The Philippines at a Glance
Working in the Philippines
Due to the catastrophic damage caused by Typhoon Haiyan/Yolanda in the Eastern Visayas region in November 2013, which might take years to rebuild, we cannot ensure that the factual information in this article series is up-to-date for the entire country. The current version of this guide was accurate in autumn 2013, before the disaster, but it is yet unclear for how long, or in which way, issues like health and safety, transport, or the national economy will be affected. Thank you for your understanding!
InterNations Editorial Office
Working in the Philippines is an increasingly attractive option for many expatriates. Economically, the country has a lot to offer and attracts more and more interest from foreign investors who consider working in the Philippines a chance to establish themselves in the region. The country itself tries to implement changes to be able to compete with other Asian countries and the rest of the world.
Due to the growing consumer demand and a rebound in exports and investments, the Philippines’ GDP has grown 6.6% in recent years. The economy survived the recession of 2008 and 2009, and it is now experiencing significant growth.
All in all, there are about 40 million people working in the Philippines, 53% of them are employed in the services sector. Other important sectors for expats working in the Philippines are agriculture and the production industries. With an unemployment rate of 7%, conditions are not bad.
Despite its currently strong economy, the Philippines face large national debt and a high rate of poverty. At the same time, the birth rate is extremely high, which could lead to the population doubling in the next few years. Also, the country depends on the money overseas workers send home to their families. The government yet has to take measures to make the best out of the strong economy and create incentives for people to start working in the Philippines.
What the long-term economic effects of the 2013 typhoon will be is still unclear. Beyond the obvious human tragedy caussed by the natural disaster, the infrastructure in the eastern Philippines could take years to rebuild. The storm damages may also cut the predicted GDP growth for 2014 by 1%, or more.
Every foreign national who plans on working in the Philippines needs to report to the Philippine Department of Labor & Employment (DOLE) for an Alien Employment Permit (AEP). If you are headed for the Philippines and have already secured your non-immigrant visa (see “Moving to the Philippines” for more information), you should apply at your nearest embassy or consulate.
If you already have an employer in the Philippines, it is probably easier if they apply on your behalf for an AEP at the nearest regional DOLE office. The duration your AEP is valid strongly depends on your work contract and on your position within the company for which you will be working.
Social Security in the Philippines
When it comes to social security services in the Philippines, private-sector employees as well as domestic workers and self-employed people are covered. For Filipinos working abroad, it is possible to gain voluntary coverage. The same applies to insured persons who are no longer eligible to receive compulsory coverage and for the spouses of insured people. Government employees and military personnel have their own system.
The Social Security system in the Philippines covers the following benefits:
- Old age
- Sickness & maternity
- Work injury
Contributions made to Old Age, Disability and Survivors funds while working in the Philippines also cover sickness, maternity and funeral benefits. The contributions are as follows:
- Insured people contribute 3.33% of their gross monthly earnings
- Voluntarily insured people have to pay their own as well as the employer’s contribution, which amounts to 9.4% of their gross monthly earnings
- Employers thus pay 7.07% of their employee’s gross monthly earnings
Unfortunately, as is the case with healthcare coverage, your social security coverage may not be as comprehensive as you would expect. For that reason, it may make sense for expatriates working in the Philippines to keep contributing to their social security system at home or to take out private plans.