News: Payroll system for OFW remittances opposed

MANILA, Philippines – Some leaders of overseas Filipino
workers’ groups frowned on the proposed return to the Marcos-era
payroll system in sending remittances which compels migrant workers
to directly remit up to 70 percent of their monthly salary through
the banking channels.

Edgar Cadano, secretary general of Riyadh-based group Kapatiran sa
Gitnang Silangan (KGS), deemed the system as very dictatorial, saying
it is tantamount to “stealing” from OFWs the right to decide on how
to spend their money.

Instead of automatically remitting up to 70 percent of their salaries
back home, Cadano proposed that a “free remittance system” be

“This should not be too difficult to develop by concerned government
and private agencies with the modern communication technology
available at present. Capitalists should no longer gain profit from
sending our money back home after everything has been sweat out of
our labor in the global market,” Cadano said in a statement on Monday.

Private recruiter Lito Soriano, president of LBS E-Recruitment
Solutions, proposed the revival of the pay-rolling system and
asserted that it will dramatically reduce the costs of remittance,
while increasing and speeding up the flow of remittances into the
local banking sector.

According to the Asia Pacific Forum on Women, Law and Development,
then President Ferdinand Marcos signed into law Executive Order 857
(Forced Remittance Law) in the early `80s, which required migrant
workers to remit 70 percent (for land-based migrant workers) and 100
percent (for sea-based migrant workers) of their earnings through the
legal banking channels.

Migrant workers failing to surrender the mandated percentage of their
salaries back home faced sanctions such as losing their rights to
renew their contracts and passports and banning them from the list of
eligible workers for overseas employment.

Using non-banking channels such as “padala” system was strictly

The order was greeted with widespread protests in the Middle East,
Hong Kong, Japan and Europe. A coordinated campaign was launched
between migrant-related groups inside and outside the Philippines
which resulted in the suspension of the EO.

Cadano explained that the real issue faced by OFWs in the midst of
the continued appreciation of the peso against the dollar is the
price increases of basic commodities back home such as food, which
further depreciate the value of their remitted money.

“Gas and oil and transportation costs are all going up while our
incomes are being squeezed with the unfavorable exchange rate against
a growing inflation rate being experience in our host countries,” he

Migrante-Middle East regional coordinator John Leonard Monterona saw
the pay-rolling system as a sure failure especially among Arab
employers who are not keen on spending extra time to arrange for the
remittance of an OFW’s salary.

Remittance centers, which are non-banking channels, would also not
approve of the system as it would translate to a loss to their income.

“For Mr. Soriano’s information, it is not the attitude of foreign
employers, especially Arab employers, to spend time arranging for the
sending of its employed OFW’s salary. Likewise, remittance centers
and banks abroad would not surely agree to what he said as ‘one-time
charge’ to be collected from foreign employers. For them, it should
be business as usual. More OFW-remitters means more charges it can
collect,” Monterona said.

“The intent of Mr. Soriano’s proposal is highly dubious as it gives
leeway to recruitment agencies for possible misuse of OFWs’
salaries,” he added.

According to Monterona, recruitment agencies could take advantage of
the remitted money such as withdrawing and re-depositing the amount
and “take advantage of the volatile dollar-peso exchange rates.”

“Implementing the ‘pay-rolling’ system is like ‘using OFWs money’ for
profit of unscrupulous recruitment agencies; we are not surprised
that this absurd proposal is being proposed by a recruiter who is
earning a lot from OFWs,” he said.

– Mark J. Ubalde, GMANews.TV


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