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Foreign-owned recruitment agencies dominate HSW market over local agencies

The increasing foreign- owned recruitment agencies with Arabic names has put local owned agencies in a disadvantage in the competition for the Household Service Workers market or domestic workers as they care commonly known all over the world.

More than 100 Foreign Recruitment Agencies (FRAs) have qualified for the white list drawn the Employment Branch of the newly created Department of Migrant Workers (DMW) Department and these FRAs have their counterparts in the country mostly foreign owned agencies that have grown in large numbers.

According to recruitment consultant Manny Geslani, the DMW and Saudi Arabia agreed to draw up guidelines and rules for the participation of agencies in the Saudi labor market through a white and black list that ensure the protection and welfare of OFWs. A standard employment contract was also drawn up specifically for the HSWs agencies and Mega recruitment companies that include insurance for the workers.

The presence of the foreign-owned agencies have been alarming that as early as 2018 a DOLE official had called for an investigation of the agencies which have been crowding out the business of locally owned agencies.

In 2018 former Labor Undersecretary Jacinto V. Paras said that Dole would investigate licenses of recruitment agencies that are partly owned by foreigners, to monitor compliance with the 25% cap on foreign ownership set out in the 10th Foreign Investment Negative List issued by the previous government in 2015 and left unchanged in the 11th FINL issued in October.

“We’ll be looking at license holders, especially those whose stockholders and incorporators are foreigners,” he said.

The highly lucrative market for domestic workers for the Middle East has attracted many foreigners to establish offices for the purpose of securing licenses from the Philippine Overseas Employment Administration using Filipino dummies in either as single proprietorships or corporations. Most of these foreign owned and Arab sounding agencies are controlled by foreigners’ using Filipino dummies and their participation in the corporations is limited to only 25% ownership in the corporation.

Under the current 2016 POEA Rules and Regulations these foreigners are not allowed to hold management positions but in reality they are the ones actively running the agencies.

Their ease in speaking the Arabic language allows them to easily capture many Arab employers in contrast to the local Filipino owned agencies.

Geslani urged DMW Secretary Susana “Toots” Ople to look into these growing numbers of foreign owned agencies that have captured most of the HSW labor market.

Itchie G. Cabayan
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