REMARKS OF H.E. DOMINGO L. SIAZON, JR.
PHILIPPINE AMBASSADOR TO JAPAN
SYMPOSIUM ON MOVEMENT OF NATURAL PERSONS
MITA KAIGISHO, TOKYO, JAPAN
19 MARCH 2003
Acknowledgments
I wish to thank the Ministry of Foreign Affairs for organizing this symposium on the movement of natural persons. I am uncertain whether such a symposium had ever been contemplated before with the attendance of the various stakeholders of the MNP, but the presence today of experts both at the national and international levels from different persuasions from government, academe and the private sector should prove our discussions a rewarding one. Moreover, I wish to express the hope that at the end of our one-day session, new ideas and approaches would emerge to evolve a fresh understanding of the vast potential of the MNP in the services trade.
Recent economic history witnessed a heightened flow and dynamic movement of goods, capital, services and persons. We can attribute this to the rapid growth of our economic interdependence, the accompanying achievements brought by technology, and globalization. We also witnessed how the world attempted and continues to seek measures to manage the various challenges emerging from these dynamic movements through a satisfactory general framework of cooperation, which to date, remains elusive and unsettling for many at the WTO.
I recall that a few years back, many developing countries hesitated to include services trade under the ambit of the WTO, through the General Agreement on Trade in Services (GATS), Today, however, the number of countries are increasing to use the GATS mechanism to bring the services into an international framework of trades, disciplines and more importantly, liberalization. This is because trade in services has expanded considerably. For instance, world trade in services registered growth from US 826.1 Billion dollars in 1991 to US 1.458 trillion dollars in 2001.
We are all aware that GATS addresses trade liberalization in all four modes of supply for services, namely, cross-border supply, consumption abroad, commercial presence and the movement of natural persons. Regrettably, there is uneveness in the treatment of liberalization in the fourth mode- the movement of natural persons or the MNP. There were observations that the MNP is not given attention in the "liberalization scheme" because it only accounts for about 1.4% value of services trade, an indication that the gains from this sector is less promising. But I support those who advocate the view that the reason behind this low figure or statistic was due to the many barriers on the MNP, thus hampering its vast potential and contribution to the international economy.
The MNP is facing a number of obstacles in GATS, and the basic problem is quantifying these obstacles-which generally take the form of domestic regulations and administrative barriers. The Philippines perceives the following as barriers to MNP:
(a) Developed economies attached greater importance to liberalize sectors concentrating on highly skilled labor and expertise, like intra-company transferees, which are of limited interest to countries like the Philippines. For one, Philippine companies are hindered by lack of capital and investment to establish commercial presence through branch or subsidiary in many parts of the globe, unlike many American, European or Japanese companies. I personally believe that potential large returns would be feasible if medium and less skilled workers, which are relatively abundant in the Philippines, were allowed to move and provide their services in developed countries. It has been inferred that an increase in developed countries' quotas on the inward movements of both skilled and unskilled temporary workers to 3% of their work forces would generate an estimated increase in world welfare of over US$ 150 billion per annum.
(b) Licensing and qualification systems also pose additional entry barriers. This is complicated by the variation in the educational system of member-countries. For instance, completion of education up to tertiary level in the Philippines takes 14 years, while in other countries it takes 15 or 16 years. Variations in testing, certification and licensing requirements particularly for professionals and specialized skills also pose additional restriction. Because of these variations, entry of service providers becomes limited, or are given a different and lower treatment in terms of positions, salary or benefits received. The Philippines is not however totally closed to the idea of licensing and qualification systems, since we also understand the benefits of harmonizing and elevating standards to that of developed countries.
(c) Administrative barriers in the form of unilateral discretions and interpretations by immigration officials at ports of entry abound that makes the implementation and liberalization of MNP a slow process.
