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JOSEPHINE J. FRANCISCO Philippines

JOSEPHINE J. FRANCISCO Philippines. G ENERAL A GREEMENT ON T RADE IN S ERVICES (GATS). Provides a framework for temporary stay of people in other countries for the purpose of providing services. C HALLENGE FOR THE P HILIPPINES. • Take advantage of the opportunities.

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JOSEPHINE J. FRANCISCO Philippines

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  1. JOSEPHINE J. FRANCISCO Philippines

  2. GENERAL AGREEMENT ON TRADEIN SERVICES (GATS) Provides a framework for temporary stay of people in other countries for the purpose of providing services

  3. CHALLENGEFOR THE PHILIPPINES • Take advantage of the opportunities • Untangle from existing institutional barriers to liberalization of movements of temporary migrants

  4. I. Trends in overseas employment, its economic contribution and composition of Filipino service providers II. Barriers to free movement of migrants, particularly Filipinos

  5. I. TRENDS IN OVERSEAS TEMPORARY MIGRATION EMPLOYMENT Labor migration is not a new phenomenon among Filipinos

  6. OVERSEAS EMPLOYMENT PROGRAM (1974) • Serves as a temporary measure to ease the tight domestic labor market • Stabilizes the country’s balance-of-payment position • Serves as an alternative employment strategy for Filipinos

  7. OVERSEAS DEPLOYMENT IN GENERAL

  8. Processed and Deployed OFW’s

  9. 1995 - 2000 5.32% annually 1997 - 1998 11 to 14% 1999 - 2000 less than 1% Deployed Landbased OFWs

  10. 1995-2000 25% Deployed Seabased OFWs

  11. 1995 – 2000 (44%) 1995 – 2000 48% Deployed Land-based OFWs by Major Group (1985-2000) Middle East Asia America Africa Europe Oceana Trust Territories

  12. OVERSEAS EMPLOYMENT • Provides temporary employment to Filipinos • Major generator of foreign exchange

  13. $6.8 B $290.85 M OFW Foreign Exchange Remittances (in million US$) (1985-2000)

  14. OFWs' REMITTANCES • Offset foreign exchange outflows • Country's saving grace during periods of negative GDP growth

  15. Contribution of Overseas Employment to GNP (1990-2000) (In %)

  16. Contribution of Overseas Employment (1990-2000)

  17. DEPLOYMENT AS SERVICE PROVIDERS

  18. Who are the International Service Providers (ISP)? • Sent by his/her employer to a foreign country to undertake a specific assignment for a restricted period of time  • Engaged in work that requires professional, commercial, technical or other highly specialized skills for a restricted period of time • Upon the request of his/her employer in the country of employment, engaged in work that is transitory or brief for a restricted and definite period of time (Garnier, 1996)

  19. Engage in : • Consulting Service • Training activities • Supervisory functions ISP NOT ISP • Seasonal and contract workers • Engage in manufacturing activities • Overseas Construction Contracting - skilled engineers - managers or supervisors - consultants

  20. MAIN TYPESOF SERVICE PROVIDERS A. Intra-company transferees B. Individual service providers and specialists on specific assignments C. Short term or business visitors D. Diplomatic and international personnel

  21. DEPLOYMENT LEVEL Number of newly hired workers as classified by the Philippines Overseas Employment Administration (POEA)

  22. Deployment of Land-based Newly Hired OFWs (1995-2000) Skills Category 1995 1996 1997 1998 1999 2000 2001 1. Professional and Technical Workers 43,629 36,055 51,381 55,456 62,500 78,685 97,448 346 305 572 385 333 284 385 2. Managerial Workers 3. Clerical Workers 3,435 3,169 3,632 2,897 2,552 2,367 3,356 4. Sales Workers 1,986 1,938 2,637 2,514 2,244 2,083 3,188 5. Service Workers 81,043 84,745 76,644 80,675 84,138 91,206 92,351 6. Agriculture Workers 981 822 546 388 452 526 550 7. Production Workers 82,537 75,683 85,829 75,078 79,662 57,807 56,740 8. Other Skills 200 3,074 0 1,822 5,379 20,072 4,186 Total (all skills) 214,157 205,791 221,241 219,215 237,260 253,030 258,204 Total (skills 1, 2, 3, 4, 5 & 8) 127,204 126,117 131,234 140,852 154,594 192,330 197,558

