News Releases

Update on Effects of Oil Price Decrease on the Employment of OFWs - 22 February 2016

(Following the instruction of Labor and Employment Secretary Rosalinda Dimapilis-Baldoz to all Philippine Overseas Labor Offices to provide weekly updates on the effects of the oil price decline on OFWs, the Labor Communications Office, in cooperation with the International Labor Affairs Bureau, is providing below a summary of the POLO reports for the week.)

In Riyadh, Kingdom of Saudi Arabia, the POLO reported there has been no drop in the number of job orders (excluding those for HSWs) for Filipinos; and that if this trend continues, the job orders for the month could easily eclipse those in February 2014 and February 2015. The leaders of the Philippine Council of Engineers and Architects, the Philippine Professional Organization, and other Filipino community groups with effective access to Saudi and foreign companies/employers in the Kingdom was reported by the POLO to have unanimously said it is “business as usual”.

On the issue involving the two Saudi construction companies—Saudi Binladin Group and Saudi Oger Ltd.—which were both cited in last week’s media statement of migrant organization, Migrante, both the POLO inJeddah and Riyadh reported the following:

Saudi Oger Ltd. employs 8,757 OFWs. In Jeddah and Western Saudi Arabia, it has 1,407 OFWs working in its construction division; and 1,667 in its maintenance division. Thus, the 20,000 figure cited by Migrante is bloated as this include workers of other nationalities.

As already reported, Saudi Oger Ltd. has cases that have been recurring since last year, even before the global oil price downturn. Some Saudi Oger workers, specifically those in its construction division, have been experiencing delays in their salaries that are not oil price decline-related, although the company has had lesser difficulty paying workers with salaries of 5,000 Saudi Riyals and below. This is the reason why some workers decided not to renew their contracts. But management has already announced through a letter to all its employees that starting March, all salaries will be paid before the end of the month and all outstanding unpaid salaries will be paid progressively in the coming months. It has no plans of terminating its employees, but merely to transfer them in certain divisions as part of its three-fold strategy.

A significant number of OFWs who have earlier decided to stop working while waiting for their exit visas and end-of-service benefits have resumed work; and that 300 more OFWs have opted to be repatriated or to transfer employment. The POLO is assisting 113 of these OFWs who filed complaints at the Saudi Labor Office.

For January 2015, the POLO verified and approved 1,579 employment contracts for professionals/skilled labor, (but excluding those for HSWs), an increase over the January 2015 approvals of 1,378.

Saudi Oger has repatriation cases involving 43 OFWs, none of whom has not yet come home. Between 2014-2015, total deployment to Saudi Oger was only 4,837. Of this number, 96 percent were deployed in 2014. The deployment in 2015 was less, reaching only 176 OFWs.

On the case of Saudi Binladin Group (SBG), and as already reported, the company was involved in a crane accident in Mecca last November 2015 that killed 107 and injured 400 pilgrims, hence, it has been "penalized" by the Saudi government in terms of not being awarded new contracts.

There are only 5,930 OFWs working under the SBG’s airport, building, and construction division. The POLO has no updated number of OFWs working for SBG’s subcontractors. There were 42 OFW repatriation cases involving SBG, with 14 OFWs already repatriated. This included the human remains of three deceased OFWs.

This week, a group representing 90 OFWs in one SBG project site in Riyadh visited the POLO to report 3-4 months of unpaid salaries. Some of the workers in the group were assisted by the POLO in 2013 when they reported similar delays in the payment of their salaries.

In the Eastern Region of Saudi Arabia, the POLO reported the similar situation last week: it has noted minimal decrease in contract verification for skilled workers due to strict processing of working visa by the Ministry of Labor due to Saudization.

In Dubai, UAE, the POLO reported 48 OFWs in four Dubai-based American companies—Transpo Group, AECOM ME, KEO International Consultants, and Hill International—affected by the companies’ decision to declare their positions redundant. The POLO is assisting the affected OFWs to get their end-of-service benefits.

In Abu Dhabi, the POLO reported a slight increase in the number of contracts processed, from 300 last week to 348 this week; a decrease in the job orders verified and processed, from 896 last week to 573 this week; and an increase in OECs issued, from 424 last week to 476 this week. Of the job orders verified and approved, 55 percent are in construction; 13 percent in hospitality; and 10 percent in the medical sector. A total of 23 job orders for the oil and gas sector were processed and approved, higher than the 16 job orders processed and approved last week. A company whose HR personnel the POLO interviewed said the company has not renewed its contracts with the government because of budget delays and it has resorted to dissolve some positions to save on cost. However, those whose positions were declared redundant were low-skilled and not Filipinos.

In Qatar, the POLO stood by its report last week: that only 22 medical staff of a government health center (Primary Health Care Corporation) have been issued termination notices, and seven (7) Filipino salesmen employed with Top International Trading and Services, a private company.

Also on last week’s report about the termination of 769 employees of the 22,000 worker-strong Hamad Medical Corporation, the POLO has verified that 300 of them were Filipinos (mostly 55 years old and above), bringing the total number of affected OFWs to 329. The POLO further reported that only one of the 329 has reached out to the Philippine Embassy and the POLO.

The POLO also said 31 OFWs working with Qatar Petroleum had sought assistance from the Philippine Embassy/POLO in May and June 2015, thereby belying the news that 3,000 OFWs were terminated by the government-owned oil company. The 31 OFWs—who included the OFW Momar B. Mundoc who had declared to the media he had not been assisted—were able to get no-objection certificates and offer letters from other companies. The Philippine Embassy has exerted efforts and made representation with the Qatar Ministry of Labor and Social Affairs and the Immigration Office on behalf of the workers.

For this week, the POLO reported that five (5) Filipino nurses received final settlement from Doha Health Care, a private company. The five will leave Qatar before the end of February.

The POLO has not received any more report of OFWs being terminated by reason of the oil price decline.

In Europe, the POLOs in Rome and Milan, Italy reported that as of date, the decline in the price of oil has no impact on employment of land-based and sea-based OFWs. The POLO in Milan issued 117 OECs during the week; and processed four (4) job orders. The effect of economic recession still lingers.

The POLO in Geneva, Switzerland, reported the same situation last week: no Filipino worker is directly employed in the oil and gas sector and POLO has not monitored any case of termination of OFWs in other sectors as of date.

In Washington, DC, the oil price drop has no impact on employment of OFWs; no case of contract termination/displacement and/or freeze hiring during the week.

In Australia, job orders processed during the week reached nine (9) involving 22 positions, bringing the total job orders processed since last week to 23 and the workers involved to 392; two employment contracts were processed; and six (6) OECs issued. There was no contract termination, but POLO monitored two separate cases of medical evacuation involving three Filipino seafarers, all of whom are in stable condition in separate hospitals. The POLO also reported two earthquakes that hit Christchurch and Auckland in New Zealand. No OFW was affected.

The next update will be Monday, 29 February 2016. For questions, please contact the Labor Communications Office at 527-3446.