POEA overcharging OFW fees, P51 to $1

The Philippine Overseas Employment Administration (POEA) has been overcharging overseas Filipino workers (OFWs), collecting a $25 membership fee from them based on an exchange rate of P51 to $1.

Amid complaints from OFWs and criticism from Senate President Manuel Villar, the POEA the membership fee imposed by the Overseas Workers Welfare Administration (OWWA) on all departing OFWs would be based on the exchange rate of P42 to $1, or P1,050, instead of the current fee of P1,275 based on an exchange rate of P51 to $1.

But the rate adjustment will take effect only next year, the POEA said.

POEA chief Rosalinda Baldoz said the agency should not be accused of overcharging because they only collect the fees based on the rate imposed by the OWWA for processing work papers.

Earlier, the local recruitment industry claimed that POEA continues to collect higher processing fees, particularly the OWWA membership fee, despite the continuing dollar depreciation.

Lito Soriano, former president of the Philippine Association of Service Exporters, Inc. (PASEI), said OFWs are being shortchanged for the processing of their contracts with the POEA.

Although OWWA has already agreed to lower the membership fee, Soriano insisted that the new rate should be implemented immediately and not next year.

“OWWA should not wait a second longer to implement the lower fee because it would cost P2.5 million for the 100,000 OFWs who are mandated to pay such fees before returning to their jobs abroad after the holidays,” Soriano said.

Senate President Manuel Villar Jr., in a statement released yesterday, said the corrective move must be implemented immediately.

“I am calling for the immediate implementation of the reduction of the fee charged to overseas Filipino workers and the accounting of all excess collections,” he said.

“At the same time, I am pushing for a Senate probe into the propriety and rationality of other similar fees imposed on OFWs,” he added.

“I am appealing to the POEA to immediately correct this practice and show more compassion to the hardships and plight of OFWs who need to labor overseas,” Villar said.

The apparent overcharging had prompted Villar to file Senate Proposed Resolution 247 urging the Senate Committee on Labor, Employment and Human Resources Development to look into the reported excessive collection of processing fees from OFWs with the objective of formulating more caring, meaningful and truly labor-friendly social legislation for overseas Filipinos.

Villar wants to know why the POEA is still using the exchange rate of P51 to $1 as basis for the conversion of the $25 OWWA membership fee, which is equivalent to P1,275.

“Why are they collecting P1,275 from OFWs when in fact, with the prevailing rate of P41 is to $1, they should only be collecting P1,025 or a difference of P250,” Villar said.

“The strengthening of the peso has already adversely affected the income of the OFWs. Let us not cause them further suffering with the imposition of unfair fees,” the Senate president said.

He also called for an audit of the collected fees to ensure that the same redounds to the welfare of the OFWs and their families.

Insurance for green bucks

Meanwhile, the government will soon offer “insurance coverage” for dollar remittances to protect the millions of Filipinos working abroad from the plummeting value of the dollar.

Commission on Filipinos Overseas (CFO) Chairman Dante Ang yesterday reported that government is now looking for ways to freeze the peso-dollar exchange rate with the payment of a very small insurance premium.

“We are now discussing with the Development Bank of the Philippines and other banks the possibility of implementing an insurance coverage for dollar remittances from our OFWs in the hope of mitigating the impact of the rising peso,” Ang disclosed.

He noted that government and bank representatives are also trying to come out with an insurance system that would cushion the impact of dollar depreciation but will benefit workers in case of devaluation.

“The system we are working on is actually a win-win solution because OFWs would be protected from peso appreciation but will also benefit from peso depreciation,” Ang pointed out.

At this time, Ang said, the only hurdle to the proposed policy is the fact that banks cannot implement such a policy for individual workers.

“The problem right now is that banks cannot accommodate individual insurance coverage but they can offer it to groups of 10 to 50 OFWs who would be sending their remittances through the same bank,” he explained.

Ang added that the CFO and other concerned agencies are also undertaking efforts to lower the remittance fee to $2 or even less per remittance.

“Given the volume of dollars that our OFWs are remitting from abroad, I believe we can lower the remittance fee as we are now negotiating with various groups in the United States and Australia,” he said.

Also yesterday, the wireless services provider Smart Communications, Inc. (SMART) announced a project that would provide P1-billion livelihood loan for OFWs.

Mon Isberto, SMART public affairs executive, said the livelihood program to be implemented by the DBP would provide additional earnings for OFWs and their families.

“Through the program, OFWs will be able to invest their hard-earned money in a potentially lucrative business like Internet café and help them prepare for their eventual retirement,” Isberto said.

The livelihood program is payable in 12 easy monthly installments by the OFW from wherever he is worldwide through the DBP Remit program.

To apply for the loan package, OFWs may visit the DBP Remittance Center at the DBP head office in Makati. – Christina Mendez