OWWA faces bankruptcy by end of 2021 if pandemic continues to displace OFWs
Updated @ 10:47 p.m., June 24, ,2020
MANILA, Philippines — The Overseas Workers Welfare Administration (OWWA) fears bankruptcy by the end of 2021 if the coronavirus pandemic continues to displace overseas Filipino workers (OFWs).
During a Senate labor committee hearing on Wednesday, OWWA Administrator Hans Leo Cacdac told senators that the agency’s continuing expenditure for the assistance of OFWs affected by the crisis could “threaten” the sustainability of its trust fund.
According to Cacdac, OWWA had cash assets amounting to P19.6 billion at the beginning of 2020.
“We started the year at P19.6 billion, we’re down P18.8 billion due to expenditures natin for the first half of the year,” he said, adding that OWWA collections have also been down by 46 percent in recent months.
Cacdac said OWWA has so far spent P1.145 billion on food, accommodation, shelter, and transportation assistance, among others, to the affected OFWs since March 15.
Of the amount, he said P784 million was spent on hotels, which were transformed into quarantine facilities for returning OFWs.
“The number of OFWs we have billeted around 28,000. We incurred P29,000 per capita cost per OFW since March 15,” he added.
He said OWWA has also spent around P132 million for food assistance.
Of the amount, Cacdac said P60 million was allocated for OWWA’s overseas food assistance operations, which has benefited around 70,000 Filipino migrant workers.
OWWA is also providing meal assistance to seafarers stranded in Manila, he added.
“For the rest, we have spent here in what we call Tulong Marino Program benefiting 7,000 stranded seafarers all around the city,” Cacdac said.
“These are seafarers who have contracts or seafarers who have long been applying to get a contract. They were overtaken by the COVID-19 pandemic and have been living in dorms, boarding houses around the city. We have been providing food assistance to 7,000 of them since March 15 every day, three meals a day,” he explained, speaking partly in Filipino.
The OWWA chief said the agency also shoulders the cost of the sea, air, and land transportation for OFWs returning to their home provinces.
On top of this, Cacdac said OWWA would also be offering a P10,000 cash subsidy to OFWs and scholarships to their children, which would have an allocated fund of P2.5 billion.
“We are braced to spend around P2.5 billion in the next few weeks because of the financial assistance package,” he said.
With this in mind, OWWA funds may be depleted by at least P10 billion by the end of the year and if the situation triggered by the pandemic continues, the agency’s fund may be reduced to less than P1 billion by the end of 2021, according to Cacdac.
“We’re worried about the future…We know that this is a fund for OFWs and we’re willing to spend them but we’re also thinking of the sustainability factor,” he added.
Noting the concerns raised by OWWA, Senate Minority Leader Franklin Drilon inquired if the agency may face bankruptcy by the end of 2021. In response, Cacdac answered in the affirmative.
“If the current situation keeps up we are spending for hotels, we’re spending for food, we’re spending for transport, assuming all factors currently present continue…yes [we could face bankruptcy by 2021],” Cacdac said.
“By the end of next year, if this trend keeps up, we will be down to less than P1 billion and that’s not even assuming that our reintegration programs will be on full swing,” he added.
According to Cacdac, OWWA spends an annual average of P800 million for its reintegration program with around 35,000 beneficiaries.
“That’s a pre-COVID year. On a [post] COVID year, there will be at the minimum 100,00 to 200,000 who will seek reintegration assistance,” he added.
When asked about the agency’s investment income, Cacdac said OWWA’s return of investment in 2019 amounted to P609 million or a rate of return of around 3 to 2.5 percent.
“Out of around P18.5 billion that we have invested, we got P609 million,” he said.
“The 609 million that we earned arose out of our investments in government financial institutions which is the restriction, the qualification under the OWWA charter,” he added.
Cacdac said OWWA had earlier asked Congress for a supplemental budget of P5 billion to sustain the agency’s repatriation spending as well as preserve its trust fund.
“Last June 1st we delivered a letter from [Labor] Secretary [Silvestre Bello III] to the Senate president asking for a supplemental fund of around P5 billion in the area of hotel, food and transport so that we could be sustained along these lines and we could devote more programs for reintegration and financial assistance for our OFWs and, of course, preserving the fund at the same time,” he said.
A former labor secretary and chair of OWWA, Drilon urged the agency to utilize the remaining of its existing P18.8-billion fund for the to repatriate and extend financial as well as livelihood assistance to OFWs.
“I strongly suggest that OWWA provide fullest assistance to the OFWs. That’s their money. Nobody expected this. What is needed to do is help our coutrymen abroad,” the senator said, speaking partly in Filipino.
The OWWA Fund is principally sourced from OFW membership contributions, which Drilon said “could and should” be used to assist affected OFWs.
The latest figures from the Department of Labor and Employment showed that there are around 345,000 OFWs affected by the pandemic.
Bello, who also attended the hearing, noted that 85,000 OFWs remain “stranded” amid the health crisis. Around 59,000 have so far been repatriated.
Meanwhile, 191,000 “opted to stay” despite the government’s repatriation offer, the labor secretary added.
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