NEWS RELEASE - February 23, 2005
References: Connie Bragas-Regalado, Chairperson, 259-1145 & 0927-2157392
Vince Borneo, Information Officer, 0927-7968198

Some truths on the US$20,000 recruiter bond in Japan
Government profits immensely from plight of OPAs in Japan

Migrante Sectoral Party Chairperson Connie Bragas-Regalado today called on the Congressional Committees on Labor and Employment and Overseas Workers Affairs to investigate "possible shenanigans at the Philippine Embassy in Japan with regard to the US$20,000 bond charged by the Philippine government to Japanese recruiters of overseas performing artists (OPAs)."

"While the Department of Foreign Affairs (DFA) tries hard to defend its post in Tokyo, recent statements of Philippine Ambassador Domingo Siazon Jr. reveal that the Philippine government profits immensely from fees collected from Japanese recruiters of Filipinos deployed to Japan. His admission in media reports that the US$20,000 bond paid by each Japanese recruitment agency as an escrow bond that is deposited in any bank of the recruiter's choice (such as the Land Bank or Philippine National Bank) does go straight to the National Treasury shows that government is further profiteering from the exploitation of OFWs in Japan. This is especially true for those forced to work in the notorious entertainment industry in Japan," Bragas-Regalado said.

"This is the added reason why the Philippine government is adamant in its drive to keep sending Filipino women to Japan as entertainers who are highly vulnerable to human trafficking. Congress should look into this, including comprehensive audit reports of these bonds if ever there are any, and how government has handled these funds is in order," the Migrante leader added.

The Philippine Embassy in Tokyo asserts that, "in 2004 alone, it received a total of 1,666 complaints from Filipino entertainers against their employers. These complaints were all resolved mainly because of the existence of these bonds. The US$20,000 is an escrow amount each Japanese promotion agency is required to deposit with a Philippine bank of its choice. Therefore, not a cent of that amount or its earned interest ever passes the embassy; the deposit belongs to the agency, not the embassy nor the national treasury. Being a deposit, it earns interest for and can be withdrawn only by its owner -- the agency, not the embassy - but being in escrow, it can be withdrawn subject to conditions: (a) the agency ceases its operations with Filipino entertainers, and (b) there are no pending claims against the agency filed within four years after it ceases such operations."

"This among others, is what the Philippine government does not tell Filipino OPAs bound for Japan. Congress and the public are blind to the schedule of fees levied on Japanese agencies hiring OPAs. These fees are then passed on to OPAs via gargantuan placement fees that vary from P30,000 up to even P200,000. There has been no formal report presented to Congress as mandated by the Migrant Workers and Overseas Filipinos Act (RA 8042) on these complaints and if the victims were really adequately compensated by these bonds. Definitely there is something amiss in Tokyo with regard to these bonds and moreso on the government's protection of OPAs," Bragas-Regalado said.

"While it is true that the US$20,000 bond is not collection exacted by the embassy, it is not true that government does not make a profit from these bonds. When a Japanese agency deposits the bond in a Philippine bank, that bank exacts an accumulated interest profit that bolsters government's scant financial resources. These funds should all be audited, especially how government has disbursed these," Bragas-Regalado added.

According to Amb. Siazon, "each Japanese agency is required to submit the following documents on an annual basis: (1) Special Power of Attorney, (2) Manpower Request, (3) Affidavit of Responsibility and Undertaking, and (4) Company Registration. Each of these documents is verified by the Labor Office for a fee of Y2,100 and authenticated by a consular official for a fee of Y5,250; thus, the total fees collected by the embassy is Y29,400 per agency [4 x (Y2,100 + Y5,250)]."

"Also a "Processing Fee" of Y7,350 (broken down into the Y2,100 verification fee collected by the Labor Office plus the Y5,250 authentication fee charged by consular services) is levied on each individual employment contract," he added.

"This only shows why OPAs have to pawn almost all their belongings if not get into onerous loans just to work in Japan," Bragas-Regalado said.

Migrante posited some figures to show the big amounts involved in the export of Filipina entertainers:

For the recruiter's Deposit / Escrow Bond:
US$20,000 dollars in deposit per company times 800 companies since 1991.
US$20,000 x 800 companies = US$16,000,000 or 1.7 BILLION YEN collected as deposit from recruiters. [This amount is supposed to be in the care of the "National Treasury" according to Ambassador Siazon.]

Even at a 3% per annum interest, this is 50 MILLION YEN per year of income from the export of Filipinas to Japan.

For the recruiter's Annual Registration Renewal:
37,000 yen per year times 400 companies - [Please note this is a conservative assumption that only 50% of the 800 companies are still active. Y37,000 x 400 = Y14,800,000 per year.

Processing Fee:
Recruiters pay a processing fee of 7,350 yen per entertainer they bring to Japan. 80,000 entertainment visas were issued last year. Y7,350 x 80,000 = 588,000,000 YEN collected in 2004.

"Mathematically, that is: Y50M + Y14.8M + Y588M = 650 MILLION YEN of accumulated government income from fees alone from the export of entertainers. This is what Amb. Siazon, the DFA and Malacanang are not saying, hence the need for a Congressional investigation," Bragas-Regalado said.

"We would like to reiterate that these bonds and fees do not mean government protection to OFWs in Japan. Memorandum Circular No. 01, issued by the Department of Labor and Employment on Nov. 20, 1991, purposively requires the payment of these bonds to answer for all claims of the artist against the employer or promoter. This DOLE Memorandum, just like the Artist Accreditation Certificate does not guarantee the welfare and safety of Filipina entertainers and all other 31,000 undocumented Filipinos in Japan since it gives a legal way out to abusive employers and promoters - especially those connected to criminal and human trafficking syndicates," Bragas-Regalado said.

"Government profits immensely from the plight of OFWs in Japan, including those who are pushed into the clutches of human trafficking syndicates," Bragas-Regalado ended. #