In 2004, then-president Gloria Arroyo withdrew a contingent of Filipino police and soldiers assigned to the US-led coalition in Iraq after a Filipino lorry driver was kidnapped and threatened with beheading.
The driver was released unharmed and Ms Arroyo banned all Filipinos from working in the country.
Now Filipino overseas workers, a major engine of the economy, will be allowed to return to Kurdistan but not the rest of Iraq, department of foreign affairs spokesman Raul Hernandez said in a statement.
The Philippine Overseas Employment Administration "has already lifted the deployment ban for the Kurdistan region in Iraq," he said. "Only the Kurdistan region for now."
Despite the ban, officials estimated that as many as 10,000 Filipinos continued to work in Iraq.
Nine million Filipinos, 10 per cent of the population, work overseas largely in low-skilled jobs such as maids and sailors, but also as nurses, engineers and IT specialists.
They sent US$18.17 billion (Dh66.1bn) back to the Philippines last year, equivalent to 10 per cent of the country's GDP, and are hailed as modern-day heroes by many of their countrymen for helping keep the economy afloat.