Quote: "Is it just me...or clients are just skimming over my applications on the assumption that I wouldn't be that great of a freelancer because I'm from the Philippines?"
It is just you and your own projection.
You are competing against many, many talented people out there and it may take some time to land a job duh!
There are many highly successful freelancers from the Philippines on oDesk, by the way.
P.S. Of course this isn't to say that there aren't clients who select based on location/nationality but in more cases I think it has to do with: a)your individual profile or application(history, portfolio), b) your bid (too high/or too low) c)fact that there are 50-60 or more candidates d) any random reason.
More than a cap though (which can be cute because it gives that geeky-Google -guy vibe) it is the fact that you are not looking at the camera.
You don't need to have photo necessarily (I don't ) but if you do, make sure that you look at the camera, not away from it(it kind of defeats the purpose of the photo, right?)
I can't see your profile but look into that as well (tests, grammar, cover letter, portfolio, etc.)