symp apr 02 francisco e

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JOSEPHINE J. FRANCISCO Philippines

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

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• Untangle from existing institutional barriers to liberalization of movements of temporary migrants

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

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

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

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OVERSEAS DEPLOYMENT IN GENERAL

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Processed and Deployed OFW’s

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Deployed Landbased OFWs

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Deployed Seabased OFWs

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Deployed Land-based OFWs by Major Group (1985-2000)

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

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OFW Foreign Exchange Remittances (in million US$) (1985-2000)

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

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

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Contribution of Overseas Employment (1990-2000)

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DEPLOYMENT AS SERVICE PROVIDERS

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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)

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ISP NOT ISP • Overseas Construction Contracting - skilled engineers - managers or supervisors - consultants • Seasonal and contract workers • Engage in manufacturing activities

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

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

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Deployment of Land-based Newly Hired OFWs (1995-2000) 1. Professional and Technical Workers 2. Managerial Workers 3. Clerical Workers 4. Sales Workers 5. 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 3,188 81,043 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 2001 2000 62,500 333 2,552 2,244 84,138 452 79,662 5,379 237,260 154,594

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Selected Top Skills Deployed (1995-2000)

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Selected Professional Deployed (1995-2000)

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

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

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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 Countries (as of 2000)

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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

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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

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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

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II. BARRIERS TO MOBILITY OF FILIPINOS UNDER MODE 4 (PRESENCE OF NATURAL PERSONS)

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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

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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

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

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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

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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

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LIMITED 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

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LIMITED 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)

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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

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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 COVERAGE

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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

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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

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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 Because of these variations, service providers are given lower position, salary or benefits even if actual qualifications or skills are comparable

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ADMINISTRATIVE 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

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III. TOWARDS GREATER MOBILITY

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• 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

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• 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