accredited by the POEA to be a legitimate manpower recruitment agency, huge amount of money change hands, both legal fees and "under the table" fees. Such high fees can only be passed on to the aspiring OFWs.

The Overseas Workers Welfare Administration (OWWA) is another bureaucracy that extracts more money from OFWs even before they could fly and start earning.

In fairness to the government, it exempts OFWs from paying the travel tax, P1,620 ($33), but OFWs still need to get a certificate of exemption costing P200. I think they are also not exempted from paying the airport terminal fee, P550 ($11).

On OFW Remittances and Taxes

Remittances by Overseas Filipino Workers (OFWs) through the banks and other formal financial channels was around $10.3 billion in 2005; another $3.5 billion are estimated to have been remitted through informal channels (mainly through friends coming home) and carried personally when they come home. At P53/US$ average exchange rate last year, this was roughly about P730 billion, or 13.7 percent of the 2005 GDP of P5.3 trillion.

Such remittances are used for the household consumption of family members back home (especially for children’s education, allowances, health care and housing), as well as for small-scale investments (residential lot or agricultural land, a small shop, a jeepney or tricycle or farm tractor, etc.).

OFWs’ remittances are not taxed; ie, family members who receive the remittances receive the entire amount tax-free, except for the bank charges as remittance service fee. Government can capture a portion of such remittances through various forms of consumption-based taxes: VAT for many consumption goods and services (from hamburger to medical check-ups to school fees); excise taxes on tobacco, alcohol and petroleum products; real property tax for the house and lot, agricultural and commercial land; vehicle registration tax for the purchased vehicle, and so on.

See also:
Migration and Freedom 6: Passport and People Mobility, November 30, 2010
Migration and Freedom 7: Restrictions to OFWs , April 13, 2011
Migration and Freedom 9: Immigration bureaucracy, July 19, 2011
Migration and Freedom 10: Multiculturalism and the Norway massacre, July 25, 2011
Migration and Freedom 11: Two migration theories, September 03, 2011
Migration and Freedom 12: Visa-free entry in Asia, October 24, 2011
Migration and Freedom 13: Travel Tax Robbery, December 06, 2011
Nanny state 5: Extending min wage law to foreign employers, July 09, 2011
Pilipinas Forum 10: Migration and Singapore as a Social Contract, September 17, 2011

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