Philippines’ dominant crewing position comes under threat

Philippines’ dominant crewing position comes under threat

The Philippines, the world’s dominant source of seafarers this century, is coming under severe pressure with the number of deployed crew dropping drastically last year and a host of top managers warning today that the country’s manning preeminence is under threat.

Data from the Philippine Overseas Employment Administration (POEA) showed that seafarer deployment dropped by 111,961 last year to 337,502, a huge 25% drop with India, Indonesia and Bangladesh the nations moving to fill the gap.

The Philippines’ competitiveness when it comes to crewing has eroded down to cheaper alternatives coming on the scene, greater red tape and a drop in training and skills standards, which once again has put its accreditation by the European Maritime Safety Agency (EMSA) at risk.

Commenting on the statistics, Captain Pradeep Chawla, managing director of training at shipmanagement giant Anglo Eastern Group, told Splash that the world’s crewing needs would always found cheaper solutions and the Philippines was consequently at risk. Seafaring remains a key pillar of the local economy with the billions of dollars sent home by crew from across the world.

Chawla said the declining numbers out of Manila were down to the “constant quest” by shipowners to reduce manning costs.

“There is some concern about the results of the EMSA audits,” Chawla added, saying also: “The reputation of the ambulance chaser lawyers of the Phillipines is also a factor.”

Indonesia has seen a noticeable growth in crew being deployed on international deepsea ships recently, with wages there around a third cheaper than in the Philippines. Thomas Wissman, who heads up US consultants Wissmann & Associates, said Indonesia was rapidly gaining a crewing reputation as the new Philippines.

Nevertheless, Indonesia remains a country with tricky governance, which might stymie crewling levels growth, Carl Schou, the head of Wilhelmsen Ship Management, told Splash.

Kishore Rajvanshy, the veteran head of Hong Kong manager Fleet Management, a company that has up to 5,000 Filipinos on its books, said the crewing data from Manila was likely down to a mix of macro-economic issues and recent government rules and policies affecting the hiring of Filipino seafarers.

The Philippines has maintained a healthy GDP growth rate of over 6% in recent years. The unemployment rate has fallen from levels of 8% in 2010 to 5.1% by the end 2018. This trend shows a growing demand for a larger workforce to meet domestic consumption, Rajvanshy observed.

“Recent policies and various on-the-ground realities involved in the hiring of Filipinos is adding no comfort,” Rajvanshy said.

Wages are still on the rise for Filipino crew while the local currency has declined against the US dollar by 17% over the last four years.

In addition, Filipino manning agencies have to pay additional compulsory government contributions to the local social security and health systems as well as a housing development fund. These payments have shot up recently, increasing the cost disparity with other crewing nations.

Allan Falkenberg, group managing director of crew management at V.Group, hit out at the nation’s spotty training standards.

“Philippine authorities are still struggling to bring their maritime education, training and certification system in line with international standards, despite substantial efforts in recent years. As a result, the European Commission has issued a warning saying that failure to comply with the European Maritime Safety Agency’s standards for the implementation of the STCW Code will lead to the possible ban of Filipino officers from EU-flagged ships,” Falkenberg said.

Falkenberg said this has been compounded by inconsistent administration of POEA regulations by Philippines authorities and increasing competition from other nations such as China, Indonesia, India and Ukraine.

To reverse the trend, Fleet’s Rajvanshy called for serious efforts to be made to address the concerns between the seamen employment regulators in the Philippines, the manning agencies and the end-user – the shipowners.

 

Photo: Wallem Group

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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3 Comments

  1. Avatar
    Sunil
    April 9, 2019 at 6:07 pm

    What a pity! My best sailing experiences were with Filipinos. A Fun loving crew as compared to most other countries; and obedient.
    Other nationalities sometimes come with a baggage of wanting to pray 5 times a day; come what may!
    This has caused quite frequent challenges when fast and urgent decisions were needed. This is a sensitive topic which most European countries are reeling under on land and dare not address.
    A lot of situations are swept under the carpet while out at sea but are of serious concern all around the world.
    Feel above issue needs to be pondered over prior to replacing the Philipines. BTW Phillipines has shown the way how to treat seafarers humanely which most countries with cheaper crew are yet to emulate.

  2. Avatar
    Carolyn
    April 9, 2019 at 7:16 pm

    It seems that the only resource employers do not want to align cost with is quality workers. This is not unique to the shipping industry. Should I be optimistic and think that if the training issues are sorted shipowners would wish to stop seeking cheaper crew and complain about their quality? Also, I would need to know the details of the other issue and what they are calling red tape, employers seem to want no regulations to protect workers and their voluntarism in ensuring decent working conditions is not sustainable in all instances.

  3. Avatar
    Sunil
    April 9, 2019 at 7:55 pm

    Having started work about 37 years back I do know that; It is tough at sea nowadays, whatever sense of pride one had as a merchant Mariner has slowly been eroded to rural Indian standards. Many of the “ efficient managers” sitting in approx. GMT + 8 time zones are from small towns in India and they had replicated the standards of monthly pay same as the temporary labour(pay on 7th of each month), basically keeping a weeks salary in their hand .Indian crews never complained; doing that would blacklist them with the Indian ship management mafia.
    For the same reason the rest hours rule is blatantly violated for the key personnel and maybe the cause of most maritime accidents . Very sure that at least the top two ranks need duplication at frequent port rotation bundled with bunkering etc.
    I am sure that with the increasing accidents, owners may have to pay increased insurance costs( if competition doesn’t prevent that)
    and if substantial could bring about the change.
    In addition to above note that the shipping is very competetive these days and each company is out to outslug the other into submission…..but the seafarer’s are the easiest target.