The Philippine Experience
It should not be a surprise that the Philippines finds itself advocating for greater liberalization of the MNP. The Philippines is one of the largest sources of overseas manpower in Asia, given its history of labor migration. In the first half of the 20th century, Filipino workers could be found in Hawaii, Guam and other neighboring countries working in pineapple plantations and farms. A formalized overseas employment program came into being in 1974 and huge deployments went to the Middle East and thereafter to many parts of the globe, including Japan. From just 36,035 in 1975, the number of Filipino overseas workers deployed abroad grew to 889,881 in 2002. A quick overview on the recent deployment of Filipino overseas workers abroad is summarized below: (GRAPH: DEPLOYMENT OF OFWS 1)
1. The 889,881 Filipino workers deployed in year 2002 represent a 2.6% increase over the deployment in 2001. (GRAPH: DEPLOYMENT OF OFWs 2) Land-based workers comprise 76% of the total deployment while seafarers constitute 24% in 2002.
2. (GRAPH: DEPLOYMENT OF NEWLY-HIRED OFWs in 2002 by Skills Category) Of the 680,288 land-based workers in 2002, 286,128 or 42% are new hires. 35% of the new hires deployed in 2002 (91,688) belong to the professional and technical workers skill category; 34% belong to the service workers group; 24% are production workers while the rest comprise administrative and managerial workers, clerical workers, sales workers and agricultural workers.
3. (GRAPH: TOP 10 DESTIONATIONS OF OFWs) Saudi Arabia is the number one destination of Filipino overseas workers, followed by Hongkong, Japan, United Arab Emirates, Taiwan, Singapore, Kuwait, Italy, United Kingdom and Brunei Darussalam.
4. (GRAPH: SUMMARY OF DEPLOYMENT FOR FILIPINO NURSES) The trends in the deployment of Filipino health care workers worldwide and emerging trends in the health services sector of countries such as Europe, North America and Asia point to an increasing demand for healthcare workers. A total of 43,320 professional nurses were deployed from 1997 to 2002 (January-October period). This is expected to further increase because of the aging populations of developed countries; the growing number of older and more acutely ill-hospitalized patients; the expanding opportunities for nurses in settings such as home care, outpatient, surgical centers, among others; and the high number of registered nurses retirement projected in the next 10 to 15 years.
5. (GRAPH: TOP 10 COUNTRIES EMPLOYING FILIPINO NURSES 2002) Of the land-based new hires deployed in 2002, Saudi Arabia was the number one market which recruited nurses (6,051), followed by the United Kingdom (3,081) and Ireland (930). Other top destinations that employed Philippine nurses are Libya, United Arab Emirates, Singapore, the United States, Taiwan and Kuwait. (GRAPH: TOP 10 COUNTRIES EMPLOYING FILIPINO DOCTORS) It may also interest the group to view the top ten countries employing Filipino doctors, (GRAPH: SUMMARY OF DEPLOYMENT FOR PHYSIOTHERAPISTS & OCCUPATIONAL THERAPISTS) physiotherapists and occupational therapists, which are flashed on the screen.
6. (GRAPH: SUMMARY OF DEPLOYMENT FOR FILIPINO IT PROFESSIONALS) For IT professionals, a total of 3,973 were deployed for the period 1997-2002 (January to October period). The deployment of IT workers has been decreasing for the last five years due to depressed economic conditions in host countries. (GRAPH: TOP 10 COUNTRIES EMPLOYING IT PROFESSIONALS 2002) Of the 225 new hires in the IT sector deployed in 2002, Saudi Arabia employed the biggest number at 151 workers, followed by the United States with 95. Other countries which employed IT professionals in 2002 are Singapore, Kuwait, Ireland, Malaysia, United Arab Emirates, Japan, New Zealand and the Northern Marianas Islands. Only 5 newly-hired IT professionals were deployed in Japan in 2002 (January -October period).
