The economic significance of Filipino seafarers: challenges

(Part 2)

The Philippine seafaring industry is currently facing an inconvenient truth: its market share in the global market is shrinking. Between 2000 and 2025, there has been a 1.74% decrease in the overall number of Filipino seafarer supply, with the absolute number of seafarers plateauing at 218,000 to 226,000 readily available seafarers each year. Even more worrying is the 24.65% fall (-1.13% compound annual growth rate) in the Philippines overall market share versus the global supply within the same period.

Part of the decline may be attributed to increased global competition and challenges related to the perceived negative reputation of Filipino seafarers, which can harm their prospects for future recruitment.

Some studies noted that Filipino seafarers are notorious for abusing personal disability compensation lawsuits against companies, which disincentivize future hirings. Some individuals, including Filipino lawyers, are also said to take advantage of the ambulance-chasing scheme enabled by the existing mechanisms for labor dispute resolution overseen by the Department of Labor and Employment (DoLE) through the National Conciliation and Mediation Board (NCMB) and the National Labor Relations (NLRC). Major employers across the globe have raised concerns about this with the International Maritime Employers Council.

On the other hand, concerns also arise with respect to the quality of seafarers being produced by the training institutes.

In 2022, 50,000 Filipino workers on European ships faced the threat of losing their jobs as the Philippines’ training standards fell short of the European Maritime Safety Agency’s (EMSA) evaluations. This has been a longstanding issue, with the Philippines being accused of neglecting compliance for the past 16 years since 2006 — a damaging blow considering its reputation as the world’s largest supplier of seafarers. Fortunately, the crisis has since been averted with the European Commission’s decision in March 2023 to recognize certifications issued by Marina, as the Maritime Industry Authority is known. However, this effectively only buys time for the country to correct what the regulators call “a hopefully temporary fall in standards.”

COMPETITION
The Philippines will have to increasingly contend with the other major suppliers of seafarers.

The Philippine market share may have been eroded by the consistent growth of the numbers of seafarers from China, India, Russia, Ukraine, Poland, Romania, and Bulgaria. Chinese seafarers are considered an alternative to their Filipino counterparts and may expand their presence in the international labor market if seafaring becomes a more attractive career path.

However, as mentioned in part one of this series, according to the Association of Licensed Manning Agencies (ALMA), Chinese seafarers are increasingly being deployed to primarily address their own internal needs, considering that China is the world’s top maritime-based trading economy. Consequently, it is probable that any count in Chinese seafarers within the global market share will be offset by a corresponding count of Chinese-flagged vessels. Meanwhile, India has emerged as the Philippines’ main competitor in supplying seafarers to the global market.

Other populous nations, such as Indonesia and those in Africa, are slowly emerging as growing suppliers of seafarers. One way the Philippines can stay ahead is to increase the number of schools that train officers for international vessels.

OFFICERS
One very productive way the Philippines can benefit from its demographic dividend (its average age is the youngest in Asia at 26 years) is to produce more seafaring officers.

The country has a large number of maritime academies, colleges, and training centers that prepare seafaring officers (deck officers and marine engineers). These fall into two main groups: Degree-granting schools (BS Marine Transportation/ BS Marine Engineering); and Postgraduate and Standards of Training, Certification and Watchkeeping for Seafarers or STCW training centers (for certification and upgrading). Among the best known institutions producing ship officers are the Philippine Merchant Marine Academy (PMMA, in Zambales) and the Maritime Academy of Asia and the Pacific (in Bataan). The former is government-sponsored and is a quasi-military academy and produces officers for the merchant marine, Navy, and Coast Guard. The latter is industry-backed (by the Associated Marine Officers’ and Seamen’s Union of the Philippines or AMOSUP) and has world-class facilities. It offers programs leading to degrees in BS Marine Transportation and Marine Engineering.

Reflecting the major role of the private sector in post-secondary education, there are a good number of leading private maritime colleges. Among them are the John B. Lacson Foundation Maritime University with campuses in Iloilo and Bacolod; the University of Cebu Maritime Education and Training Center; the Asian Institute of Maritime Studies in Metro Manila; the Mapua-PTC College of Maritime Education and Training in Laguna; and, the Palompon Institute of Technology in Leyte. Other recognized maritime schools are the University of Perpetual Help System DALTA Maritime; the Philippine Maritime Institute, the Southwestern University Maritime Regiment, the Davao Merchant Marine Academy, and the Holy Cross of Davao College Maritime.

With the current emphasis in human resource development on constant upskilling, reskilling, and retooling of professionals and workers, Maritime Training Institutes are playing a greater role in STCW. After graduation from their respective schools, officers are required to take mandatory STCW courses and upgrading programs. Some of the major training centers for this purpose are the AMOSUP Seamen’s Training Center, the Philippine Transmarine Carriers Training Center, NYK-TDG Maritime Academy (well known for producing high-quality ship officers especially for Japanese liners); the Magsaysay Training Center, and Marlow Navigation Philippines Training Center. These training institutions provide basic safety training, advanced courses (e.g., tankers, ECDIS, bridge/engine simulation), and officer upgrading (OIC, Chief Mate, Master, Chief Engineer).

With increased competition from other countries providing manpower for the international shipping industry, the Philippines must take full advantage of being considered as the preferred country for quality seafarers.

We must continue to build on our strengths such as English language proficiency, the supply of both ratings and officers, the relative appeal of seafaring as an occupation to many Filipino youths compared to shore-based employment, and retention of employees. These strengths may be eroded, however, if both the quality and quantity of Filipino seafarers deteriorate, particularly in light of recent failures to meet the STCW qualifications, the alleged exploitative labor practices, and a lack of strategic response to emerging international competition.

ADDRESSING CHALLENGES
To safeguard its competitive advantage in the global maritime labor market, the Philippines must urgently address these challenges and implement reforms that will sustain its long-term competitiveness.

A robust response is the Magna Carta of Filipino Seafarers (Republic Act 12021) which mandates maritime higher education institutions to align with Commission on Higher Education (CHED) and MARINA standards, enabling cadetship slots, access to simulators or training ships and quality onboard training.

Despite strong opposition from maritime schools, which are complaining about high compliance costs and potential enrolment caps, the law addresses European Maritime Safety Agency audit deficiencies to maintain STCW compliance and secure the Philippines’ position as a leading global seafarer supplier. Full implementation — supported by the law’s implementing rules and regulation — is critical to sustaining these reforms.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia