On 27th June a series of articles were produced as part of a collaboration between the International Consortium of Investigative Journalists, Trafficking Inc. ICIJ, The Guardian, NBC News, Reuters, and other media organisations. The articles examined interviews with workers and complaint documents that name 12 licenced loan companies operating in the Philippines, filed between 2020-2021 to 10 Philippines government entities. The complaints were prepared by the Hong-Kong NGO Migrasia.

The interviews and complaints allege collusion between recruitment agencies and lenders to extract money through predatory lending and high recruitment fees from Filipino workers seeking overseas employment. The articles allege employment agencies ‘steer workers to lenders’ to enable them to pay high recruitment costs; and lenders in turn provide loans with extortionate interest rates through duplicitous contracts.

The articles also allege authorities in both destination and origin states are failing to act to tackle this exploitation, despite numerous complaints. For example, authorities have failed to follow up on complaints or issue warnings to the companies.

The articles allege several labour rights abuses of migrant workers, including the following:

• The payment of extortionate recruitment fees, ranging between $800 to $1,700
• Lending companies pressuring workers to take out loans with extremely high interest rates, with annual interest rates ranging between 61% to 578%. This exceeds the Philippines’ 8% interest rate annual legal limit.
• Lenders and recruiters hide details of the their employment and loan contracts from the migrants. They also blackmail the workers and threaten them if they either complain to government authorities or do not make the correct payments.
• Agencies and lenders withhold passports as a method of coercion and control.

The articles name several recruitment and lending companies that they allege exploited Filipino migrant workers. A&W International Manpower Services, Prosperity and Success Lending Investor Corporation, Rapid Manpower Consultants, Angelex Allied Agency, and Hoya Lending Investor Corporation all either declined to comment or did not respond to the ICIJ’s request for comment. A former director of CASH4U told ICIJ that the company was out of business but had outsourced its debt collections to an agency.

The Philippines Securities and Exchange Commission did not respond to the ICIJ’s requests for comment. The Philippine government’s Department of Migrant Workers also did not provide a response to the allegations presented to it by the ICIJ. Hong Kong’s Department of Labor told ICIJ that it “does not tolerate any exploitation or abuse” and that it assess workers’ repayment ability when taking out loans.

A Migrasia report released on the topic also found the collusion between migration intermediaries in the pre-departure stage of migration enables abuse. Their study quantitatively analyses barriers faced by Filipino workers to access information; loopholes used for exploitation; and interventions that can reduce forced labour and trafficking.

Their study explores survey responses completed by 961 randomly selected current and former Filipino migrant workers who completed their pre-departure migration phase within the last five years using an employment agency. The report finds:

• Many of the workers reported a restricted ability to freely choose an employment agency, such as due to a lack of time or money, or having their documents confiscated by the agency.
• Employment agencies instruct migrant workers to use specific intermediaries such as medical clinics or money lenders via exclusive and pressurised referrals. For example, nearly a quarter of respondents were required or pressured to use a specific money provider by their employment agency who they used to pay migration costs.
• Migrant workers are taking on significant debt to finance their move. For example, roughly a third of respondents took on debt that was larger than their annual household income.
• Migrant workers are misinformed about laws/regulations relating to illicit practices conducted by intermediaries. Further, migration intermediaries may be spreading misinformation.

The report makes a number of recommendations to governments and NGOs, including ensuring information that prevents illegal recruitment is available online and is disseminated; improving the monitoring of referrals to migration intermediaries by employment agencies; and adopting a dual strategy of online-offline support, among other recommendations.