  23. Skill Destination Number Domestic Helpers And Related Household Workers Hong Kong 136,339 KSA 54,522 UAE 27,692 Taiwan 23,618 Kuwait 20,454 Malaysia 15,331 Singapore 7,919 Canada 6,133 Italy 6,093 Brunei 4,781 Choreagraphers and Dancers Japan 153,181 Hong Kong 145 Taiwan 16 Composers, Musicians and Singers Japan 53,989 Malaysia 257 Singapore 256 Electricians KSA 14,630 Hong Kong 1,085 Qatar 1,002 Waiters, Bartenders and related workers UAE 7,368 KSA 6,111 Bahrain 1,179 Kuwait 1,079 Source: Philippine Overseas Employment Administration Selected Top Skills Deployed (1995-2000)

  24. Profession Destination Number Nurses KSA 19,885 UK 4,118 Libya 1,488 Singapore 1,241 IT(Computer Programmers and related workers, Systems analysts) USA 2,730 KSA 1,358 Singapore 125 Australia 102 UAE 57 Accountants KSA 988 Northern Marianas Island 211 USA 180 Papua New Guinea 129 UAE 129 Engineers KSA 7,945 Source: Philippine Overseas Employment Administration Selected Professional Deployed (1995-2000)

  25. LENGTH OF STAY IN HOST COUNTRIES Middle East Workers : 2 years Japan Entertainers : not more than 6 months Taiwan Workers : 1 year

  26. DEPLOYMENT OF SEAFARERS Philippines as “Ship Manning Capital” representing 25% of world’s seaman population

  27. Top Ten Seafarer-Supplying Countries (as of 2000) Rank Country Officer Ratings TOTAL 1 Philippines 50,000 180,000 230,000 2 Indonesia 15,500 68,000 83,500 3 China (PRC) 34,197 47,820 82,017 4 Turkey 14,303 48,144 62,447 5 Russia 21,680 34,000 55,680 6 India 11,700 43,000 54,700 7 Ukraine 14,000 23,000 37,000 8 Greece 17,000 15,500 32,500 9 Japan 18,813 12,200 31,013 10 U.S.A.-Lakes 13,204 17,667 30,871 Source: ISF

  28. DEPLOYMENT OF SEAFARERS Inclusion in the International Maritime Organization (IMO) White list Filipino seafarers onboard ocean-going vessels constitute a large pool of skilled temporary service providers on a per year contract

  29. DEPLOYMENT AS TO TYPE OF MOVEMENT Total Number of Deployment * : Short-term Filipino service providers : 60,000 Intra-company transferees : 40,000 Long-term skilled migrants : 100,000 *Garnier / 1996

  30. Bulk of deployment in the Philippines are temporary migrant workers under seasonal and contractual arrangements and not much on intra-company transferees, individual service providers and specialists

  31. II. BARRIERSTO MOBILITY OF FILIPINOS UNDER MODE 4 (PRESENCEOF NATURAL PERSONS)

  32. MODE 1 :CROSS-BORDER SUPPLY Non-resident service suppliers to supply services cross- border into the Member’s territory MODE 2 : CONSUMPTION ABROAD Freedom for the Member’s residents to purchase services in the territory of another Member MODE 3 :COMMERCIAL PRESENCE Opportunities for foreign service supplier to establish, operate or expand a commercial presence in the Member’s territory MODE 4 : PRESENCE OF NATURAL PERSONS Entry and temporary stay of foreign nationals as service provider in their territory

