Behind many overseas Filipino workers journeys is a recruitment agency that connects them to jobs abroad. These agencies play a major role in global labour migration—but how exactly do they make money?
Government data shows that more than 1.8 million OFWs were deployed annually before the pandemic. While numbers dipped during COVID-19, deployments rebounded to over 1.5 million by 2023. Behind these figures lies a complex system that links Filipino workers to overseas employers, with recruitment agencies acting as key intermediaries.
On the surface, recruitment agencies may seem like simple connectors. In reality, they operate as businesses with specific revenue models. Understanding how they earn is not just about curiosity—it directly affects how much you pay, how you’re treated, and whether your overseas journey is smooth or filled with unnecessary hardship.
The Legal Foundation: Who Regulates Recruitment?
In the Philippines, overseas recruitment is regulated by the Department of Migrant Workers (DMW), formerly the Philippine Overseas Employment Administration (POEA). These institutions exist to protect migrant workers and ensure fair recruitment practices.
Under DMW rules, recruitment agencies cannot charge unlimited fees. Where placement fees are allowed by the host country, the maximum collection is equivalent to one month’s basic salary, excluding medical exams, training, and documentation. Many countries—such as Canada, New Zealand, and parts of Europe—operate under strict “employer pays” policies, meaning workers should not pay placement fees at all.
Licensed agencies must be registered with the DMW, post financial bonds, and comply with reporting requirements. Illegal recruiters, by contrast, operate without licences, promise high-paying jobs, and often disappear after collecting payments. Every year, thousands of Filipinos lose their savings to these schemes—making awareness essential.
How recruitment agencies earn money (legally and in practice)
Recruitment agencies generate income through several channels. While many are legal in principle, problems arise when fees are excessive or hidden.
Employer-paid recruitment fees
In many cases, foreign employers shoulder the recruitment costs. Agencies charge overseas companies for sourcing, screening, and deploying workers.
For example, a construction company in Qatar hiring 300 welders may pay thousands of dollars per worker to a Philippine agency. The agency earns, while the workers pay little to nothing beyond standard documentation costs. This model aligns with global calls for zero placement fees and is considered the most ethical approach.
Capped service fees from OFWs
In countries where worker fees are permitted, agencies may legally charge up to one month’s salary as a placement fee.
For instance, if a cleaner in Dubai earns P23,000 per month, that amount is the legal cap. Additional payments may cover medical exams, TESDA certifications, the Pre-Departure Orientation Seminar (PDOS), and the Overseas Employment Certificate (OEC). While these are legitimate requirements, agencies often bundle them and charge extra for “convenience.”
Training and upskilling programmes
Many agencies operate or partner with training centres. Caregivers bound for Taiwan or Japan may be required to take enhanced courses costing P15,000 to P30,000. Welders, drivers, and hospitality staff may also be sent to TESDA-accredited programmes.
Training itself is valuable, but agencies often earn commissions or mark-ups from these partnerships, and costs can be inflated beyond market rates.
Documentation and processing services
Agencies assist with visas, contract translation, DFA authentication, embassy processing, PDOS, and OEC issuance. While facilitation fees are allowed, problems arise when workers are unaware of actual government costs.
For example, a passport renewal may only cost P1,000, but agencies may bill several times more under vague “service fees,” without itemised receipts.
Illegal and abusive practices to watch out for
Despite regulations, abusive practices persist.
One major red flag is charging multiple months’ worth of salary as placement fees. Reports show workers paying four to six months of wages upfront—clearly illegal.
Another common scam involves fake job offers, where applicants are asked to pay “reservation” or “guaranteed slot” fees for jobs that never existed.
Overpricing medical exams and training programmes is also widespread. Some recruiters funnel applicants to partner clinics charging double the standard rate, pocketing the difference.
Perhaps the most dangerous practice is withholding passports or documents until debts are repaid. This creates debt bondage and strips workers of their freedom to withdraw, change jobs, or report abuse.
These practices are not only illegal—they are deeply exploitative.
How OFWs can protect themselves
Knowledge is your strongest defence.
Verify the agency
Check the DMW website for licensed agencies, active job orders, and records of suspensions. An agency showing its licence number alone is not enough.
Know your rights
Remember: placement fees are capped at one month’s salary—and in many countries, you should not pay placement fees at all. By reporting such actions to relevant government agencies, applicants save not only themselves but also other potential victims of overcharging employment agencies.
Demand receipts and contracts
Every payment must come with an official receipt. Never rely on verbal promises or give cash “under the table” under the guise of expedited processing or other conveniences.
Report suspicious behaviour
The DMW, POLO offices abroad, embassies, and hotlines exist to protect workers. Reporting abuse can save others from the same fate.
The Future of Recruitment Agencies
Change is already underway.
Many countries are strengthening zero placement fee policies, shifting costs entirely to employers. Government-to-government hiring schemes—such as Japan’s caregiver and technical intern programmes—reduce reliance on private agencies and improve accountability.
Digital hiring platforms and monitored online systems are also emerging, allowing workers to connect directly with employers under regulated contracts.
To survive, recruitment agencies are adapting. Many are shifting towards training, compliance support, and worker welfare services, moving away from heavy dependence on placement fees. In the long term, this could transform agencies into genuine career partners rather than gatekeepers.
Final thoughts
Recruitment agencies can be both a gateway and a risk for Filipinos seeking work abroad. Legally, they earn through employer fees, capped worker charges, training programmes, and administrative services. In practice, however, abuses still exist—from overcharging to outright scams.
As an OFW, understanding how agencies make money empowers you to spot red flags, avoid unnecessary fees, and demand fair treatment. Overseas work can be life-changing—but only if your journey begins with the right knowledge, safeguards, and choices.
Your goal is not just to leave the country for a higher-paying job abroad, but to build a safe, stable, and dignified path to opportunity.