people, profit, and politics - state-civil society relations in the context of globalization

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Published in cooperation with theUnited Nations Development Programme-Philippine Office

Third World Studies CenterCollege of Social Sciences and PhilosophyUniversity of the PhilippinesDiliman, Quezon City

Ma. Glenda S. Lopez Wui is assistant professor at the Faculty of Education,University of the Philippines (UP)-Open University, and formerly universityresearcher and deputy director of the UP Third World Studies Center (TWSC).Teresa S. Encarnacion Tadem is associate professor at the Department of PoliticalScience, UP Diliman, and director of the UP TWSC. Sharon Quinsaat is universityresearcher at the UP TWSC. Joel F. Ariate Jr. is university research associate at theUP TWSC. Ronald C. Molmisa is a fellow and formerly university research associateat the UP TWSC.

Third World Studies CenterCollege of Social Sciences and PhilosophyPalma Hall BasementP.O. Box 210University of the PhilippinesDiliman, Quezon City 1101PhilippinesPhones: +63 2 981 8500 ext. 2442Telefax: +63 2 920 5428Mobile: +63 926 710 2926Email: uptwsc@ gmail.comURL: http://www.upd.edu.ph/~twsc

© 2006 by the UP Third World Studies CenterAll rights reserved. No copies can be made in part or in whole without prior writtenpermission from the publisher.

Published 2006

ISBN 971-91246-4-4

The UP Third World Studies Center gratefully acknowledges the financial supportgiven by the United Nations Development Programme-Philippine Office in theresearch for and publication of this book.

Printed in the Philippines by CORASIA Inc.

ContentsContentsContentsContentsContents

List of Acronyms vii

ForewordWalden Bello xv

Preface xvii

IntroductionTeresa S. Encarnacion Tadem 1

Mobilizing against Vegetable ImportationSharon M. Quinsaat 19

Protests and Perceived Threats in the Hog IndustryJoel F. Ariate Jr. 73

Confronting the Challenges in the Garment IndustryMa. Glenda S. Lopez Wui 111

Balancing Consumer and Corporate Interestsin the Telecommunications Industry

Ronald C. Molmisa 155

Conclusion: Palliatives for “Globalization with a Human Face”Teresa S. Encarnacion Tadem 197

Index 229

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vi People, Profit, and Politics

Introduction vii

List of AcronymsList of AcronymsList of AcronymsList of AcronymsList of Acronyms

ACEF Agricultural Competitiveness Enhancement FundAFMA Agriculture and Fisheries Modernization ActAFTA ASEAN Free Trade AgreementALERT Alliance of Legislators against Regressive TaxesALMAGATE Alyansa ng Manggagawa sa Garment at Textile

(Garment and Textile Workers’ Alliance)ALU-TUCP Associated Labor Unions of the Trade Union Congress of

the PhilippinesAoA Agreement on AgricultureAPEC Asia-Pacific Economic CooperationAPIT-TAKO Alyansa Dagiti Pesante iti Taeng Kordilyera

(Alliance of Peasants in the Cordillera Homeland)APL Alliance of Progressive LaborASAP Agricultural Sector Alliance of the PhilippinesASEAN Association of Southeast Asian NationsBAI Bureau of Animal IndustryBAS Bureau of Agricultural StatisticsBAYAN Bagong Alyansang Makabayan

(New Patriotic Movement)BFFI Benguet Farmers’ Federation IncorporatedBLES Bureau of Labor and Employment StatisticsBMP Bukluran ng Manggagawang Pilipino

(Philippines Workers Solidarity)BoC Bureau of CustomsBoT Bureau of TelecommunicationsBPI Bureau of Plant IndustryCAR Cordillera Administrative Region

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viii People, Profit, and Politics

CEGP College Editors Guild of the PhilippinesCEPT Common Effective Preferential TariffCICT Commission on Information and Communications

TechnologyCMTS cellular mobile telephone systemCOCAFM Congressional Oversight Committee on Agriculture and

Fisheries ModernizationCPA Cordillera Peoples AllianceCPU Computer Professionals UnionCSOs civil-society organizationsCTITC Clothing and Textile Industry Tripartite CouncilCURE Connectivity Unlimited Resources Inc.DA Department of AgricultureDICT Department of Information and Communication

TechnologyDOLE Department of Labor and EmploymentDOST Department of Science and TechnologyDOTC Department of Transportation and CommunicationsDTI Department of Trade and IndustryEO executive orderEPZ export processing zoneEVAT expanded value-added taxFFW Federation of Free WorkersFLAG Free Legal Assistance GroupFMA Foundation for Media AlternativesFMD foot-and-mouth diseaseFTA Fair Trade AllianceGARTEX Garment, Textile and Allied Industries Labor CouncilGATT General Agreement on Tariffs and TradeGATT-UR GATT-Uruguay RoundGDP gross domestic productGSM global system for mobile communicationsGTEB Garment and Textile Export BoardHR House ResolutionILO International Labor OrganizationIMEI International Mobile Equipment Identity

List of Acronyms ix

INGO international nongovernment organizationIPRA Indigenous Peoples Rights ActISM industrial, scientific and medicalITECC Information Technology and Electronic Commerce

CouncilITGLWF International Textile, Garment and Leather Workers’

FederationITU International Telecommunication UnionKMP Kilusang Magbubukid ng Pilipinas

(Peasant Movement of the Philippines)KMU Kilusang Mayo Uno

(May First Movement)KPD Kilusan para sa Pambansang Demokrasya

(Movement for National Democracy)LDC Livestock Development CouncilLGU local government unitMAV minimum access volumeMFA Multi-Fiber ArrangementMFN most-favored nationMHDAP Meat and Hog Dealers Association of the PhilippinesMMS multimedia messaging systemMOP margins of preferenceMTPDP Medium-Term Philippine Development PlanMTPO Municipal Telephone Projects OfficeNCL National Confederation of LaborNCRFW National Commission on the Role of Filipino WomenNEDA National Economic and Development AuthorityNFHFI National Federation of Hog Farmers Inc.NFHR National Federation of Hog RaisersNGO nongovernment organizationNHRGI National Hog Raisers Group Inc.NMIC National Meat Inspection CommissionNSCB National Statistical Coordination BoardNSO National Statistics OfficeNTC National Telecommunications CommissionNTDC National Telecommunications Development Committee

x People, Profit, and Politics

NTDP National Telecommunications Development PlanNUSP National Union of Students of the PhilippinesPABI Philippine Association of Broiler IntegratorsPag-IBIG Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya

at Gobyerno(Helping Each Other for the Future: You, the Bank, theIndustry and the Government)

PAHRI Philippine Association of Hog Raisers Inc.PAMPI Philippine Association of Meat Processors Inc.PAPTELCO Philippine Association of Private Telephone Companies

Inc.PBOs private business organizationsPCGG Philippine Commission on Good GovernmentPCTA Philippine Cable Television Association Inc.PCTO Philippine Chamber of Telecommunication OperatorsPETEF Philippine Electronics and Telecommunications

