Controversial POEA Memorandum Circular No. 4

OFW’s are up in arms over the release of Memorandum Circular No. 4 by the POEA which inconveniences employers overseas who want to hire Filipino’s directly without going through an agency. [Article's here, here, here and here.]

The said memorandum makes the Filipino Professional less employable in the eyes of foreign employers due to the added bureaucracy. Jobs destined for highly skilled Filipino’s will now find themselves in the hands of other skilled migrant nationalities, of which I have to say, are as abundant and as highly skilled as Filipino’s. This in turn threatens the inflow of foreign capital via remittances through the country.

In what could be bluntly characterized as a display of extreme hubris, the Philippine Government, represented by the POEA, are strictly requiring employers to secure a certificate from the Philippine Labor Attache of the Philippine Embassy in their country which will also require approval from the DOLE Secretary in the Philippines before they can directly hire Filipino’s. With this, it has been made mandatory for the company to get repatriation bonds and salary bonds from Philippine Government Accredited Bond Agencies for each Filipino Employee they hire. The Philippine Government not only looked the gift horse in the mouth, but took it to the dentist to give it some braces.

The POEA has seemed to overlook the fact that Skilled OFW’s who have been hired directly, will by their own accord, reject an employer if they feel that they are not getting the proper benefits and salaries.

Shrieks of “Ill advised”, “Not Carefully Thought Through”, and “Added Avenue for Milking OFW’s by the POEA” have resounded through the various OFW online fora.

The Philippine Embassy in Singapore was swamped with calls from irate OFW’s. In what could be judged as a hasty press release, the order of the memorandum was broadcast in the broadsheets with the implementing guidelines not yet in the hands of the enforcing embassies. This has led them to announce that they are not implementing MC4 till they receive clear guidelines from the POEA, but sadly the damage has already been done.

I wouldn’t be surprised if some Filipino’s have already had their application for employment permits revoked by their would be employer’s because of the inconvenience of these requirements (unverified reports in the online forums have stated that this is indeed occurring).

“Who the hell do you think you are? If you don’t want our money somebody else will gladly take it.” must be what these employers are thinking right now with these added requirements.

Before, Professionals going abroad on their own to look for jobs armed with tourist visa’s, had but to hurdle Immigration Officers who would stop them if they found out that they are going there to seek work without passing through the POEA (makes you want to check whether we are still living in a democracy or not). Now it seems that a permanent brick wall has been placed by no less than the Philippine Government which make Filipino’s less hire-able (Goodbye Strong Republic!).

Although the government could reason out that this is for the protection of the OFW’s, OFW’s shot back that this was hasty generalization on their part by classifying all employers as having the potential to abuse their foreign workers. Not to mention that it’s usually the local Philippine agencies to blame for bad contracts being received by our OFW’s. I myself had a friend who’s sister was victimized by one of these agencies, ending up as a driver in the Middle East instead of what she initially signed up for. The Philippine Government should train their guns at these agencies and countries which have job functions that are prone to worker abuse instead of generalizing all to be abusive.

Memorandum Circular No. 04 has caused a massive short term problem to the OFW’s and potential OFW’s. I positively believe that it will be amended or scrapped owing to the uproar it caused. But when?, I don’t know, since historically the powers that be have always proven to be callous to the cries of its constituents (unless it’s an election year or an angry middle-class mob is massed outside their windows) In order to speed it up further and prevent another memorandum from being passed similar to that one OFW’s could:

  1. Band together in their respective adoptive countries. Form a group and elect leaders which can represent them and issue joint statements so that rules like these can be studied first and consulted with them before it being passed.
  2. Establish ties with other OFW organizations from other countries so as to further strengthen their numbers.
  3. Sign up for overseas voting rights so as to have leverage with politicians and so that they as an accredited Philippine Minority
    can be heard.
  4. Get your relatives in the Philippines into the fight, have them petition their councillors, board members, congressmen and senators.
  5. When all else fails, implement a Remittance strike which effectively stops the inflow of OFW remittances to the Philippine’s. 4 months should be enough that it will cause investment houses to downgrade the Philippine Rating enough to limit our lending rates. That should get our government’s attention.

Its bad enough that OFW’s have to contend with loneliness, being away from their families, missing out on the chance to watch their children grow up and be a positive influence in their lives. But now having your livelihood placed in jeopardy by a government that can’t even provide a decent investment climate to provide you jobs to keep you from leaving, yet happily receive your hard earned cash to help project an image of a robust economy, makes you really want to think whether or not the Philippines is really worth leaving for good.

Acknowledgement to PinoySG – The Filipino Portal in Singapore and their community for most of the material for this article.


