JOSEPHINE J. FRANCISCO Philippines
Mar 27, 2015
JOSEPHINE J. FRANCISCOPhilippines
GENERAL AGREEMENT ON TRADE IN SERVICES
(GATS)
GENERAL AGREEMENT ON TRADE IN SERVICES
(GATS)
Provides a framework for temporary stay of people in other countries for the purpose of providing services
CHALLENGE FOR THE PHILIPPINES CHALLENGE FOR THE PHILIPPINES
• Take advantage of the opportunities• Take advantage of the opportunities
• Untangle from existing institutional barriers to liberalization of movements of temporary migrants
• Untangle from existing institutional barriers to liberalization of movements of temporary migrants
I. Trends in overseas employment, its economic contribution and composition of Filipino service providers
I. Trends in overseas employment, its economic contribution and composition of Filipino service providers
II. Barriers to free movement of migrants, particularly Filipinos
II. Barriers to free movement of migrants, particularly Filipinos
I. TRENDS IN OVERSEAS TEMPORARY MIGRATION EMPLOYMENT
I. TRENDS IN OVERSEAS TEMPORARY MIGRATION EMPLOYMENT
Labor migration is not a new phenomenon among Filipinos
OVERSEAS EMPLOYMENT PROGRAM (1974)
OVERSEAS EMPLOYMENT PROGRAM (1974)
• Serves as a temporary measure to ease the tight domestic labor market• Serves as a temporary measure to ease the tight domestic labor market
• Serves as an alternative employment strategy for Filipinos• Serves as an alternative employment strategy for Filipinos
• Stabilizes the country’s balance-of-payment position• Stabilizes the country’s balance-of-payment position
OVERSEAS DEPLOYMENT IN GENERALOVERSEAS DEPLOYMENT IN GENERAL
36,035
733,995
660,122
841,438
389,200
662,294
740,154
791,989755,350
667,669372,784
654,022
747,696
831,643
837,020
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1975 1985 1995 n.a 1997 1998 1999 2000
Workers Processed Workers Deployed
Processed and Deployed OFW’sProcessed and Deployed OFW’s
559,227
320,497
643,304640,331
638,343
484,653372,784
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1985 1995 1996 1997 1998 1999 2000
Deployed Landbased OFWs
1995 - 20005.32% annually
1997 - 199811 to 14%
1999 - 2000less than 1%
52,290
198,134
196,689193,300188,469
175,469165,401
0
50,000
100,000
150,000
200,000
250,000
1985 1995 1996 1997 1998 1999 2000
Seabased
Deployed Seabased OFWs
1995-200025%
1995-200025%
0
50,000
100,000
150,000
200,000
250,000
300,000
Deployed Land-based OFWs by Major Group (1985-2000)
1995 – 200048%1995 – 2000
(44%)
OVERSEAS EMPLOYMENT OVERSEAS EMPLOYMENT
• Provides temporary employment to Filipinos
• Major generator of foreign exchange
893.4
4,055.00
4,651.44
5,123.77
926.68
5,948.34
5,484.22
4,667.00
597.89208.84 846.21
274.55
257.61251.24287.6789.31
82.01210.51
0
1000
2000
3000
4000
5000
6000
7000
1978 1985 1990 1995 1996 1997 1998 1999 2000
Land-based
Sea-based
OFW Foreign Exchange Remittances (in million US$)(1985-2000)
$290.85 M
$6.8 B
OFWs' REMITTANCESOFWs' REMITTANCES
• Offset foreign exchange outflows
• Country's saving grace during periods of negative GDP growth
14.43
16.9718.01
19.6
21.81
27.96
20.66
22.76
16.7
19.39
15.66
2.67 3.29 3.264.08 4.13
6.374.92
6.69 7.168.42
7.5
0
5
10
15
20
25
30
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Remittances (%) of Exports Remittances (%) of GNP
Contribution of Overseas Employment to GNP (1990-2000)(In %)
Contribution of Overseas Employment (1990-2000)
1.272.4
4.213.6
0.1
5.2
6.95.55.26
2.62
0.34
3.67
3.93.23
- 0.54
5.43
5.484.764.39
2.12
1.57
- 1.02
-5
0
5
10
15
20
25
30
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Remittances (%) of Exports Remittances (%) of GNP GNP Growth Rate GDP Growth Rate
DEPLOYMENT AS SERVICE PROVIDERS
DEPLOYMENT AS SERVICE PROVIDERS
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)
ISPISP NOT ISPNOT ISPEngage in :
• Consulting Service
• Training activities
• Supervisory functions
• Overseas Construction Contracting
- skilled engineers- managers or supervisors- consultants
• Seasonal and contract workers
• Engage in manufacturing activities
D. Diplomatic and international personnelD. Diplomatic and international personnel
C. Short term or business visitorsC. Short term or business visitors
A. Intra-company transfereesA. Intra-company transferees
B. Individual service providers and specialists on specific assignments
B. Individual service providers and specialists on specific assignments
MAIN TYPES OF SERVICE PROVIDERS MAIN TYPES OF SERVICE PROVIDERS
DEPLOYMENT LEVEL DEPLOYMENT LEVEL
Number of newly hired workers as classifiedby the
Philippines Overseas Employment Administration (POEA)
Deployment of Land-based Newly Hired OFWs (1995-2000)
1. Professional and Technical Workers
2. Managerial Workers3. Clerical Workers
4. Sales Workers5. Service Workers
6. Agriculture Workers
7. Production Workers
8. Other Skills
Total (all skills)
Total (skills 1, 2, 3, 4, 5 & 8)
43,629 36,055 51,381 55,456 78,685 97,448
346 305 572 385 284 385
