i have a previous helper who did exactly as rani has said. but yes, keeping their passport is illegal, BUT that is still what agents are recommending. my previous helper (she was fired after a long episode, this was just 3 months ago) lied and told us that she needed her passport to apply for some filipino document, we gave it to her as it is illegal afterall to keep her passport.
she ended up borrowing 10's of thousands of dollars, AND on top of that because lending agencies won't lend her so much, she managed to have loans under ALL of my extended families' maids (my other maid, my mom's maid, my grandmother's maid), it's really crazy, she didn't even need their passport to do that, just their names, info and consent. she has outstanding loans when we fired her, and we ended up having to repaid part of her loans, especially the ones involving the maids we know. a lot of them will do things like that when their 'friends' as them to help them borrow.
still, i'm not that uptight about keeping their passports, but would like to share, so people would understand where the risks are if you don't do that.