Friday, January 22, 2021

Shortchanging in Filipino seafarer's remittances



Filipino seafarers  are being shortchanged in the conversion of their dollar remittances to pesos which a blogger  described as a “thievery” in the maritime industry.

It is a known practice of some unscrupulous   manning agents to shave off at least one or two  pesos from the foreign exchange rate, misleadingly calling the cut as “service charges.”

The Philippines is considered as one of the major supplier of maritime labor globally as it is estimated that there is one Filipino seafarer for every four to five crew members  on board a vessel at any time.

The sea-based sector’s remittance comprise at least 22 percent of the total dollar remittances of Overseas Filipino Workers (OFWs).

 

Unlike land-based OFWs,  the POEA Standard Employment Contract (SEC) mandates that  the Filipino seafarer is required to make an allotment which shall be at least eighty percent (80%) of the seafarer’s monthly basic salary, payable once a month to his designated allottee in the Philippines.

 

The estimated 519,031 deployed Filipino seafarers in 2019 per POEA data  remitted  $6.539 billion or around P326.95 billion.

Lawyer  Peter Payoyo pointed out  in an article  the practices of some manning agencies of   pinching  valuable pesos from seafarers’ monthly remittances. 

Payoyo cited the survey made by Philippine Seafarers Assistance Program (PSAP) which revealed that manning agencies have been using a variety of odd techniques to make a quick buck from the remittances flow: “delayed forward of allotment”, using a “house rate” for the currency exchange, “allotment slip available upon request”, “allotment slip mailed to seaman onboard”, or “allotment after all deductions made”, which are often not explained to the seafarer or the family.

He stressed these practices are clearly contrary to the letter and spirit of the POEA contract which says that facilitation by the manning agency of allotments shall be “at no expense to the seafarer”, and that “allotments shall be paid to the designated allottee in Philippine currency at the rate of exchange indicated in the credit advice of the local authorized Philippine Bank”.

The  2019 Seafarers Happiness Index survey report released by the Mission to Seafarers (MTS) noted that seafarers repeatedly lamented  that their wages seemed to be falling in real terms due to several factors.

Seafarers cited the dubious  fees charged by some manning agents  as well as the confusing exchange rates, which impacts the money they are able to provide to their families.

 

Blogger Fred Uno of MarineCafe.com pointed out in an article that is not uncommon for  unscrupulous manning agents got to keep part of the remittances  when converting the money to pesos by using an exchange rate that is usually one or two pesos  lower than the official rate of the Bangko Sentral ng Pilipinas (BSP).

 

Such tampering with the dollar-to-peso rate, he added, results to the shortchanging of Filipino seafarers  since their  families  receive less than they should in allotments.  

Uno cited as an example  an officer with a basic monthly salary of $2,000 will remit to his allottee’s account 80 per cent of the amount or $1,600.

 

The allotment in pesos should be PHP76,800 based on the current rate more or less of P48  to the dollar (the BSP’s reference rate on 11 January  2021  is PHP48.0790  for every dollar).

 

If the manning agency knocks off PHP2.00 from the conversion rate, the allotment would amount to only PHP73,600, or a difference of PHP3,200.

 

Under a 10 month contract, his family would have been deprived of  PHP32,000 or $666.

 

One peso may not seem much but the total amount forfeited by seafarers’ families as a result of the forex manipulation could be mind-boggling.

 

As the monthly remittances are not paid directly to the allottees but to the dollar account of the crewing company, Uno stressed that the company has the freedom  to use any rate as  the foreign exchange conversion in contravention of the POEA rules.

 

Uno described said practice as “a form of thievery that has gone on for decades.”

He stressed that “it’s all a reflection of a damaged culture — a skewed mindset which considers it all right to cheat seafarers on their remittances because they earn in dollars.”

Payoyo stressed that  the government can force manning agencies  to be fully transparent in the facilitation of allotments,  as the POEA standard contract requires.

He also suggested that foreign employers and principals  remit seafarers’ wages directly to individual family bank accounts in the Philippines, rather than through the bank accounts of manning agencies

Atty. Gorecho heads the seafarers’ division of the  Sapalo Velez Bundang Bulilan  law offices. For comments, email info@sapalovelez.com, or call 09175025808 or 09088665786)

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