Federation Inc.PEZA Philippine Economic Zone AuthorityPIDS Philippine Institute for Development StudiesPISO Philippine Internet Services OrganizationPLDT Philippine Long Distance Telephone CompanyPLDTi Philippine League for Democratic Telecommunications

Inc.PPI Philippine Peasant InstitutePSTN public switched telephone networkPTEs public telecommunication entitiesPTI permit to importPUMALAG Pambansang Ugnayan ng Mamamayan Laban sa

Liberalisasyon ng Agrikultura (NationalNetwork of Citizens against Agricultural Liberalization)

QR quantitative restrictionRA Republic ActSAC Social Action CenterSAI Social Accountability InternationalSAS Service Area SchemeSEC Securities and Exchange Commission

List of Acronyms xi

SIM Subscriber Identity ModuleSMS Short Message SystemSNR Stop the New Round Coalition-PhilippinesSOAP Slaughterhouse Operators Association of the PhilippinesSSS Social Security SystemSwIN Swine Information NetworkTELOF Telecommunications OfficeTESDA Technical Eduction and Skills Development AuthorityTRM tariff-related mattersTRP Tariff Reform ProgramTUCP Trade Union Congress of the PhilippinesTUGP Telecommunication Users Group of the PhilippinesUNFAO United Nations Food and Agriculture OrganizationsVAS value-added serviceVoIP voice over Internet protocolWB World BankWRAP Worldwide Responsible Apparel ProductionWSIS World Summit on the Information SocietyWTO World Trade Organization

ForewordForewordForewordForewordForewordWalden Bello

xiii

People, Profit, and Politics is an excellent collection of studies thatlooks at how civil-society organizations in economic sectors subjectedto trade liberalization and deregulation have mobilized to defend

their interests within a liberal democratic state. The picture that emergesis both reassuring and disconcerting.

Reassuring in that civil-society organizations can easily establishpolitical spaces or beachheads from which to exert pressure on key politicalactors in the executive or in parliament. Reassuring, too, in that there is agreat space for coalition building with many other interest groups facingthe challenge of globalization.

But disconcerting in that no amount of skilled mobilizing and coalitionbuilding appears to have been able to save key groups, such as the Benguetvegetable producers and textile and garment workers, from massivedislocation brought about by cheap imports or capital flight. Active lobbyingby hog raisers appear to have mainly bought them time, not eliminate thethreat of ruinous competition from cheap imports.

The picture of the Philippine state that emerges is one that allowssignificant space for pressure groups opposed to liberalization, to the pointwhere key actors within both the bureaucracy and parliament can, in fact,be mobilized as allies. And yet, when push comes to shove, liberalizationwins out. What emerges is a resilient state that can entertain opposition,but where the ideology of neoliberalism so permeates the bureaucracy andthe legislature that it can override the coalitions and coalition formations

xiv People, Profit, and Politics

that the threatened sectors can put together. While there certainly is adomestic pro-liberalization lobby, and the World Trade Organization(WTO) and the International Monetary Fund (IMF) are important pressuregroups, it seems to be the case that the adoption of trade liberalizationpolicies owes more to ideological belief among key policymakers and electedofficials than to the organized political clout of these actors.

Thus what we have, at least in the case of economic policies, is a perfectexample of what Gramsci termed “consensus,” in this case, neoliberalconsensus, as the driver of policy. What this seems to indicate is that forproducers, the key to winning the battle is not a superior organizingcapability but drawing up an alternative paradigm that is more convincingthan neoliberalism. This will be no easy task. As many have pointed out,the overwhelming empirical evidence after 25 years of acceleratedliberalization, both in the Philippines and globally, shows that it has beenaccompanied by growing poverty, inequality, and stagnation, even as state-led protected systems such as Korea and China have progressed by leapsand bounds. Despite this, neoliberalism remains as entrenched as ever inthe higher rungs of the economic bureaucracies of the Philippine state.

This is, of course, just one lesson that one draws from the case studiesof this book. There are other dimensions of the state-civil society relationshipin the Philippines that are illuminated here. The authors and editors areto be congratulated for bringing out an indispensable guide to the topic.

Walden BelloProfessor of Sociology

University of the PhilippinesDiliman, Quezon City

Philippines

Introduction xv

PrefacePrefacePrefacePrefacePreface

The idea for this book was conceived way back in 2003 when thethen-director of the Third World Studies Center (TWSC), MiriamCoronel Ferrer, invited the case authors for a brainstorming session

to prepare a research proposal on the topic “state-civil society relations inthe context of globalization.” The research project would be a fitting follow-up to the just completed TWSC research on “Philippine Civil Society andthe Globalization Discourse” (which was subsequently published as a book),and the Center’s previous researches examining the potential of Philippinecivil society as agent of democratization. It was also pointed out in thesession that a research on the topic is significant because at that time nostudy has been conducted yet on the nature of interaction between thestate and civil-society actors in an environment shaped by globalization.Existing studies only deal with the broad effects of economic globalizationon different sectors of the Philippine economy. The writers decided tofocus the study on sectors perceived to be widely affected by globalization:the vegetable, hog, garment, and telecommunications. A research proposalwas then submitted to the United Nations Development Programme(UNDP), which agreed to fund the conduct of the research in 2004, andthe publication of the output in 2005.

This project would not have been possible without the assistance ofvarious individuals and institutions. We like to thank the UNDP for thefinancial assistance, and its program manager for governance unit,Emmanuel Buendia, for his support of TWSC researches. The Social Sciencesand Philosophy Research Foundation (SSPRF) was also on hand to managethe research and publication funds.

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xvi People, Profit, and Politics

During the research phase, we like to express our gratitude to a numberof individuals who helped us complete this stage of the project. Our thanksgo to Virgilio Salentes, secretariat head of UNDP’s Governance Portfolio,whose office approved our research proposal for funding.

We are indebted to our project consultants whose comments andcriticisms helped sharpen the analyses and overall quality of the casestudies. Aside from commenting on the drafts of the cases, they alsohelped refine some conceptual and methodological aspects of the project,like improving the research questions, interview guide, and selection ofrespondents. The consultants are: Riza Bernabe for the vegetableindustry, Teodoro Mendoza for the hog industry; Rosalinda Pineda-Ofreneo for the garment industry, and Alan Alegre for thetelecommunications industry. Some of the case studies were also shownto the following for additional reviews: William Padojinog, ErwinAlampay, Florian Alburo, and Rowena Boquiren.

We were also fortunate to have with us two very reliable researchassistants, Zuraida Mae Cabilo and Sarah Jane Domingo, who were alwaysavailable for us even on short notice despite the demands of their graduatestudies.

For the publication phase of the project, we like to thank the staff ofUNDP’s Project Management Office for facilitating the release of ourpublication funds.

Our thanks go to the reviewers of the book manuscript, Jose Magadiaand Cielito Habito, for sharing with us their expertise on Philippine civilsociety and economy, respectively. They helped clarify crucial points inthe manuscript that would have been overlooked if it were not for theircomments.

