In the Philippines, the Philippine Overseas Employment Administration (POEA) processes overseas employment of Filipino seafarers and issues an overseas employment certificate to each seafarer deployed overseas. As this is a prerequisite, the information collated by POEA should represent an accurate picture of the demand for Filipino seafarers in the market. Table 1 shows the numbers of Filipino seafarers deployed internationally between 2010 and 2017 as collated and released by POEA.Footnote 2 This data clearly indicates that the Manpower Report significantly underestimated the supply of Filipino officers. While the Manpower Report (BIMCO/ICS 2015) estimated a supply of 72,500 Filipino officers in 2015, in reality, a total number of 93,992 Filipino officers were deployed in that year (21,492 more than the BIMCO/ICS estimation). Were these extra Filipino 21,492 officers alone taken into account, the shortage of 16,500 officers as indicated in the Manpower Report would change to an oversupply of 4992.
It is worth noting that Table 1 shows deployment figures, and that deployment is not the same as supply. There are three scenarios. First, when the supply and demand are in balance, the number of deployments equals that of supply as well as that of demand. Second, when there is a shortage in supply, all the supply would be deployed; and in this case, the supply would be the same as the deployment. In the third scenario when there is an oversupply, however, the number of deployments reflects the actual demand; as the demand is limited, the total supply would be more than the number of deployment.
To find out which scenario Filipino officers are in, it is necessary to bring in the second set of data, Filipino marine officer Certificate of Competency (CoC) examination statistics released by the Maritime Industry Authority (MARINA) of the Philippines. Table 2 shows that from 2015 to 2017, a total number of 21,246 Filipino seafarers acquired an Officer in Charge of Navigational Watch (OIC-NW) CoC and another 12,650 obtained an Officer in Charge of an Engineering Watch (OIC-EW) CoC. These were new blood into the supply of officers. It is worth mentioning that officers with an OIC-NW CoC or an OIC-EW CoC can only serve as junior officers. To be able to serve as a senior officer, they need to take further training and exams to acquire a higher level CoC. As POEA’s deployment statistics lump officers together without detailed information on each rank, the deployed officers can be seen as one group regardless of their ranks. Every year, there are some officers exiting the group and new officers joining in. Assuming the supply and demand for officers in Year y are in balance (i.e. all the supplies are deployed), in Year y + 1 attrition inevitably occurs as some officers exit this group. At the same time, the deployment in Year y + 1 may also expand due to an increase in demand. As such, the newly certified officers would be deployed to (1) replace those who exited the group and (2) fill the officer positions newly created. This is not the say that a newly certified junior officer can replace a senior officer or fill a newly created senior officer position. It simply means that when a senior officer position is created, one of the officers in the next rank who is suitably qualified would be promoted to fill it, which leaves a position to be filled by an officer in the next rank. This in the end opens a position for a newly certified officer. Therefore, in this process, while those who exit the group are in various ranks, the newly joined ones are the newly certified. Based on the above discussion, the equation below can be applied to estimate how many of the newly certified are deployed in Year y + 1:
Table 2 Number of Filipino marine officer CoC examination passers 2015–2017 Assuming the supply and demand for officers in Year y are in balance:
$${\mathrm{NDP}}_{y+1}={A}^{*}{\mathrm{DP}}_{y}+\left({\mathrm{DP}}_{y+1}-{\mathrm{DP}}_{y}\right)$$
where NDPy+1 is the number of newly deployed officers in Year y + 1; A indicates the attrition rate; DPy represents the number of deployed officers in Year y and DPy+1 represents the number of deployed officers in Year y + 1.
It is worth noting that in some cases, the value of DPy+1 may be smaller than that of DPy, indicating that the deployment decreased in Year y + 1 as compared with that in Year y. Theoretically, an extreme case is that DPy+1 is zero. This gives NDPy+1 a negative value. It means that in this case, except for those who have left the profession, the remaining officers deployed in Year y become un-deployed in Year y + 1.
The only unknown factor on the right side of the equation is the attrition rate A. Based on the questionnaire survey data from shipping companies, BIMCO/ICS (2015) reported that the attrition rate of employed seafarer officers in 2015 was estimated to be around 2.3 to 2.4%. On this basis, the annual attrition rate A is set at 2.5% in this paper. Calculated with the figures in Table 1, the numbers of newly deployed officers in 2015, 2016 and 2017 would be 2648, 8963 and 2095 respectively (see Table 3). Thus, in the 3 years, the total demand for new officers was 13,706, but the number of the newly certified amounted to 33,896. This indicates an oversupply of 20,190 officers (about 60% of the newly certified) in the 3 years from 2015 to 2017, based on the assumption that the demand and supply were in balance in 2014. When a large proportion of the newly certified officers were not deployed as officers between 2015 and 2017, however, it was likely to be the case that many of the newly certified Filipino officers were in a similar situation before and in 2014. Those surplus seafarers were likely to be employed as ratings, though holding CoCs.
Table 3 Supply and deployment of newly certified Filipino officers 2015–2017 The figures of oversupply as shown in Table 3 are staggering. Though not officially released by the POEA, The Manila Times reported that Filipino seafarer deployment in 2018 hit 337,502, 111,961 lower as compared with the figure of 449,463 in 2017 (Ayeng 2019). Even though a separate figure of officer deployment was not provided, it is reasonable to assume that tens and thousands of Filipino officers lost employment in 2018. This further added to the problem of oversupply.
The oversupply calculated above is only about Filipino officers. However, the seafarer labour market is a global one into which Filipino seafarers have long been well integrated. If there were a shortage elsewhere in the world, it would be unlikely that ship managers fail to notice the abundant supply of Filipino officers. Therefore, the demand/supply situation of Filipino officers is likely to reflect that of the officers globally.
When BIMCO/ICS reported a shortage of officers, it was perceived that recruitment was a problem. Regarding Filipino seafarers, however, this was not an issue. Table 4 shows that a large number of students enrolled in Bachelor of Science in Marine Transportation (BSMT) and Bachelor of Science in Marine Engineering (BSMarT) programmes for deck and engine cadet training in the Philippines. On average, the number of enrolled students each year during the 2011–2015 period was about 160,000. As the degree courses take 4 years to complete, the newly enrolled per year would be more than 40,000. However, it was reported that less than 20% of them were able to complete their training (Mendoza and Valenzuela 2017). One major reason for this was that they could not secure a training berth for shipboard training.Footnote 3 Thus, at the training stage, a severe lack of demand has prematurely terminated the aspirations of a large number of students to become seafarer officers.
Table 4 Number of enrolled MET students in the Philippines 2011–2015