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Middle East hiring freeze stings the Philippines

As part of a preemptive move to avoid major protests, Saudi rulers have tried to tackle domestic unemployment by trimming the number of foreign workers in the country where more than 1.3 million Filipinos live and work.

By Correspondent / July 26, 2011



Morong, Philippines

Halfway around the world from Egypt and Libya, the Arab Spring is even reverberating in small-town Philippines. Many families here depend on wages sent back from wealthier countries, including the Middle East, which accounted for nearly half of new overseas jobs in 2010.

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So far, job losses have been concentrated in Libya, which employed around 23,000 Filipinos before war erupted in February. A far greater worry is the prospect of cutbacks in Saudi Arabia, where more than 1.3 million Filipinos live and work, the largest overseas community after the US. Their wages helped bump up total remittances last year to a record $18.7 billion.

While Saudi rulers haven’t faced sustained protests, they’ve tried to tackle domestic unemployment by capping the number of foreign workers that companies can hire in what some observers have described as part of a preemptive move amid turmoil in the region. This could have a major effect in the Philippines, which is the fourth-largest supplier of workers after Pakistan, India, and Egypt.

In Manila, recruitment agencies are still posting Saudi jobs that run the gamut from civil engineers to nutritionists, waiters, and bellhops. But agencies say they expect fewer contract renewals, particularly at small companies, as a result of so-called Saudization of the workplace.

In addition, more experienced workers are returning home to the Philippines, leaving a gap in the market, says Loreto Soriano, who runs a recruitment company and worked in Saudi in the 1980s. “The pressure is building from both sides,” he says.

Rights of domestic servants in question

A separate row between the Philippines and Saudi Arabia over the rights of domestic servants has had a more immediate impact.

In June the Saudi government said it would stop issuing permits to maids from both the Philippines and Indonesia, which had protested over the beheading of an Indonesian maid convicted of murdering her employer’s wife. Human rights groups say female servants are more vulnerable to abuse than workers in factories and offices.

Philippine officials have demanded that Saudi employers guarantee a minimum monthly wage of $400 to servants as well as improve conditions. Since March, Saudi negotiators have refused to accept the wage demand, says Carlos Cao, the head of the Philippine Overseas Employment Agency (POEA). But he predicted that a compromise would be reached.

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