We also thank the book’s editorial consultant and supervisor, LauraSamson, and her team (Jocelyn de Jesus, Nestor De Guzman, Veni Ilowa,and Dezh David) for making our manuscript measure up to publicationstandards. The ever reliable staff of the TWSC—Caring Francisco, BienLacsamana, Tess Lubang, and Erning Francisco—were always on hand toassist us in all the stages of the project.

Preface xvii

Lastly, we express our heartfelt gratitude to all the respondents of thecase studies for taking the time off from their busy schedules toaccommodate our requests for interviews and for sending us feedback onthe drafts of the case studies.

Ma. Glenda S. Lopez WuiTeresa S. Encarnacion Tadem

February 2006

IntroductionIntroductionIntroductionIntroductionIntroductionTeresa S. Encarnacion Tadem

This research project on state-civil society relations in the contextof globalization analyzes the relations between the Philippine stateand selected civil-society actors in the context of globalization.

It focuses on four sectors: the Benguet vegetable, hog, garment, andtelecommunications industries. These sectors are widely known to havebeen affected by economic liberalization—negatively in the case of thefirst three, and positively in the case of the telecommunications industry.The project investigates two interrelated aspects of state-civil societyrelations: 1) how civil-society actors engage with official state agenciesthrough various formal and informal strategies of dialogue, negotiation,and bargaining; and 2) the extent to which civil-society actors havebeen able to influence governmental policy making.

These concerns come in light of studies showing the importance ofthe role of a strong and effective civil society as one of the major factorsin furthering development and democracy. While this study does notassume that a strong civil society is automatically beneficial todevelopment, it is predicated on the view that civil-society participationand inputs can make a positive contribution to the policy-makingprocess.

In the academic literature, for example, it is generally accepted thatthere is some kind of relationship between economic development and thekinds of participatory democracy signaled by the proactive role of civilsociety. Some analysts claim that there is a strong association between the

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2 People, Profit, and Politics

two; others assert that they exhibit a positive linear relationship, while stillothers claim this relationship is indeed causal (see Przeworski et al. 2000for a comprehensive discussion; Sen 2000; Bensabat-Kleinberg and Clark2000).

These academic claims are also substantiated in the policy statementsof major international development agencies. There is a near-universalacceptance by agencies such as the World Bank, the Asian DevelopmentBank, bilateral donors, and the United Nations Development Programme(UNDP) that democratic forms of policy making and civil-societyparticipation are integral to effective decision making. Above all, each ofthese agencies now subscribes to the notion that stakeholders andbeneficiaries should participate in all stages of the policy and project cycle.The UNDP, for example, has long been explicit on this point: it suggeststhat stakeholder participation and the role of civil society are crucial inshaping the political and governance contexts in which policy is made andimplemented (UNDP 1993). The creation, in 2000, of the UNDP Bureaufor Resources and Strategic Partnerships to coordinate and nurture UNDP’sworking relationships with civil-society organizations, among others, addsinstitutional weight to the participatory approach. Finally, the UNDP bookPartners in Human Development: UNDP and Civil Society Organizations(2003) suggests important ways to operationalize the partnership amongthe international community, states, and civil society.

Beyond these general statements of principle about state-civil societyrelations and participatory approaches to development and goodgovernance, what is needed is a much more empirically grounded researchthat can reveal not simply the presence (or absence) of civil-society actorsin policy dialogue but precisely how civil-society actors negotiate and bargainto open up greater political and policy space and the substance of thepolicy outcomes of such engagement. The need, therefore, is for anassessment of state-civil society relations both as a means (the context inwhich policy is negotiated, shaped, and set) and as an end (theimplementation, monitoring, and adaptation of more effective policy).

That the Philippines provides the setting for the study, particularly in

Introduction 3

looking at the dynamics of state-civil society engagement in a time ofdemocracy, is also significant, even crucial. As pointed out by Cielito Habito(2005)

This is the country that has been acknowledged to have among the most, if notthe most, vibrant civil society movements around the globe, and especiallywithin the Asia-Pacific region. It is also a country wherein a relatively widevariety of avenues for civil society engagement with the state have beenmade available, especially after the overthrow of the Marcos dictatorshipwith the EDSA People Power Revolution. Thus, a similar study focused onanother country probably would not have been [as] rich and substantive.

Habito, however, notes that “this uniqueness in the Philippine situationcould also be its handicap in the sense that it may limit the study’s potentialaudience, as the wide applicability of its observations and findings may beopen to question”:

One may argue that the vibrancy of Philippine civil society and the widevariety in modes of state-civil society engagement opportunities present inthe country in a way make it a standard to which others may aspire, and akind of yardstick with which other countries’ situations and experiencesmay be assessed. (Habito 2005)

Defining Civil SocietyDefining Civil SocietyDefining Civil SocietyDefining Civil SocietyDefining Civil Society

Civil society is generally identified with the “private” sphere of thecapitalist market, which is to be distinguished from the “public” domainof the state (Colas 2002, 14). It consists of non-state actors and theseinclude the private sector. Civil-society players or organizations (CSOs)are considered part of social movements comprising amorphous and fluidgroups in which the bonds are common grievances or conviction, andshared goals for societal and policy change (rather than structures). Theyconnect people with causes through developing communities of interestsaround shared conditions (Clark 2003, 4). Their relevance is seen in thelight of non-state actors as “crucial determinants of state policies, whetherdomestic or foreign.” Of importance is that the real change is in the breadth


of the social interests represented by CSOs, which has witnessed a movetoward democratization that is both domestic and international (Uvin 2000,17-18).

CSOs can be categorized. One category of CSO is engaged in voluntaryorganizing, which is primarily devoted to promoting policy change throughpublic education, direct lobbying, policy research, and so on. Distinction,however, is made between a profit CSO and a nonprofit one. The formerincludes chambers of commerce and producers’ associations. The latterperforms its tasks out of a sense of the general interests, e.g., environmentalorganizations (Uvin 2000, 12). Nonprofit CSOs are also defined asnongovernment organizations (NGOs), which are considered as key playersin social movements

that do grassroots support and advocacy work. They are intermediaryorganizations in contrast to membership groups with relatively defined socialconstitutions. They, therefore, do not directly represent the grassrootsconstituencies they attempt to serve. (Fox and Brown 1998, 21)

Some would consider this a second category of nonprofit CSOs—the voluntary organizations that seek to promote change, also referredto as intermediary organizations or grassroots support organizations(Uvin 2000, 11-12). A subcategory here is the so-called internationalNGOs (INGOs), which refers to organizations that are located in oneor more rich countries and seek to promote social and economic changein Third World countries (Uvin 2000, 12). A third category of nonprofitCSOs is people’s organizations (POs)—NGOs whose members belongto the same community they are serving. They also generally consist ofmember organizations composed of people seeking to advance theirown community interests, e.g., peasant associations (Uvin 2000, 11).What also emerges here is the phenomenon of CSO networks in whichthere is no single organization or center for decision making and oftennot even any formal process. In this situation, cooperation isnonhierarchical, informal, and often temporary and issue-specific (Uvin2000, 12).

