Beginning 2016, professionals from ASEAN countries will have greater mobility to work within the ASEAN Economic Community (AEC). While experts do not foresee massive displacement of Filipino workers, they warn of a “skills challenge” that needs to be addressed through a strengthened educational system and professional regulation.

The Philippines as labor recipient

The entry of foreign professionals actually presents advantages for the Philippine labor market, according to Director Dominique Tutay of DOLE’s Bureau of Local Employment. She said foreigners bring new technologies and management systems that would raise professional standards, especially in the education and information technology (IT) sectors.

“When entry of foreign nationals is restricted, acquisition of knowledge also becomes limited. To eliminate intellectual inbreeding, we need to attract foreign professors who can teach post-graduate studies. We also noticed that applications for alien employment permits are mostly in IT, since companies claim there is an absence of Filipino specialists,” she said.

AEC blueprint.png

Entry of foreign professionals is currently prohibited by Philippine laws without a special permit to practice profession or unless allowed by reciprocity clause. The ASEAN Mutual Recognition Arrangements (MRAs), however, allow freer movement of professionals by standardizing regulations and procedures for employment.

So far, the ASEAN countries have signed MRAs for seven professions (see infographics below on “Qualifications for mutual recognition of ASEAN professionals”).

Tutay did not totally discount the possible displacement of local workers, but she said there may only be a few affected workers because Filipinos are highly competitive.

“Services of foreign professionals are usually needed if their skills are not locally available. If some companies hire them even if there are Filipino talents, this might engender ill feelings and negative reaction from local practitioners,” said Tutay.

The Philippines as labor sender

Experts from the Philippine Institute for Development Studies (PIDS), however, noted that the Philippines is not a labor recipient but a sender of mostly unskilled workers.

“Migration to other countries is not dominated by professionals and our MRAs cover only seven professions,” said PIDS Research Fellow Aniceto Orbeta.

PIDS President Gilberto Llanto said that countries with aging populations, like Thailand, will welcome workers from sending countries, like the Philippines, and this will benefit the latter through remittances.

“But in the future, this can be reversed. With sustained economic growth and strengthened manufacturing and services, Filipino workers may choose to stay in the country,” said Llanto.

MRA-Infographic-resized-rev2

 

‘Skills challenge’ and social protection

With the expected technological and production shifts in regional integration, PIDS Research Fellow Ramonette Serafica said Filipino workers will face a “skills challenge.”

“Across all industries, shortage of applicants with the right competencies is the biggest recruitment challenge by our domestic employers. The policy response should always be to ensure that local workers have the right skills set,” said Serafica.

Tutay agreed, saying that education and training institutions need to revise their curricula to adjust to the labor market demand not only within the country but of the ASEAN.

The labor official cited the following initiatives that will prepare the labor market:

• Skilled Occupational Shortage List (SOSL), a “positive list” of occupations with short supply of local workers and where entry of foreign experts are crucial, as identified by industry and labor groups, and the government;

• Philippine Qualifications Framework (PQF), a national policy that harmonizes the needed qualifications and procedures in employing foreign professionals, in line with the ASEAN Qualifications Reference Framework (AQRF);

• Philippine Services Coalition (PSC), a multisectoral working group revived to develop and implement a strategy for promoting Philippine services in the global markets; and

• Pending legislation that liberalizes the entry of foreign professionals.

Even with strengthened educational system and professional regulations, there are still workers who are not equipped for the competitive labor market. “They are easily laid off, bypassed, or trapped in low-paying jobs. In this respect, social protection schemes will be necessary to temper market aberrations,” Llanto said.

Tutay said safety net programs are already in place for Filipinos affected by the integration. However, Orbeta said that the transferability of social protection from one country to another still has to be discussed in ASEAN.

“Besides transfer of financing, the bigger issue is what is creditable,” said Orbeta, referring to social insurance contributions that can be credited to the worker across the region.

While it is not in the AEC Blueprint, establishing a network of social protection agencies for those affected by regional integration is an action item in the ASEAN Socio-cultural Community (ASSC) Blueprint. A committee currently drafts the instrument that recognizes the obligation of both sending and receiving countries in protecting migrant workers’ rights.

Serafica emphasized that not all benefits are automatic with the integration of labor market in ASEAN. “We should continue to invest in training and education to address the country’s present and future skills challenge,” she said.

 

Click here to download a PDF copy of the NEDA DevPulse Vol. 17 No. 1 2nd Semester 2014 issue.