Senate President Pro Tempore Ralph Recto is asking President Aquino to tap the P2.5-billion Palace contingent fund for “safety nets and retraining” of overseas Filipino workers (OFWs) facing massive displacement due to the sharp steady drop of oil prices in the Middle East.
In a news statement, the senator cited 1.5 million temporary Filipino workers in the Middle East oil belt, adding that the Aquino administration officials believe that they would be the first to be laid off when the region’s oil industry sheds personnel due to plummeting oil receipts and production overcapacity.
Recto raised concern over the possible repatriation of OFWs displaced by plummeting oil prices which was not factored in the preparation of the 2016 national budget. He noted this “left a huge funding hole on how to shoehorn their reentry into the Philippine job market.”
“This is one macroeconomic assumption which the current budget missed,” Recto said. “In fact, the budget, which will be financed, in part, by taxes on imported oil, was based on an oil-price forecast of $55 to $75 a barrel for 2016,” Recto said.
Oil prices have sunk to below $30 a barrel, the lowest level in 12 years. Despite the lack of specific funding for “returning cheap-oil refugees” in the P3-trillion spending package, “there are, however, contingent sources of funds for safety nets and retraining,” Recto said.
According to Recto, “There’s the P2.5-billion contingent fund under the President’s discretion.” He added that tapping the fund “is guided by the provision that it can be used for an urgent activity that needs to be implemented this year.”
At the same time, Recto recommended another possible source: the P67.5-billion unprogrammed fund (UF) that, he said, can be only drawn if specific or general revenue collection for the year exceeds target.
“What is funny is that, while the language of this fund reserves P30 billion of it for contingent liabilities of public-private partnership [PPP] projects, not a single centavo is earmarked for displaced OFWs,” the senator said.
Recto added that the UF also sets aside P10 billion for AFP modernization, but the government missed allocating something for projects that “will arm returning OFWs with skills,” Recto said.
“Given this unforeseen event,” he suggested that the budget of the Department of Labor and Employment (DOLE) and the Technical Education and Skills Development Authority (Tesda) for the retraining of OFWs will have to be augmented.
He noted that the Tesda, the state technical-vocational training arm, has a gross budget of P5.4 billion this year. The DOLE, on the other hand, has a “measly P50 million for OFW repatriation,” while its grassroots livelihood projects for OFWs and their families under the Bottom-Up Budgeting scheme, has a budget of P444 million this year.
“OWWA [Overseas Workers’ Welfare Administration] can help, but if you look at its finances, it won’t be enough to provide for the transition program of OFWs in the hundreds of thousands,” Recto said. “I think what the government should do is to create an OFW assistance fund, to be sourced from both the regular budget and off-budget sources, including from the financial sector of the government corporate sector,” Recto said.
At the same time, he prodded the government’s financial managers to assess this early the impact of the simultaneous dip in oil prices and OFW remittances to government spending.“The budget is sensitive to these two dashboard indicators. These two will definitely move the needle negatively,” he said.
For instance, Recto said, a one-percentage-point growth in the economy, which relies on OFW remittances as a growth driver, will up revenues by P21.6 billion.
He estimated that OFWs in Saudi Arabia sent home $2.4 billion from January to November last year, or 10.5 percent of the $22.8-billion recorded cash remittances during the 11-month period. Filipinos in the United Arab Emirates sent $1.58 billion in cash remittances, or 6.9 percent of total, during the same period.