Introduction 5

Defining Global izationDefining Global izationDefining Global izationDefining Global izationDefining Global ization

The other important concern of this research is globalization, which is“the rapidly expanding process through which societies are connecting toeach other through markets and new technology” (Grugel 2004, 29-30).Social-movement scholars have pointed out that globalization is not a newphenomenon. While “the world economy had interlocking trade andinvestment patterns as early as the 19th century,” what distinguishes today’sglobal economy is its neoliberal character, which structures contemporarytransnational content (Ayres 2002, 191). Proponents of neoliberalism arguethat there should be no government intervention with market forces foreconomic growth to occur. This is because the neoliberal economic theoryasserts that “the law of free markets is sufficient regulation for an economyseeking to find sustainable income flows and thus distributes revenues tothe most needy segments of society” (Peters 2000, 6). The view is thatpremium must be placed on trade liberalization and the unfettered entryof foreign investments into any country. Second, globalization with itsemphasis on a free-market economy and privatization seeks to minimizethe role of the state. By doing so, it hopes to put an end to the inefficiencyand corruption that has plagued state-dominated economies as epitomizedby capitalist authoritarian states as well as socialist authoritarian states.Another tenet of globalization is trade liberalization and the opening upof the economy to foreign investors.

Critics, however, have pointed out that such a setup does not create apolitical opportunity for long-term development. Investors, for example,can easily fly out of the host country when the latter ceases to providethem optimum environment for capital accumulation. Moreover, emphasison export would give less attention to the development of a domestic massfollowing for local products. Although the emphasis on export could createmore employment for the local workforce because of bigger markets abroad,problems nonetheless arise if importing countries begin to tap other sourcesoffering better-quality goods at lower prices. The other critique concernsthe class bias of globalization—that is, against the poor. This is becauseglobalization has intensified economic, social, and political inequalities by


privileging the private over the public sphere and by marginalizing theactual, as well as the potential, importance of the commons (Thomas 1997,6). As noted by its critics, globalization has resulted in the rich countriesgrowing richer and the poor countries becoming poorer; within the countryitself, the rich are getting richer and the poor are getting poorer. Such areality has been a major criticism of the neoliberal development policywhereby “20 years of liberalization of the world economy has not led tothe generous trickle-down that they have predicted, either in absolute orin relative terms” (Wilkin 1997, 28). These inequalities are furtherperpetuated because globalization allows the private sector, e.g.,multinational corporations (MNCs), to have unfettered access to themarkets of a developing country. Because of this, there is a real likelihoodthat there will be a contraction of wealth that is heavily skewed in favor ofthe wealthiest sections of developing countries (Serrano 2001, 9). Andlastly, creating a favorable environment for foreign investors is oftentranslated to the repression of workers’ wages.

Besides the class bias of globalization, the other issue is concernedwith the quality of life that this economic phenomenon is promoting.Critics argue that globalization has brought about a rapid developmentthat threatens the quality of life, and the absence of gender equality despitethe growth in the number of working women (Peters 2000). This stage ofcapitalism is also accused of degrading the environment (Callinicos 2001,116). It also does not help much that the agents of globalization such asthe World Trade Organization (WTO) have accelerated globalizationwithout social control. The perpetuation of undemocratic WTO rules andprocedures, which have marginalized the majority of the world’s peoplewho must live with the instability and social degradation (Tabb 2001,191). Related to this is the critique of the loss of state control of the economy.The market-based solution, for example, is seen in the bigger context ofglobalization’s integrating a national economy into the world’s globalizedfree markets. This thus brings about a situation whereby states are left tohave very little control of their economies as seen during the Asian financialcrisis (Peters 2000).

Introduction 7

State-Civi l Society EngagementState-Civi l Society EngagementState-Civi l Society EngagementState-Civi l Society EngagementState-Civi l Society Engagementin a Period of Globalizationin a Period of Globalizationin a Period of Globalizationin a Period of Globalizationin a Period of Globalization

Taking into consideration the pros and cons of globalization, thisresearch looks into how this economic phenomenon has affected state-civil society engagement in the Philippines. Although there are existingstudies on the broad effects of economic globalization on different sectorsof the Philippine economy, to date no research has focused on the natureof interaction that takes place between the state and civil-society actorswithin an environment shaped by globalization. Further, little analysis hasbeen undertaken on the implications of this engagement for developmentpolicy outcomes and raising the standards of governance (includingtransparency, accountability, and responsiveness). The research, therefore,attempts to fill these gaps. A systematic study on how civil-society groupsengage the state could yield valuable lessons—both for the civil-societycommunity in its advocacy and for the government in its policy-makingresponsibilities, and for both state and civil society in their developmentpartnership. This would include the identification of the circumstancesunder which broader and more effective participation in the decision-making process is achieved, as well as when it is not. It would also help toclarify areas for possible reforms, especially in relation to the developmentaloutcomes arising from economic liberalization in specific sectors.

Such an engagement is also defined by the manner in which membersof civil society situate themselves. There are NGOs, for example, that arepromoters of neoliberalism. That is, they work with “large sums from theWorld Bank, the US Agency for International Development (USAID),and other international and state funding agencies on a ‘subcontracted’basis to undermine national comprehensive welfare institutions” (Petras2003, 141). There are NGOs, however, that are considered reformists asthey “receive middle-range funding from private social democraticfoundations and progressive local or regional governments to fundameliorative projects and to correct the excesses of the free market. Thereformists try to ‘reform’ the WTO, IMF and World Bank and regulatecapital” (Petras 2003, 142). And lastly, there are radical NGOs, which


believe that basic structural changes from below, e.g., redistribution ofpower, property and income, are necessary to achieve sustained developmentand social justice (Petras 2003, 143). In all these, the interaction betweensocial movements of civil society and the institutions of global governanceis still mediated through the structure of the state. The interesting questionin this context, therefore, “is not so much if state sovereignty is disappearingin the face of globalization, but rather how is the relationship betweenstate and civil society being shaped internationally under the pressures ofglobalization” (Colas 2002, 139).

Moreover, the engagement is also determined by the manner inwhich the global process has shaped both domestic and transnationalmobilization of civil society. This is because global processes producesimilar responses by movements in different contexts by structuringcommon transnational threats or opportunities. Second, global pressureshave also produced similar opportunity structures for collective actionin different national contexts (Smith and Johnston 2002, 3).“Transnational actors become more relevant as they organize to addressgrievances of global character and to take advantage of parallel state-level organized groups like Amnesty International … [Transnationalactors] can readily advance a common political strategy that targetsmultiple national governments” (Smith and Johnston 2002, 3). Third,cross-national movements have also been identified as due to thediffusion processes whereby there emerge globally defined targets orsources of grievances brought about by the structural affinity amongstates. A proponent of this is Marco Giugni who points out thattransnational diffusion is also a crucial process for explaining commonideologies and tactics across differing national movements (Smith andJohnston 2002, 3).

Globalization also brings with it an expanded array of politicalinstitutions that create both opportunity and constraints for activity. Notonly do global institutions have distinguished effects on activists’ politicalstrategies and opportunities; they also shape the ways that social movementactors relate to each other (Smith and Johnston 2002, 9). A phenomenon

Introduction 9

that has also emerged are global civil societies, which operate at theinternational level. Because of this, “many studies of transnationalassociations and political contention implicitly or explicitly argue that globalprocesses are creating an expanded web of interdependence among states,thereby nesting national institutions within a broader, global framework ofinterest and obligations” (Smith and Johnston 2002, 7).