7. The Philippines is also considered the "Ship Manning Capital" of the world representing 25% of the world's seamen population. The demand for Filipino seafarers continues to grow, given that they are disciplined, organized, loyal, adaptable, English proficient and can withstand the rigors of the sea. Filipino seafarers on board ocean-going vessels are often acknowledged officers at the deck, engine and catering departments.
8. Finally, an important aspect that deserves mention here is that overseas employment not only provides work to Filipino job-seekers, it is also a major source of foreign exchange. The remittances of overseas Filipino workers are helping the Philippine economy offset foreign exchange outflows. From 1991 to 2001, Filipino overseas workers remitted a total of some US$ 50 billion through the formal banking system. (GRAPH: OFW REMITTANCE) In 2001 remittances from the overseas Filipino workers were valued at US$ 4.4 billion and in 2002 remittances were recorded to reach US $ 5.4 billion.
The Philippines has entered into bilateral, regional and multilateral arrangements to facilitate the promotion of labor mobility. The Philippines had concluded bilateral labor agreements with several markets employing Philippine workers. These agreements basically govern the entry of Filipino workers into their countries and ensure their welfare as well. They cover mutually acceptable terms and conditions of employment, recruitment and grievance procedures or social security benefits. It can also define agreements in the exchange of manpower and training.
To date, the Philippine Government has labor agreements with the Commonwealth of Northern Marianas Islands, Iraq, Jordan, Libya, Qatar, Kuwait, Papua New Guinea, Norway, United Kingdom, Switzerland and Indonesia. The bilateral agreement with Indonesia signed in January 2003 is quite unique in the sense that it is also a labor sending country like the Philippines. The joint cooperation between the two countries covers the promotion and protection of welfare rights of migrant workers; training and certification of migrant workers; and provision of legal aids for the protection of migrant workers' rights.
In Japan, acceptance of foreign labor is low. The percentage of foreign workers in Japan is a paltry 0.2%, compared to other G-7 countries: United States- 11.7%; Canada- 19.2%, France-5.8%, Germany -8.8% and Italy-3.6%
There are about 180,000 Filipinos in Japan excluding some 20,000 Filipino seafarers in Japanese vessels. 74,000 work in the entertainment industry and 107 are registered working as civil engineers, architects, designers, system engineer programmers, chefs, confectionary workers animal and boxing trainors. From 1992 to 2000, intermarriages between Japanese and Filipinos is estimated at 58,694.
The Philippines notes the positive labor environment for Philippine entertainers and seafarers. We are also making gains in the IT sector, and looks forward to further cooperation in this area. The Philippines is interested however to tap the potential of liberalizing the entry of Philippine health care givers in this country, and we hope that Japan will consider this proposal seriously.
According to statistics, the number of people aged over 65 will sharply increase by around year 2010 and those between 19 and 65 are expected to account for 47% of the total population by 2017. Furthermore, Japan's working population is projected to fall by as many as 6.1 million from the current level by 2025. The International Institute for Management Development in Switzerland reported that Japan now ranks 30th- a record low on its world competitiveness scoreboard.
In a speech in late November 2002, Mr. Hiroshi Okuda, Chairman of the Japan Business Federation (Nippon Keidanren), the country's top business organization, referred to the use of foreign workers as a potentially effective measure to cope with the aging society and the falling birthrates in Japan. This was not the first time we heard this sentiment.
Twelve years earlier, in May 1990, the Japan Food Service Association clamored for a proposal to accept foreign workers and to build public consensus to employ them. This association realizes the repercussions in the catering industry in Japan of an ageing and advancing society. They claim that "mechanization of the domestic catering industry has almost reached the point where only human hands could fill in the gap left as a result". Moreover, the rationalization of the catering industry as well has reached the limit, resulting in higher wages, an inflationary factor. The labor shortage in the catering industry impeded expansion of business, and as a result some stores have been forced out of business. I believe we have learned lessons from the story of the Japanese food and catering industry. The sectors on health care giving and information technology hold promise and mutual benefit for both countries.
