State insurance no security blanket for OFWs


MANILA (OFW Journalism Consortium, Vo. 6, Nos. 8-9, Dec. 16)—DESPITE increasing risks in host countries and disasters in the Philippines, Filipinos abroad still feel safer that remittances stay in their pockets rather than put these in health and non-life insurance, a social security specialist bared in his report on social protection.

“Ironically, it is the remittances sent by overseas migrants that serve as social insurance for recipient households, shielding them from environmental risks,” Dr. Eduardo Gonzalez wrote for the 2007 global report of Montevideo, Uruguay-based nonprofit group Social Watch.

Gonzalez, who is also professor at the University of the Philippines’s Asian Centre, said these “shocks” include lack of access to health insurance, and damages to properties brought by natural disasters like typhoons.

Citing a study by Filipino-American Dean Yang and Korean Hwa Jung Choi on OFW remittances and the use of these during rainy seasons, Gonzalez wrote that changes in incomes of Filipino migrant workers’ households “lead to changes in remittances in the opposite direction,” and this runs consistent with migrant remitters’ “insurance motivation”.

That is, roughly 60 percent of declines in income in disaster-stricken areas are replaced by remittance inflows from overseas. That money coming in serves as insurance in the face of aggregate shocks to local areas.

These shocks make it more difficult to access credit or inter-household assistance networks that normally help households cope with risk, according to Gonzalez.

The Philippines, being an archipelago, is “already geographically at risk” in providing social security to citizens since typhoons and earthquakes frequent the country.

The last typhoon, tropical storm “Lando,” claimed 14 lives and injured eleven, with damages to infrastructure and agriculture hitting an estimated P148.75 million, according to National Disaster Coordinating Council data.

Overseas, aside from typhoons, Filipinos also work in high-risk countries such as Iraq and Lebanon.

While the Philippine government has an array of social security programs, Gonzalez said coverage remains “incomplete”.


GONZALEZ cites there are three government measures that “indicate some form of insurance coverage for OFWs”.

These are the expanded program of the Philippine Health Insurance Corp. (PhilHealth), the Social Security Systems’s voluntary social security coverage, and the Overseas Workers Welfare Administration (OWWA). Of the three, the OWWA deals directly with OFWs who pay US$25 to avail of services.

The OWWA website writes that agency, as of 2006, has 2,982,013 members and has spent some P3.036 billion over an 11-year period (1995 to 2005).

Gonzalez cited a Commission on Audit report that shows OWWA spends over three times more for its personnel and operations every year compared to the social benefits it gives out to overseas Filipinos.

A report by Filipino-Americans Dovelyn Agunias and Niel Ruiz for the Washington-headquartered Migration Policy Institute (see story “Analysts cite OWWA fetters in protecting OFWs”) that OWWA has tilted the balance more towards achieving fund security than providing services to beneficiaries.

Since OWWA has been collecting this amount for over 25 years, its sum should be substantial.

“Yet, its welfare assistance has been too little and too selective, leaving most overseas workers virtually unprotected while abroad and when they eventually come back,” according to Gonzalez’s report titled “Political Will is the Key to Social Protection”.

On the other hand, SSS has a tax-exempt savings and pension plan for OFWs called the OFW Flexi Fund.

But even if this Flexi Fund can provide retirement, death and disability benefits to availees, only some 16,000 OFWs have availed of the Flexi Fund.

The SSS, the country’s largest social security fund for private workers, claims to have 515,762 OFWs as members.

PhilHealth, meanwhile, has an Overseas Workers Program that provides almost the same medical and hospitalization benefits to OFWs like what the agency provides to local workers.

Out of some 2,419,682 paid health claims, PhilHealth’s 2006 data show that OFWs as a paying sector only account for 0.02 percent or an estimated 48,000 paid claims of the total.

PhilHealth has an estimated 16.26 million members or 68.4 million beneficiaries, including indigents.

According to Gonzalez, “the program for indigents seems to be well-funded, receiving 2.5 percent of the expected government revenues from taxes on ‘sin products’ (alcohol and tobacco) for the next five years and 10 percent of the local government share in the expanded value-added tax.”


SOCIAL Watch considers social security “as resulting from policies geared to employment and to reducing inequality, and can be defended as necessary for governance and the very survival of a system that would lack popular support without it.”

Simply put, it means public officials and elected leaders should fiercely lead in addressing poverty and the issues confronting the poor, the most insecure segment of the population.

The group’s compilation of reports, titled “In Dignity and Rights: Making the Universal Right to Social Security a Reality” wrote ”social security is one of the internationally recognized human rights, and therefore is not only advisable but also a legal obligation.”

As Gonzalez explains, the Philippines is not wanting in social security programs nor did these began just last night.

These programs that Gonzalez noted “have existed for decades… are categorized into social insurance, pensions and other forms of long-term savings, social safety nets, welfare and social payments, and labor market interventions.”

He criticizes these programs’ coverage as “incomplete and delivery is diffused.”

“Financing remains uncertain and is vulnerable to corruption,” Gonzalez added.

Likewise, as Gonzalez emphasized in his paper, that the poor subsidizes the rich, especially in terms of health insurance, because of skewed policies. He cited PhilHealth as example.

“The reality for the vast majority of poor people is that social services are unavailable, or are skewed towards the needs of the rich, or are dauntingly expensive – and this drives up social inequality.”

Gonzalez throws the ball on government’s hand, repeating the oft-quoted advice that political will is the key to reforming social security.

He notes that while Filipinos in 193 countries are providing the safety cushion on the country’s economy, they should be given their due, even on the matter of social security.

“The will to reform is key to making social protection work —and to do this, the government must feel the heat,” Gonzalez said.