Propositions on Civil Society-State Engagement

In determining the role which civil society would like the state to playin an era of globalization, a number of proposals have been put forward.There are those who argue that governments should not divest themselveswholly of the provision of essential services such as health and education.By maintaining a strong presence in civil society, government can stillexercise some influence over the vagaries attendant to a free-marketeconomy (Peters 2000). There is also a need to create conditions for marketsthat empower the impoverished and in the process respond to localdemands. Furthermore, “governments should be encouraged to take a moreactive role in the regulation of markets as a means of ensuring that thosewho are most vulnerable to fluctuations in financial markets, particularlythose who are living in poverty, can be assured of some means of protectionby a state committed to principles of equity, democracy, and sustainability”(Peters 2000, 6-7).

Civil Society and State Engagementand the Specific Sectors

Another dimension introduced by this study in state-civil societyrelations in a time of globalization is the empirical focus. In highlightingfour sectors—the Benguet vegetable, hog, garment, andtelecommunications industries—which have been both positively andnegatively affected by economic liberalization, the research is predicatedon the assumption that some form of state-civil society engagement isboth necessary and desirable if the new context for policy making—globalization—is to be “managed” or “governed” in ways that minimize


its downside effects and maximize its developmental potential. In thePhilippine context, there are built-in mechanisms and venues in thethree branches of government (executive, legislative, and judiciary)where civil-society actors can formally engage the state to negotiatepolicy reforms that address specific concerns. Civil-society groups canengage Congress in the enactment of laws; they can also engage theexecutive branch in the implementation and enforcement of the lawsand the formulation of other programs and policies. They can alsoappeal to the judiciary for the interpretation of laws and redress ofgrievances. Likewise, summits, dialogues, and other fora as well astripartite and multisectoral councils have been made available to civil-society actors where they can sit and conduct dialogue with state actors.These are all part of the general drive to enhance the transparency ofgovernmental decision making. It is also the case that, beyond these formalchannels, much of the quality of state-civil society relations is determinedinformally through flexible policy networks that are also present in processesof lobbying, bargaining, policy shaping, policy setting, and policy change.The research seeks to understand the precise nature of these formal andinformal state-civil society relations along a spectrum of engagement,ranging from inclusion through accommodation to exclusion, and seeksto account for these different modalities.

A third dimension of the research examines the specificities of policyoutcomes through an analysis of these four sectors. The rationale forchoosing them is twofold. First, each of these sectors of the Philippineeconomy, with the exception of the telecommunications industry, hasconfronted difficulties in the last few years and these problems are widelyattributed to liberalization policies associated with the globalization process.The research establishes whether this understanding is well founded andhow it determines the forms and means of intervention civil-society actorsutilize in their engagement with the government. Second, the effectivenessof these modes of intervention and how the state responds to the processesof dialogue, negotiation, and bargaining are also assessed to account forsubstantive policy changes or, alternatively, policy disagreement or policy

Introduction 11

inertia.

Theoretical Perspectives onState-Civil Society Relations

There are three major approaches in viewing and explaining state-civil society relations: liberal-oppositional, liberal-relational, andMarxist-relational (Ku 2002). This research has a bias toward the liberal-relational approach. The liberal-relational approach views civil society“as being necessarily intertwined with the state. Much liberal theorybelieves that civil society may effectively defend itself against anencroaching government only through legal and political institutions”(Ku 2002, 534-35). If in the liberal-relational approach the state isnecessary to ensure the rights of individuals in a civil society and of thecivil society itself, the Marxist-relational approach considers the stateas a referee among contending egoistic interests in civil society. “In thistheory, state intervention is legitimate if it is to remedy injustices andinequalities within civil society, and if it is to protect the universalinterest of the people” (Ku 2002, 532). As for the liberal-oppositionalapproach, it views civil society “as a realm outside and in opposition tothe state. Believing that the state is necessarily coercive and oppressive,it favors a highly autonomous civil sphere outside the state. It advocatesthe self-management of the sphere, through self-help bodies, informalnetworks and social movements” (Ku 2002, 534). These two approacheshave their own explanatory power; however, given the currentdevelopments in state-civil society relations in the case studies of theindustries covered in the context of globalization mentioned above, theliberal-relational approach is deemed to capture much of the ongoingdynamics in the sectors being studied. This is because in the liberal-relational approach, civil society in this research “exists at theintersection where the various elements of society come together toprotect and nurture the individual and where the individual operatesto provide those same protections and liberating opportunities forothers” (O’Connell 2000, 474). These “various elements” refer to the


community; the business sector; the voluntary, nonprofit, independentsector; and even, in part, the government (Hearn 2001, 342).

Theoretical Framework ofPolitical Opportunity Structures

These perspectives, however, may not fully capture state-civil societyrelations when a new element is introduced: globalization. Willglobalization weaken the intertwined relationship of the state and the civilsociety, and thereby also reduce the democratizing potential of such relationto the detriment of the people who have to suffer the effect ofundemocratically crafted socioeconomic policies? Or, is it also possiblethat economic liberalization, the main economic regime that underpinsglobalization, will result “in the transfer of economic decision making andpower to market forces and social actors, therefore potentially empoweringcivil society” (Kamrava and O Mora 1998, 896-97)?

To examine these questions, the study also draws heavily from theframework of resource mobilization in explaining the emergence of socialmovements in terms of the capability of movement entrepreneurs tomobilize resources toward the attainment of identified collective objectives.In addressing the questions posed in the research, the theory of politicalopportunity structure (POS) was used as the framework of the study. Theconcept of POS is part of the resource mobilization theories conceived toanalyze social movements. This theory is based on the assumption thataspects within the political milieu determine the emergence of strategiesutilized by civil society in engaging the state as well as the outcomes of theengagement. While previous theories emphasize internal characteristicsand resources of movements that could affect mobilization and realizationof objectives, the bias of the political opportunity model is toward externalfactors or conditions; in this case, the broader political system that structuresthe opportunities for collective action. Succinctly, a social movement’spolitical environment influences the kind of approach and the result ofprotest. The POS framework, however, also points to the importance ofmovements to create and mobilize resources at their disposal to advance

Introduction 13

their agenda. Thus, the concept of political opportunity structures is appliedin examining how a specific political environment determines the outcomeof the actions of civil-society actors in each of these respective sectors of thestudy and how these actors are also able to take advantage of opportunitiesthat are external to them.

Changes in political opportunity structures are also monitored asthese may either encourage or discourage social movements, and whenor how struggles would lead to actual reforms. Political opportunitystructures include the opening up of access to power, shifts in rulingalignments brought about by cleavages within and among elites, andthe availability of influential allies (Tarrow 1994). Also, politicalopportunity structures are not confined to the state. In an environmentwhere the state does not have monopoly of trade policy making andgovernance, it is likewise imperative to look at intergovernmental andsupranational institutions. Furthermore, political opportunitystructures, according to Tarrow (1994), are “consistent but notnecessarily formal or permanent dimensions of the politicalenvironment that provide incentives for people to undertake collectiveaction by affecting their expectations for success or failure” (85).

