Financial Considerations for becoming an OFW

ABS-CBN News Channel (ANC) with guest Susan Ople (President of Blas F. Ople Policy Center and Training Institute) produced this video On the Money: True Cost of Being an OFW to give an understanding of the cost for a Filipino going abroad.  According to Ople, the cause of Filipinos leaving for another country is not poverty but a salary differential.  Applying for a job overseas is a transaction between you and your employer not a favor given by a recruiter.   There is a great deal of fraud by fake agencies and recruiters so it is extremely important to do your research via the internet and asking referrals before paying any money to a “recruiter.”   Not infrequently, OFWs are victims of contract substitution:  meaning that as soon as the OFW arrives in their destination country, the nature of the contracted job and agreed upon salary change.  When this happens the OFW can report the situation to the Philippine Embassy and Philippine Labor.  However there are times when the Philippines government is unable to impose its law on the host country of the OFW. 

 

For those thinking of applying as an OFW, make sure you know:

• the specific nature of the job you are contracting
• how much the salary is
• the conversion rate of your salary into Filipino currency
• when your salary will be paid
• the cost of living (housing, transportation and food costs)
• the distance of travel to your job
• the exact nature of any benefits that are promised 

Here is a summary of the costs* incurred by an OFW:

• Placement fee (Should not exceed 1 month salary as approved by the POEA)
• Mandatory contributions to PAG-IBIG and PhilHealth which are set by law like (P1200 for 2014 and P2400 for next year 2015)
• Cost of Pre-departure Orientation Seminar: P100
• Passport fee: P950
• 2 Years Overseas Workers Welfare Administration (OWWA) membership US$25 (P1100)

*There are countries with hidden costs like Taiwan (requiring a broker’s fee between P60,000-P100,000)

You will be required to present a receipt for all of these expenses to the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA) before leaving the Philippines. 

And there are additional expenses: 

• National Bureau of Investigation (NBI) clearance
• Medical clearance
• Airfare
• Accommodation fees from agency while in Manila
• Travel costs to Manila before the international flight

**Domestic workers are exempted from placement fees.  However, there are many schemes created to extract money from domestic workers, like salary deduction so one must be very careful

Once you leave the Philippines you are on your own, so before leaving the Philippines:

1.  Make sure you have at least 3 copies of all your documents.  Keep one copy for yourself in case something will happen with others when you present them to authorities or your boss.
2.  Know the name of the Philippine ambassador, the address of the embassy, hotlines, emails, and websites for those who can help you if you are in need.
3.  Make a strategic plan with your family including your children and set clear goals:

• Know why you want to work overseas and communicate it clearly to your children.
• Clarify expectations and needs with your family and agree upon them together. 

4.  Develop a financial management plan

• Discuss the time table: how long you plan to stay
• Discuss savings and investments plans
• Discuss limits on purchases with your new income that will be much more than you are accustomed to making while in the Philippines
• Discuss how much to spend for priorities and needs.
• Discuss limits on what will be given or lent to friends who come asking for help once you are earning at a much higher rate
• MAKE A WRITTEN BUDGET

***Susan Ople recommends that you do NOT send all of your excess income to your family to protect yourself from severe disappointment when they do not follow through on your agreements

Choosing to work abroad is one of the biggest decisions you will make in your life and it should be made with as much accurate information as possible.  Many Filipinos put all of their hearts into an OFW job only to see their dreams come crashing down into reality because they have not carefully researched and weighed all of the factors that will affect them and their families.  

Psychological Impact of Overseas Filipino Worker on the Filipino Family

This video entitled The Trials and Triumphs of the Children of OFWs portrays the sacrifices of children growing up away from an OFW parent.  A parent going abroad begins with high hopes and dreams of alleviating their poverty and giving their children a better future, but often becomes the very thing that breaks the family apart.  The length of the separation, the confusing change of roles and the pain of loneliness are not compensated by the money being sent by an OFW parent.  To navigate this difficult emotional pain, children of OFWs need to be able to stay focused on the goal for which their parent went abroad and endure a the pain and loneliness, sacrificing their feelings for their family.   

ABS-CBN News of the Philippines produced this TAGALOG video entitled “Tragic OFW stories.”  Kabayan Special Patrol reporter Noli De Castro documents the tragic story of 2 OFWs: Maria Arlene Carbon fell to her death from the 43^rd story of her building in Hong Kong and her employers reported her death as suicide, but her family questions their version of the events. Albert Bautista worked as an engineer in Jeddah, Saudi Arabia.  He was killed in an accident, but there are conflicting details in the account of his death and they are still looking for his Filipino who was with him to give his account of the story or to know what happened to him.  OFWs leave the Philippines seeking good paying jobs, but there are hidden dangers and high risks in many of these situations. 

 

http://www.academia.edu/5241905/Overseas_Filipino_Workers_A_Risk_Society_Analysis

The link above is a short paper written by Leo Urrutia that talks about risk analysis for Overseas Filipino Workers (OFW).  The author describes the work of the OFWs as “3D jobs,” meaning dirty, difficult and/or dangerous.  The nature of their work, being out of their country and under the control of their employers makes OFWs quite vulnerable to oppression, abuse, and sometimes even death.  The paper challenges the Filipino notion that the OFW is a hero, and makes the reader wonder if many of them are not victims.