THE RECENT announcement by OWWA Administrator Wilhelm Soriano that he wants the Overseas Workers’ Welfare Administration to be moved under the wings of Department of Foreign Affairs (DFA) from the Department of Labor and Employment (DOLE) is telling. Telling because Labor Secretary Patricia Santo Tomas has been questioning how OWWA spends its annual budget, and because she has tried to put a brake on any further spending not sanctioned by its Board of Trustees.
The grumbling about how OWWA handles its budget began a few months ago when a labor group did a study on how the agency used its money. The results were startling: Out of every dollar contributed by OFWs, a whopping 77 percent of that money went to paying the salaries, benefits and administrative costs of OWWA staff, with only a mere 12 percent of every dollar directly spent on helping OFWs in need!
As most OFWs know, the money they contribute to OWWA has come in the form of the $25 mandatory insurance fee that must be paid to OWWA before an overseas employment certificate is issued. Without the OEC, no OFW is allowed to leave the Philippines, so there is no choice but to pay this fee. With more than 700,000 Filipinos leaving the country last year alone for employment, you can calculate the huge amount OWWA is reaping from the membership fee. More than $473.5 million in 2001, according to my calculator. Note that the $25 fee is separate from the 900-peso (about $18) Medicare fee collected yearly by the agency from those who cannot show proof of outstanding PhilHealth membership.
Despite this huge source of income, stranded OFWs continue to walk the streets of many Gulf countries because OWWA claims it doesn’t have enough funds to fly them all home, or because the Philippine embassies claim that sponsors have legal claims against their Pinoy employees, forcing them to stay in Saudi Arabia penniless, jobless, in legal limbo until some solution is found.
Questions are not only being asked about how much money is directly spent on OFWs, but also about how OWWA funds have been invested in dubious schemes. According to the annual audit report on OWWA by the Commission on Audit, dated July 30, 2001, questions were raised about an OWWA investment of P664 million in Smokey Mountain Project Participation Certificates. This investment was made in 1995, and OWWA was expecting to be paid back by 1999, with interest of course. The maturity value of its certificates reached P720 million by October of 2000. To date, OWWA still hasn’t been paid back.
The interesting point here is that the Smokey Mountain project was for low-income housing. The project was initiated during the administration of President Fidel Ramos by one of the president’s closest friends: construction and property development magnate Rhegis Romero III. I wouldn’t be surprised if Ramos had instructed OWWA to invest P664 million in the project to give Romero’s firm an easy source of financing, financing that they probably couldn’t get from commercial banks. This is mere speculation of course, but rumor has it that Romero’s firm is now having financial difficulty in paying back its creditors, of which OWWA is one.
If this smacks of vintage Marcos-era crony deals, that’s because it is similar to what went on then. The deafening silence on the part of the Macapagal-Arroyo administration on this issue and others from the Ramos era is strange. For sure Ramos did much to improve the Philippine economy, but he was also sloppy in many deals and just plain lucky to have been the president in the years just before the Asian economic meltdown in 1995.
Sen. Aquilino Pimentel and other legislators are now initiating a probe into the OWWA and how it manages its money. This is a welcome development for OFWs who work so hard to keep the Philippine economy afloat with their monthly remittances. Romero should be forced to pay OWWA back immediately, and most importantly, more than just 12 percent of the $25 insurance fee should be directly spent on helping OFWs in need.
SPEAKING of former President Fidel Ramos, another current hot issue is that of the independent power producers, or IPPs. If you remember, in 1991-92, the Philippines wasn’t producing enough electricity to meet rapidly rising demand. This resulted in horrific 8-12 hour daily brownouts that literally froze the country’s economy. When Ramos was elected president in 1992 he moved quickly to build additional power supplies. The way he chose to go was to allow IPPs to build expensive power generating plants, and agreed to pass on the increased costs of this power to consumers through the purchased power adjustment (PPA). Now, for anyone who has lived in the Philippines, they will be familiar with the PPA amount appearing on their monthly electricity bill, and it’s not a small amount. The Senate’s energy committee is now looking into 42 contracts that the Ramos administration signed with IPPs in the 1990s. Power Sector Assets and Liabilities Management Corp. president Edgardo del Fonso admitted to senators this week that the government has already absorbed the $3.975 billion cost of 12 stranded contracts with IPPs.
Needless to say, the bottom line of this investigation is the enormous cost power consumers are being forced to bear because of the disadvantageous contracts that were signed with IPPs in the 1990s by the Ramos administration. Critics of Ramos, claim that power needs were vastly exaggerated in the 1990s when projections were being made about future power needs, leaving the Philippines today with a glut of very expensive electricity. The government should do something to lower electricity costs. The Philippines already has some of the most expensive power rates in Asia, excluding Japan, leaving it at a disadvantage when trying to lure foreign investors. Ramos did well in quickly restoring power supplies during his administration, but one wonders at what cost? Will future generations of Filipinos be forced to pay for Ramos’ haste through huge PPAs? Hopefully not.
Comments or questions? Email the author at: [email protected].
Visit the author’s website at www.manilamoods.com to read past columns and those of guest writers.