By privileging the structure of political opportunity, the fortunes ofmovements in terms of mobilization and policy influence can be explainedlargely by the nature of political institutions within the challenged polityand the movement’s preferences in approach anchored in this environment(Meyer 2003). In simple terms, therefore, the political context,conceptualized broadly, produces opportunities for actions, responsivenessto change, and policy influence. Corollary to this is the idea that movementsdecide on goals and strategies based on political circumstances instead oforganizational dispositions. Therefore, political opportunity structure islargely used to explain three main aspects of social movements: theiremergence, preference in tactics or strategies, and the degree to which theyachieve their objectives (McAdam, McCarthy, and Zald 1996, 27).Furthermore, in looking into political opportunity structures, Giugni(1998) identifies two salient features central to this model: the system of


alliances and oppositions, which movements can use as a political resourcefor their success, given that they are considered as powerless challengers;and the structure of the state.

The Case Studies

These theoretical perspectives were applied to the four case studiespresented. Sharon M. Quinsaat’s case study, “Mobilizing against VegetableImportation,” looks into the mobilization of the civil society in cooperationwith government to end the importation of cheaper vegetables, which hasbrought about the demise of the already underdeveloped Benguet vegetableindustry. It looks into how civil society explored the different channelsopened under a democracy to penetrate the hostile policy environment inadvocating for reforms to save the industry. A similar situation is also foundin Ma. Glenda S. Lopez Wui’s “Confronting the Challenges in the GarmentIndustry.” Like the vegetable industry, the garment industry also suffersfrom the adverse effects of cheaper importation of garments. Unlike thevegetable industry, though, it is export-oriented and is not geared towardthe domestic market. Furthermore, it enjoyed its heyday as a leading exportindustry and continues to be one of the major export earners of the country.However, its export earnings are threatened by the expiration of the Multi-Fiber Arrangement and the removal of the assured quota for its products.Members of the industry, i.e., the garment factory owners and laborers,together with members of civil-society groups have launched an advocacycampaign for policy reforms to prevent the industry from further demise.

Joel F. Ariate Jr.’s “Protests and Perceived Threats in the Hog Industry”depicts the hog industry as suffering the same fate of the Benguetvegetable and garment industries with regard to the loss of profit asbrought about by cheaper imports. Like the Benguet vegetable industry,it primarily serves the domestic market. Unlike the other two industries,however, the hog industry’s profit continues to increase and has notexperienced the bankruptcy of any of its major players. Despite these,however, the hog industry owners are not taking any chances and havelaunched a series of campaigns and lobbying with regard to policy

Introduction 15

reforms to be undertaken by the government to secure their profits. Asin the Benguet vegetable and garment industries, however, there arealso certain international treaties and agreements that have bound thePhilippine state to abide by the entry of cheaper imports. The last casestudy, “Balancing Consumer and Corporate Interests in theTelecommunications Industry” by Ronald C. Molmisa, highlights adifferent experience of state-civil society engagement in a period ofglobalization. This is because the telecommunications industry—unlikethe Benguet vegetable, garment, and hog industries—has generallybenefited from the liberalization of the industry with the emergence oftelecommunication companies as epitomized by the cellphone andInternet phenomena in the country. The bone of contention now lieson the power of the regulatory state to prevent any form of monopolyand to come out with policies that will benefit most the industry playersand the consumers.

Data Gathering

For this research, a preliminary review of the literature was undertaken,focusing on conceptualizing globalization, state-civil society relations, andprocesses of policy transfer. Data and information were taken from documentcollection of key policy statements, plans of action, and implementationreports. The researchers conducted interviews/focus group discussions(FGDs) with the subject/civil-society organizations being studied; withofficials of concerned government institutions/offices and their attachedagencies; and with business groups, NGOs, and people’s organizations.

ReferencesReferencesReferencesReferencesReferences

Ayres, Jeffrey. 2002. Transnational political processes and contention againstthe global economy. In Globalization and Resistance, ed. Jackie Smith andHank Johnston, 191-205. Lanham: Rowman & Littlefield Publishers,Inc.

Bensabat-Kleinberg, Remonda, and Jenine A. Clark, eds. 2000. Economicliberalisation, democratization and civil society in the developing world. London:


Palgrave Macmillan.Callinicos, Alex. 2001. Against the third way. Cambridge: Polity Press.Clark, John. 2003. Civil society and transnational action. In Globalizing civic

engagement: Civil society and transnational action, ed. John Clark, 1-28.London and Sterlina: Earthscan Publishing Inc.

Colas, Alejandro. 2002. International civil society. Cambridge: Polity Press.Fox, Jonathan A., and L. David Brown. 1998. The struggle for accountability:

The World Bank, NGOs and grassroots movements. Cambridge and London:The Massachussetts Institute of Technology Press.

Giugni, Marco G. 1998. Was it worth the effort? The outcomes andconsequences of social movements. Annual Review of Sociology 98: 371-93.

Grugel, Jean. 2004. State power and transnational activism. In Transnationalactivism in Asia: Problems of power and democracy, ed. Nicola Piper and AndersUhlin, 26-42. London and New York: Routledge.

Habito, Cielito. 2005. State-civil society relations in the context of globalization:A review. Draft manuscript. UP Third World Studies Center and UnitedNations Development Programme.

Hearn, Jonathan. 2001. Taking liberties: Contesting visions of the civil societyproject. Critique of Anthropology 21 (4): 339-60.

Kamrava, Mehran, and Frank O Mora. 1998. Civil society and democratizationin comparative perspective: Latin America and the Middle East. Third WorldQuarterly 19 (5): 893-916.

Ku, Agnes S. 2002. Beyond the paradoxical conception of “civil society withoutcitizenship.” International Sociology 17 (4): 529-48.

Meyer, David S. 2003. Political opportunity and nested institutions. SocialMovement Studies 2 (1): 17-35.

McAdam, Doug, John D. McCarthy, and Mayer Zald, eds. 1996. Comparativeperspectives on social movements. Cambridge: Cambridge UniversityPress.

O’Connell, Brian. 2000. Civil society: Definitions and descriptions. Nonprofitand Voluntary Sector Quarterly 29 (3): 471-78.

Peters, Chris. 2000. An assessment of the ADB’s poverty reduction strategy paper.Freedom from Debt Coalition document. October.

Petras, James. 2003. The new development politics: The age of empire building andnew social movements. England: Ashgate Publishing Limited.

Przeworski, Adam, Michael E. Alvarez, Jose Antonio Cheibub, and Fernando

Introduction 17

Limongi. 2000. Democracy and development: Political institutions and well-being in the world, 1950-1990. Cambridge: Cambridge University Press.

Sen, Amartya. 2000. Development as freedom. Oxford: Oxford UniversityPress.

Serrano, Isagani. 2001. Globalization and poverty eradication in Asia and Pacific.Paper presented at the Asia and Pacific Forum on Poverty, Asian DevelopmentBank Headquarters, Manila, February 5-9.