  33. MODE 3 :COMMERCIAL PRESENCE Opportunities for foreign service supplier to establish, operate or expand a commercial presence in the Member’s territory MODE 4 :PRESENCE OF NATURAL PERSONS Entry and temporary stay of foreign nationals as service provider in their territory Mode 4 is strongly linked to Mode 3

  34. • All countries have restrictions that impedes or delay the movement of individuals • GATS agreement is aimed at dismantling the barriers

  35. BARRIERS OF THE PHILIPPINES UNDER MODE 4: 1. Those which are limited by the number and coverage of GATS commitments 2. Horizontal and sector-specific limitations on market access 3. Limitations imposed through requirements and procedures

  36. LIMITED GATS COVERAGE Philippines, like other developing countries, seeks to liberalize commitments in GATS under Mode 4 Developed countries are more cautious in their approach towards Mode 4 while seeking to dismantle the barriers in the other 3 modes

  37. LIMITED GATS COVERAGE Too much concentration on highly skilled labour and expertisethan less skilled labour Both developing and developed countries expect significant gains from GATS However, the hold-off stance of developed countries toward less skilled labour may inhibit success of GATS

  38. LIMITED GATS COVERAGE Under GATS, bulk of Commitment entries in developing countries consist of intra-corporate transferees (Mode 3) Local businesses in developing countries are hindered by lack of capital and investment to establish commercial presence through branch or subsidiary

  39. LIMITED GATS COVERAGE 17% of all horizontal entries may cover low-skilled persons in categories as vague as “business sellers”,“non-specified”, and “others” Construction and engineering services(labour-intensive export potential)are confined largely to intra-corporate transferees in highly skilled or managerial capacities

  40. LIMITED GATS COVERAGE Progress in Mode 4 commitments is reactive to developments Emphasis on high training and expertise on mobility of persons may be related to the expansion of world trade and growing role of intra-firm linkages Reflect the proliference of internal labour market within multinational firms as well as limited institutional frameworks for facilitating exchange of skills

  41. LIMITED GATS COVERAGE Growth of specialized service providers or professionals is a result of changing demographic patterns in certain developing countries The current Commitments under Mode 4 are only an extension of Commitments in Mode 3

  42. • Numerical limit to what is allowed (low number of quotas relating to “ordinary staff” and senior staff) • Intra-corporate type of movement tied to the pre- employment requirements (at least 1 year residency with the firm) QUOTA, PRE-EMPLOYMENTAND WAGE REQUIREMENTS Horizontal and Sectoral Commitments on Market Access • Domestic minimum wage legislation coupled with restriction on work condition, working hours and social security benefits

  43. Impediments: • Variation in the educational system of member- countries RECOGNITION REQUIREMENTSAND PROCEDURES Licensing and qualifications such as sufficient education, experience and training before being allowed entry • Variation in testing, certification and licensing requirements Because of these variations, service providers are given lower position, salary or benefits even if actual qualifications or skills are comparable

  44. • No agreed definition of what constitutes “temporary” and “standard” categories (90 days for business visitors or intra-corporate transferees / 2 to 5 years for other groups such as executives, managers and specialists) ADMINISTRATIVEBARRIERS Vague terminologies and definitions used in the Schedule of Commitments resulting to various interpretations • Need for predictability of actual entry condition particularly the economic needs or labor market test

  45. III. TOWARDS GREATER MOBILITY

  46. • Mode 4 Commitments should move its focus from highly trained and skilled service providers and must be de-linked to commercial presence • Mutual recognition schemes should be pursued even outside of GATS • Address closely the bottlenecks in market access Commitments • Give attention to the limitations on wages and regulations curtailing benefits under mandatory social insurance systems • Overcome administrative barriers

  47. CONCLUSION • Overseas deployment is an important contributor to the Philippine economy • The key element in expanding trade through Mode 4 is negotiations to reduce barriers and facilitate greater and freer cross-border flows of service providers • Only when a proactive and developmental approach to negotiations is adopted will the GATS agreement achieved its goal of distributing opportunities to all

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