Gulf jobs: 2.5 million Filipinos

A Saudi man walks past a pump at a petrol station on Dec 28, 2015 in Jeddah. PHOTO: AFP

The Philippines is starting to feel the first ripples of the oil price shock.

News broke recently that some 300 Filipinos working for Saudi Oger - one of the biggest construction firms in Saudi Arabia - were holed up inside a camp in the city of Jeddah, unable to leave because they had not been paid for the past five months and their residence permits had expired.

A report on the Philippine online news site InterAksyon said thousands of migrant workers were gathering outside the company's gates each day to await word about their salaries.

Workers from India and Pakistan had already gone on strike, it said.

Mr Nicon Fomeronag, a spokesman for the Labour Department here, told InterAksyon that Saudi Oger informed the Philippine Embassy in Jeddah that it could not yet pay its workers because of delays in payments from the Saudi government.

InterAksyon also reported that Filipinos working for steel firm MMG-Mohammad Almojil Group have not been paid a year's worth of salary, although they continue to work at the company's factory in Damman, also in Saudi Arabia.

Another big Saudi contractor, Saudi Binladin Group, meanwhile, has sent word that it will lay off some 5,000 Filipino workers next month "in light of the mass layoffs and austerity measures being employed by the Saudi government", according to the overseas workers advocacy group Migrante.

Saudi Arabia has had to cut back on infrastructure spending as it resorts to austerity measures to cope with slumping oil prices, said Mr Fomeronag.

Crude prices have fallen by more than 70 per cent to below US$30 a barrel over the past year and a half, dealing a blow to oil-producing states in the Middle East. The 2.5 million Filipinos working in the region - of which about a million are in Saudi Arabia - are a major source of remittances.

They are still sending money home: US$5.24 billion (S$7.36 billion) in the first 11 months of last year, up 9.6 per cent from 2014.

But analysts warn that it may just be a matter of time before the full impact of the slump in crude prices hits the migrant workers.

Mr John Monterona, Middle East coordinator for Migrante, believes that as many as 120,000 Filipinos could lose their jobs this year.

Philippine Labour Secretary Rosalinda Baldoz told reporters on Feb 8 that the government is keeping tabs on some 1.5 million Filipinos working in the oil and construction industries in the Middle East - nearly 900,000 of them in Saudi Arabia - and is preparing contingencies in case of massive retrenchments there.

Another concern among Filipinos in the Middle East is that all six Gulf states - Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman - are set to adopt a value-added tax by 2018 and are reviewing old plans to tax remittances to raise non-oil revenues.

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A version of this article appeared in the print edition of The Sunday Times on February 21, 2016, with the headline Gulf jobs: 2.5 million Filipinos. Subscribe