Smith, Jackie, and Hank Johnston. 2002. Globalization and resistance: Anintroduction. In Globalization and Resistance, ed. Jackie Smith and HankJohnston, 1-10. Lanham: Rowman & Littlefield Publishers, Inc.

Tabb, William. 2001. The amoral elephant: Globalization and the struggle forsocial justice in the twenty-first century. New York: Monthly Review Press.

Tarrow, Sidney. 1994. Power in movement: Social movements, collective action, andpolitics. Cambridge: Cambridge University Press.

Thomas, Caroline. 1997. Globalization and the south. In Globalization and theSouth, ed. Caroline Thomas and Peter Wilkin, 1-17. Thomas: MacMillanPress Ltd.

United Nations Development Programme (UNDP). 1993. Human DevelopmentReport: People’s Participation. http://hdr.undp.org/reports/global/1993/en/default.cfm.

———. 2003. Partners in human development: UNDP and civil societyorganizations. New York: United Nations Development Programme.

Uvin, Peter. 2000. From local organizations to global governance: The role ofNGOs in international relation. In Global institutions and local empowerment:Competing theoretical perspectives, ed. Kendall Stiles, 9-29. London:MacMillan Press Ltd.

Wilkin, Peter. 1997. New myths for the south: Globalization and conflict betweenprivate power and freedom. In Globalization and the South, ed. CarolineThomas and Peter Wilkin, 18-35. London: MacMillan Press Ltd.

Mobilizing againstMobilizing againstMobilizing againstMobilizing againstMobilizing againstVegetable ImportationVegetable ImportationVegetable ImportationVegetable ImportationVegetable Importation

Sharon M. Quinsaat

Guided by the theory of comparative advantage, the Philippinesliberalized trade in agriculture through the ratification of variousinternational accords such as the General Agreement on Tariffs

and Trade-Uruguay Round (GATT-UR) and the Association of SoutheastAsian Nations Free Trade Area (AFTA) as a means of spurring growth inthe sector through increased productivity and access to foreign markets.However, in a country where agriculture remains economically important,1

in spite of government’s traditional bias against the sector, the opening upof the domestic market to foreign agricultural commodities was regardedas a guaranteed recipe for failure. Central to the opposition to tradeliberalization is the removal of quantitative restrictions (QRs) on importsand decrease in tariff rates of imported goods, which facilitate the incursionof cheaper, often subsidized, goods, displacing Filipino farmers’ sizeableshare in local markets.

Amid protestations against the merits of free trade in agriculturewas guarded optimism for the vegetable industry. With its growthpotential in exports, vegetables ostensibly offer economic opportunitiesto Filipino farmers. Economists have championed vegetables to beamong the “gainers” from trade liberalization as agricultural productionand trade shift from traditional to high-value crops, owing to thecountry’s favorable climate, which makes it possible to produce differentkinds of vegetables all year round.2

19


In 1999, massive importation of government-subsidized Australianand Chinese produce, particularly semitemperate vegetables, placed theprovince of Benguet in a crisis with long-term consequences. With morethan half of the population highly dependent on vegetable farming, theprognosis was that Benguet had a very dismal chance of recovery. Thesector was considered to be an unforeseen casualty of agricultural tradeliberalization, as it boasts of monopoly of such commodity in the domesticmarket.

To some extent, the unintended but laudable outcome of the crisiswas the unprecedented mobilization of civil society and the localgovernment to end the bane of importation, at least for vegetables. Thestirrings at the local level became a springboard for more concerted actionsat the national level, which some have characterized as “a paradigm shiftfrom victims waiting helplessly for government action to empoweredfarmers taking the initiative” (Ordoñez 2003). Although civil society elicitedonly temporary solutions and modest policy reforms from government,the experience of the Benguet vegetable sector presents a unique opportunityto examine the underlying dynamics of a process by which civil societyrelates to the state in an environment conditioned by globalization.

Taking the case of the Benguet vegetable industry from October 2002to September 2004, this study endeavors to answer the main question:“How is the relationship between the state and civil society in addressingthe impact of trade liberalization, a by-product of government’s submissionto market forces?” More specifically, the study aims to: 1) examine thefactors underlying the mobilization, strategies, and outcomes of civil-societygroups in engaging the state, with specific focus on the political environmentthat facilitated or impeded such causes; 2) assess the extent of the influenceof civil-society groups in pressing for government action on the Benguetvegetable crisis; and 3) determine the lessons that such success or failureindicates in terms of the viability of state-civil society engagement inaddressing the impact of trade liberalization.

This paper argues that despite the opening up of channels forcitizen’s participation in government due largely to the democratization

Mobilizing against Vegetable Importation 21

processes after Martial Law, the neoliberal ideology strongly andfaithfully espoused by the Philippine government has created a hostilepolitical environment for civil society advocating reforms in tradepolicies that are deemed threatening to the full realization of itseconomic orthodoxy. However, civil society was able to seize importantopportunities for mobilization and policy influence: access to channelsin the political system, either mandated by law or superficially createdby government officials in their attempt to respond to the problem ofthe industry; presence of influential allies, especially the elite; apolitically charged atmosphere owing to the approaching nationalelections; and persistent and sympathetic media treatment of theproblem building an impression of urgency.

Contours of the VContours of the VContours of the VContours of the VContours of the Vegetable Sector inegetable Sector inegetable Sector inegetable Sector inegetable Sector inBenguet in the Era of TBenguet in the Era of TBenguet in the Era of TBenguet in the Era of TBenguet in the Era of Trade Liberalizationrade Liberalizationrade Liberalizationrade Liberalizationrade Liberalization

The province of Benguet located in the Cordillera AdministrativeRegion (CAR) has dominated the local production and trade ofsemitemperate vegetables,3 earning the moniker “Salad Bowl of thePhilippines.” Prior to the development of the vegetable industry, however,most of Benguet agriculture was devoted to the production of rice, camote(sweet potato), and gabi (taro) for local consumption. Although theSpaniards introduced the production of cabbage and potato in the mid-1800s, farming was limited, small-scale, and household-oriented until thelate 1920s. The Americans further developed vegetable production duringtheir colonial rule due largely to the mining boom and growth of loggingcompanies in the area. Two important factors ushered in commercial interestin semitemperate vegetables in Benguet: the presence of Japanese andChinese nationals who had knowledge of the technology for vegetablefarming, and the construction and opening of the Halsema Road, whichenabled the growth and expansion of production and trade (Reyes-Boquiren1989; Lewis 1992). From this time on, the vegetable industry hasincreasingly become substantially important to the economy of Benguet.4


However, the Philippine vegetable industry, in general, has by andlarge been backward and subsistence-based, suffering for decades fromlimited and erratic production, low demand, weak infrastructure, and lackof government support. In actuality, there is no explicit government policyregarding the development of vegetable farming. As a matter of fact,vegetable production through the years has been “accorded less attentionand support by the government” (Lantican 1998, 52). Vegetables areincluded under the “high value crops”5 category, wherein the chief policyinstruments for its development are the Republic Act (RA) 7900 or theHigh Value Crops Development Act of 1995 and the Gintong Ani for theHigh-Value Commercial Crops program of the Department of Agriculture.