3,435 3,169 3,632 2,897 2,367 3,356
1,986 1,938 2,637 2,514 2,083 3,18881,043 84,745 76,644 80,675 91,206 92,351
981 822 546 388 526 550
82,537 75,683 85,829 75,078 57,807 56,740
200 3,074 0 1,822 20,072 4,186
214,157 205,791 221,241 219,215 253,030 258,204
127,204 126,117 131,234 140,852 192,330 197,558
Skills Category 1995 1996 1997 1998 1999 20012000
62,500
333
2,552
2,24484,138
452
79,662
5,379
237,260
154,594
Selected Top Skills Deployed (1995-2000)
Skill Destination NumberDomestic HelpersAnd RelatedHousehold Workers
Hong Kong 136,339KSA 54,522UAE 27,692
Taiwan 23,618Kuwait 20,454
Malaysia 15,331Singapore 7,919
Canada 6,133
Brunei6,0934,781
Italy
Choreagraphers and Dancers
Japan145Hong Kong
153,181
Taiwan 16
Japan 53,989Composers, Musicians andSingers Malaysia 257
Singapore 256
KSA 14,630ElectriciansHong Kong 1,085
Qatar 1,002
Source: Philippine Overseas Employment Administration
UAE 7,368Waiters, Bartenders and related workers KSA 6,111
Bahrain 1,179Kuwait 1,079
Selected Professional Deployed (1995-2000)
Profession Destination NumberNurses KSA 19,885
UK 4,118Libya 1,488
Singapore 1,241
IT(Computer Programmers and related workers, Systems analysts)
USA 2,730KSA 1,358
Singapore 125Australia 102
57UAE
Accountants KSA 988Northern Marianas Island 211
USA 180Papua New Guinea 129
UAE 129
Engineers KSA 7,945Source: Philippine Overseas Employment Administration
LENGTH OF STAY IN HOST COUNTRIES
LENGTH OF STAY IN HOST COUNTRIES
Middle East Workers : 2 yearsJapan Entertainers : not more than 6 monthsTaiwan Workers : 1 year
DEPLOYMENT OF SEAFARERSDEPLOYMENT OF SEAFARERS
Philippines as “Ship Manning Capital”representing 25% of
world’s seaman population
Philippines as “Ship Manning Capital”representing 25% of
world’s seaman population
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
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
Top Ten Seafarer-Supplying CountriesTop Ten Seafarer-Supplying Countries(as of 2000)(as of 2000)
DEPLOYMENT OF SEAFARERSDEPLOYMENT 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
DEPLOYMENT AS TO TYPE OF MOVEMENT
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
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
II. BARRIERS TO MOBILITY OF FILIPINOS UNDER MODE 4 (PRESENCE OF NATURAL PERSONS)
II. BARRIERS TO MOBILITY OF FILIPINOS UNDER MODE 4 (PRESENCE OF NATURAL PERSONS)
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
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 3Mode 4 is strongly linked to Mode 3
• All countries have restrictions that impedes or delay the movement of individuals
• GATS agreement is aimed at dismantling the barriers
BARRIERS OF THE PHILIPPINES UNDER MODE 4: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 marketaccess
3. Limitations imposed through requirements and procedures
LIMITED GATS COVERAGELIMITED 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
LIMITED GATS COVERAGELIMITED GATS COVERAGE
Too much concentration on highly skilled labour and expertise than 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
LIMITED GATS COVERAGELIMITED GATS COVERAGE
Local businesses in developing countries are hindered by lack of capital and investment to establish commercial presence through branch or subsidiary
Under GATS, bulk of Commitment entries in developing countries consist of intra-corporate transferees (Mode 3)
LIMITED GATS COVERAGELIMITED 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
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
LIMITED GATS COVERAGELIMITED GATS COVERAGE
LIMITED GATS COVERAGELIMITED 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
QUOTA, PRE-EMPLOYMENT AND WAGE
REQUIREMENTS
QUOTA, PRE-EMPLOYMENT AND 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
• Domestic minimum wage legislation coupled with restriction on work condition, working hours and social security benefits
• Numerical limit to what is allowed • 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• Intra-corporate type of movement tied to the pre-employment requirements
(at least 1 year residency with the firm)
RECOGNITION REQUIREMENTS AND PROCEDURES
RECOGNITION REQUIREMENTS AND PROCEDURES
Licensing and qualifications such as sufficient education, experience and training before being allowed entry
• Variation in testing, certification and licensing requirements
• 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
• Variation in the educational system of member-countries• Variation in the educational system of member-countries
Impediments:Impediments:
ADMINISTRATIVE BARRIERSADMINISTRATIVE BARRIERS
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
• 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)
III. TOWARDS GREATER MOBILITYIII. TOWARDS GREATER MOBILITY
• 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
• Overseas deployment is an important contributor to the Philippine economy
CONCLUSION
• 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