Dubai crisis to cost RP $300 million in remittances

MANILA, Philippines – The country faces as much as a $300-million drop in remittances from overseas Filipino workers (OFWs) due to the debt crisis in Dubai, the country’s largest labor group warned yesterday.

The Trade Union Congress of the Philippines (TUCP) said the Philippines could lose one-half of remittances coming from Dubai as a result of the financial crisis in the area.

“All of Dubai’s state-owned companies, the biggest employers there, will surely be forced to restructure, mainly through job cuts,” TUCP secretary general and former Senator Ernesto Herrera said.

Herrera said Filipino workers in Dubai’s construction, real estate, financial services, retail, trade, and travel and tourism industries could be among those hardest hit by the job losses.

After Saudi Arabia, Herrera said the United Arab Emirates (UAE) is the second biggest source of remittances from Filipino workers in the Middle East.

He said annual remittance from the UAE is estimated at $632 million, accounting for almost 25 percent of all remittances from Filipino workers in the Middle East.

Citing Bangko Sentral ng Pilipinas statistics, Herrera said Filipino workers in the UAE sent home a total of $471.379 million from January to September this year, down by less than one percent from the $474.249 million they remitted in the same period in 2008.

Herrera said the government should prepare to find alternative employment here or abroad for the workers that would be forced to leave Dubai, apart from giving them emergency financial assistance.

The government, for its part, said it is already preparing financial and other necessary assistance for Filipino workers who may be displaced due to the prevailing Dubai debt crisis.

The Philippine government has not recorded any Filipino worker displaced due to the Dubai debt crisis, although there have been reports that some were given shorter working hours.

Overseas Workers Welfare Administration (OWWA) chief Carmelita Dimzon said the agency is ready to provide interest-free loans to those who would be retrenched in Dubai.

“We can accommodate and provide them loans if necessary,” Dimzon said, adding that the OWWA is closely monitoring the situation in Dubai.

Dimzon, however, stressed that the OWWA board would have to determine and decide the amount of loan to be provided.

She noted that OWWA granted loans of P50,000 to enable workers displaced by the global economic crisis to put up their own business and seek other sources of livelihood. –Mayen Jaymalin (The Philippine Star)