10 Comments

  1. Well, considering that

    a) Dollar remittances have contributed to the steady decline of the dollar’s value on top of the US subprime crisis

    and

    b) Poaching and brain drain of IT professionals in the country continue unabated despite the fact that salaries are increasing for >4/5 year experienced workers, especially to Singapore

    then this might actually be a good thing.

  2. Jon, hopefully POEA’s memorandum circular will be a good thing in the long run. However…

    1. USD’s decline is not due to remittances alone but to the overall poor performance of US economy compared to a more robust growth in SE Asia, including the Philippines.

    2. I don’t see any wrong in the continued unabated brain drain, especially to SG. Good jobs are not that plenty in the Philippines. It is the right of an individual to choose who and where he would be employed. It so happens that Singapore is much more safe and that compensation for IT professionals is more competitive. Here’s the bottomline of the brain drain; economics and family survival.

    Having forged most of my career almost as an overseas filipino, IMHO, POEA’s MC will do more harm than good taking red tape and corruption into consideration. OFWs experience hardships not just abroad but from the hands of our _own_ government as well. Just visit POEA at Mandaluyong and you’ll have a glimpse of the tip of an iceberg of what we, OFWs, are experiencing.

  3. the ramifications i thought of — superficial as they are — scare the crap out of me.

  4. Richard,

    The problem with the brain drain, unfortunately, is not the ramifications for the Filipino worker but rather for those who want to put up business.

    What happens is that, much like the “shrinking middleclass” problem when it comes to economies that progress too fast which doesn’t address the needs of those in poverty thus creating a “great divide” where there are a small upper class, a just-slightly-larger-than-the-upper-class middelclass and a huge lower class, in the IT industry there is a small, well paid senior class, a just-slightly-larger-than-the-senior-class intermediate junior/senior level who are in the 30K/mo -> 100K/mo range, and then below that are the huge numbers of junior and freshly graduated n00b/copy-paste-but-don’t-understand-code type devs.

    If I were to set up a business and can’t afford either the intermediate or senior devs because I can’t afford the good ones and everyone in the middle is in Singapore, I’m left with a code monkey market.

    And as if any of these guys will go back. Hell no, many of them will settle in their host countries or immigrate because they grew up with their parents telling/teaching them that the Philippines is hopeless and it’s not worth doing anything here.

  5. Well Jon, I know your point. But can’t you see? The thing that screws IT startups are not the migrating hotshot developers but the government policies. Competitiveness is not really about developers, its about enterprises. With the kind of help our government gives to non-bluechip Philippine companies, do you think these local businesses would standup to their multinational and conglomerate counterparts. Yes, I know for sure there are good Filipino-owned small companies, but the question is, are they enough. With all those OFWs coming back to the Philippines to look for work, do you honestly think there is enough?

    And besides, if I am a senior dev, as you call it, I’d choose a company with a big name and big financial package if the level of technical competency and satisfaction are the same.

    And please don’t assume that people never come back because of parents telling their children that the Philippines is hopeless. Look around, everybody IN the Philippines says that. But take the resolve of OFWs differently. Most of these people just want to earn a good living and long to return home.

    See, the problem is neither businesses nor employees nor allegiances nor preferences. IT IS our government.

  6. See, the problem is neither businesses nor employees nor allegiances nor preferences. IT IS our government.

    And people love saying that because it absolves them completely and cleans their hands from any responsibility to solve the problem. ;)

  7. Very strong words here huh, and i couldn’t agree with you more!

  8. My friends, this can’t possibly be a good thing. I am an OFW and I would like to come back to the Philippines. But I have to wait for the right opportunity before I can do that. With this memorandum, I might be forced to come back home without a job. I’ll be jobless. What’s the point of having all the brains back in the Philippines when those brains will just be falling by the wayside?

  9. This is just going to serve the agencies which supply man power to countries like the US and the UAE. The problem is going to hit hard the Filipinos and the employers who require the OFWs to work for them. I fail to understand why the memorandum has come at a time when the OFWs themselves are finding it hard to sustain themeselves abroad? Instead of coming up with such moves, the government should create employement opportunities in the country, I feel that would stop the brain drain.

  10. Ronald /

    Hey Jon, then that would be the problem if you want to start an IT business here in this country. Unless you can afford to pay the equivalent rate Singapore is paying, then hell no we will work in this country.

Trackbacks/Pingbacks

  1. POEA’s new rule on ‘direct hiring’ whips up storm of protest - tonyocruz.com - [...] Javellana, writing on Pinoy Tech Blog, said: Its bad enough that OFW’s have to contend with loneliness, being away …
  2. My Shaldan » Blog Archive » Controversial POEA Memorandum Circular No. 4 - [...] the inflow of OFW remittances to the Philippine’s. 4 months should be enough that it will cause investment houses …

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