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In a June 2018 post, I described how Filipino seafarers were being shortchanged in the conversion of their dollar remittances to pesos. Manning agents shave off at least one peso from the foreign exchange rate. Naturally, the families of seafarers get less than what they should. It is a form of thievery that has gone on for decades. And it will go on ad infinitum for a very simple reason: the rules make the scheme possible.

An opening for the unscrupulous

The Philippine Overseas Employment Administration (POEA) standard employment contract for Flipino seafarers requires the seafarer to send home once every month through any authorised Philippine bank at least 80 percent of his or her monthly basic salary. It states: “The 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.”

That creates a neat opening for manning agents who have no scruples. The monthly remittances are not paid directly to the allottees. They go to the dollar account of the crewing company, which then takes care of the foreign exchange conversion. Since there is no vetting of the process, the company is pretty much free to use any rate in contravention of the POEA rulebook. Many, in fact, do.

Breach of the Maritime Labour Convention

The 80 percent remittance rule is apparently meant to discourage seafarers from squandering their money and ensure that their families back home get adequate monthly support. Having manning agents handle the forex conversion and disbursement to the families also seems convenient for all concerned. However, both practices are in breach of ILO Maritime Labour Convention, 2006.

The Convention states in Standard A2.2 – Wages under Regulations 2.2 – Wages:

4. Measures to ensure that seafarers are able to transmit their earnings to their families include:


(a) a system for enabling seafarers, at the time of their entering employment or during it, to allot, if they so desire, a proportion of their wages [emphasis added] for remittance at regular intervals to their families by bank transfers or similar means [emphasis added]; and


(b) a requirement that allotments should be remitted in due time and directly to the person or persons nominated by the seafarers [emphasis added].


5. Any charge for the service under paragraphs 3 and 4 of this Standard shall be reasonable in amount, and the rate of currency exchange, unless otherwise provided, shall, in accordance with national laws or regulations, be at the prevailing market rate or the official published rate and not unfavourable to the seafarer [emphasis added].

Tolerance and skewed mindset

Some manning agents in Manila rationalise the use of a conversion rate other than the official one by calling it “service charge”. But what right have they to impose such a charge when: 1) the banks already charge clients for every inward remittance; 2) manning agents are not licenced to render banking services or to operate as money changers; and 3) disbursing allotments is part of their service to their foreign principals?

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. Surely, they wouldn’t mind sharing part of their good fortune? To top it all, the malpractice has failed to elicit an outcry from the seafarer unions and maritime NGOs. The local maritime press, not surprisingly, has stayed away from the issue. And so the stealing goes on… and on.

~ Barista Uno

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