The Philippines has a strong and long tradition of sending nurses overseas, with primary destination to the United States. At the moment, Filipino nurses, therapists and health care givers are now in great demand in the United States and Europe, particularly in the United Kingdom and Germany. Because of increasing demands worldwide, even Filipino doctors today are studying nursing to give them additional edge. (GRAPH: DEPLOYMENT OF HEALTH CARE GIVING SECTOR FOR 2001) In 2001, the Philippine Overseas Employment Administration deployed 13,536 professional nurses, 285 nursing personnel and 334 physiotherapists and occupational therapists.
I also wish to state that the four- year requirement imposed by Philippine institutions for students to earn a bachelor's degree is certainly an advantage. The Philippine four-year curriculum for a bachelor degree in nursing is a combination of competency-based and community oriented courses, offering more than what a skills-based curriculum does. It includes a two-year general education program grounded in liberal arts that strengthens the character and values of a person as a caregiver, thereby giving an advantage over a purely skilled worker. Moreover, the medium of instruction in the local institutions, English, not only prepares students for licensure examinations, both nationally and internationally, but also gives them access to the ever growing literature in health sciences.
Of course, within the Japanese setting, there is a need to learn the Japanese language and the health care system in this country. It was reported that Japan is in need of 30,000 nurses. The Association of Supporting Care Service Management or the NIHON KAIGO SHIEN KYOKAI is interested in employing foreign health care workers, but considering the present restrictions in Japan, it is exploring acceptance of trainees initially from the Philippines and Indonesia among others. It pleases me that the Philippines and Japan are informally discussing a feasibility study for a possible Japanese language-training center in the Philippines for potential health care givers in Japan.
Expectations from Japan and Philippine Recommendations
I will be more candid in outlining some of our expectations from Japan to promote MNP. There is a serious concern from the Philippine end that the rules of GATS explicitly exclude the matter of movement of natural persons seeking employment abroad. Moreover, the Philippines believes that to hasten liberalization of the MNP, measures could be done at the bilateral and regional level.
Prime Minister Koizumi made a bold decision to establish the Japan-ASEAN Comprehensive Economic Partnership Agreement. ASEAN's comparative advantage clearly lies on its youthful human resources, whose potential contribution to the regional economy could be shared, if only an enabling environment and an open regime for their mobility are created. ASEAN supported the Koizumi proposal because we believe that an ASEAN-Japan Comprehensive Economic Partnership Agreement would establish the foundation for a future East Asian integrated market that would evolve into an East Asian Community. We had therefore clearly stated that the proposed Philippine-Japan Economic Partnership Agreement (JPEPA) should cover not only an FTA but also a framework for human resource development and labor mobility, which we describe as our "plus alphas". The Philippines therefore hopes that the free mobility of people would be an important component of the proposed JPEPA. We should consider that people are the prime movers of our end goal to create an East Asia community of nations.
In the meantime, some practical measures could be jointly undertaken .For instance, the Philippines is prepared to consider some form of training and testing that would allow the entry of health care givers in Japan. This is not something new. Philippine seafarers pass a qualifying examination to work for Japanese ships. In 2001, the Philippines and Japan signed an MOU that allows qualifying examinations for IT workers to enable them to work for companies in Japan engaged in this industry. There is therefore a possibility to do the same in the health-care giving sector.
Finally, Japan should look at the potentials of not only skilled but also unskilled workers for the economy. As the Japanese catering industry illustrates, there comes a point when only manual, human labor could fill in the gap, which many Japanese, given their high skills, are not prepared to undertake- and yet, Filipinos are more than willing to take these roles for them.
If we all truly believe in an open and liberalized trading regime-we should have an enlightened view that mode 4- the Movement of Natural Persons, in fact, is an instrument to foster efficiency, competition and comparative advantage-all ideal features of prosperous and thriving economies and a necessary ingredient for ensuring political stability and security in East Asia. Thank you.
Back to Index