Vegetable farming in Benguet is capital intensive and at times involves“an elusive interplay of skill, fortitude and luck” (Lewis 1992, 118). First,there are production-related factors which are beyond the control of thefarmers. One alarming trend related to low volume of production is thedecreasing area planted to vegetables due mainly to declining fertility ofthe land (owing to long years of use) and soil erosion, and land use and/orcrop conversion, such as the shift to planting of ornamental plants (Aquino2003). Next, in the case of cost of production, farm inputs alone require asubstantial amount of capital. Machinery, seeds, and chemicals are oftenimported.6 Benguet farmers have been importing American, Japanese, andEuropean hybrid seeds since the 1960s, which produce quality cauliflower,broccoli, carrots, potatoes, and cabbages (Cabreza and Caluza 2002).Because of inadequate farm extension and other support services from thegovernment, farmers resort to, and are at the mercy of, abusive informalmoneylenders.7

Production forms only half of the farmers’ expenditures. Farmers haveto wrestle with high transport costs, which usually take a large share oftotal costs in postharvest, especially for highland vegetables. Poor farm-to-market roads, inadequate storage, and inferior market information systemresult in under- and/or over-supply and spoilage.8 Price fluctuations arealso a common problem of farmers, regardless of the type of crop. Due tolimited access to reliable market information and a multilayered marketing


channel, farmers are reliant on traders who dictate the farmgate prices oftheir produce, which are usually low.9 High costs of packaging their produce,high rental of stalls and stands, low quality of products, limited researchand development, lack of modern/appropriate marketing technology andvarieties, and weak (or lack of ) producer organizations that could effectivelymarket the vegetables directly to the consumers are also challenges thatfarmers deal with (Aquino 2003). Adding to these supply-side factors isthe declining share of vegetables in household food expenditures.10

Due to its geographic location, the province of Benguet is alsovulnerable to natural disasters. In July 2001, one of the worst tropicalstorms to hit the Philippines—Feria (Utor)—struck Northern Luzon,destroying infrastructure and devastating rice and vegetable farms. Tradewas disrupted in Benguet, as the province was temporarily isolated due tolandslides and floods, which rendered major routes impassable. Thecalamity created a shortage in the supply of semitemperate vegetables,inducing traders and retailers to seek alternative sources to meet thedemands of the markets and consumers. This opened a Pandora’s box, aswhat started as an emergency or stopgap scheme developed into a recurrentthen finally permanent practice.

Not fully recovered from Feria’s rampage, Benguet faced anotheroutpouring—this time, of cheap and high-quality imported vegetables.Since 2001, farmers in Benguet have been articulating that the scourge ofcheap imports has become the main threat to their livelihood, if not totheir very chance of survival. Indeed, from the last quarter of 2001 to2002, the farmers of CAR, especially Benguet, suffered, as the countryimported about USD 6.4 million (PHP 328.7 million) worth of fresh/chilled vegetables as compared to USD 5.8 million (PHP 295 million) theprevious year, according to figures from the National Statistics Office(NSO). In general, imports grew by 3 percent on volume and 10 percenton value. Notable is the 1,925 percent growth in quantity for carrots, 102percent for head lettuce, 97 percent for cauliflowers and headed broccoli,and 94 percent for cabbage, from 2001 to 2002; all of which are alsoproduced locally (table 1). Data provided by the NSO and the Philippine

24 People, Profit, and PoliticsTa

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Institute for Development Studies (PIDS) show a 152 percent increase inthe average volume of imported fresh vegetables from 40,419 metric tonsin 1991-1994 to 101,659 metric tons in 1995-2001.11

The entry of cheap imported vegetables caused the province ofBenguet to incur heavy losses with an estimate of PHP 2 billion infailed transactions between July and August 2002 alone (Requejo 2002).In a study conducted by Tagarino and Siano (2003), about 80 percentof 608 farmers in Benguet and Mountain Province ascribe their lossesto imported vegetables. The most conspicuous outcome of the flood ofimports was depressed farmgate price (table 2). Being a major marketof cheap vegetable imports, Manila may serve as a benchmark in thepricing system. With a highly layered marketing system dominated bymonopoly traders, prices of cheap imports may be used as leverage tofurther depress farmgate prices (Morilla 2003). Most farmers have beeninclined to sell their cash crops at a loss to Metro Manila markets tocope with the crisis.12

Table 2. Annual average farmgate price ofselected vegetables in Benguet, 1998-2003

Commodity 1998 1999 2000 2001 2002 2003

Cabbage 15.17 10.63 7.71 4.78 7.9 8.39

Carrots 18.13 17.28 16.26 10.87 10.46 17.42

Cauliflower – – 32.49 13.9 20.66 21.56

White potato 14.7 16.1 12.69 15.44 11.33 13

Source: Bureau of Agricultural Statistics.

Price alone, however, does not capture the effects of cheap vegetableimports. Equally important are the often-overlooked impact on the psycheand morale of farmers, and on family and community relations. Eighty-eight percent of the respondents have registered extreme discouragementto continue vegetable farming (Tagarino and Siano 2003) andacknowledged the exigency of engaging the state.


Key Elements Affecting State-Civil Society RelationsKey Elements Affecting State-Civil Society RelationsKey Elements Affecting State-Civil Society RelationsKey Elements Affecting State-Civil Society RelationsKey Elements Affecting State-Civil Society Relations

In the policy process, civil society, particularly stakeholders, engagesthe state or vice versa in setting the agenda, influencing the formulationand adoption of a policy, and monitoring and assessing the implementationof policy in terms of achieving its objectives. However, there are certainfactors that may impinge on the likelihood of this interaction, courses ofaction, and purported outcomes, specifically in terms of policy reforms.For this particular case study, these are divergences among the partiesinvolved at the rudimentary level of problem identification andinterpretation, intricacies of the policy in question, and a mixture of civilsociety players with disparate tactics and interests.

Pinpointing the Problem: Variances in Analysis

Recognition and understanding of the problem is a critical first step instate-civil society engagement. It identifies who should be engaged andwhat the prospects and setbacks are and determines the effectiveness of thetechniques to be employed. Likewise, it delineates the parameters forinteraction, offers a clear-cut focus, and sets the elements of a strategy.With regard to the Benguet vegetable industry, there were threepredominant interpretations of the situation, mainly centering on the causesof its ailing performance in the domestic market: smuggling, tariffreduction, and absence of safety nets. Those who saw the problem as aresult of aggressive reduction of tariff rates were polarized into those whoconsidered this policy as directed by the World Trade Organization (WTO)and those who thought that it was a unilateral action by the government.

Smuggling: The proverbial culprit

Since majority of the total volume of fresh/chilled imports originatedfrom China (Macabasco 2003), a country still in the process of accedingto the WTO in 2001 at the same time forging a free trade agreement withmember-states of the Association of Southeast Asian Nations (ASEAN),smuggling was easily identified as the nemesis. However, the relationshipbetween agricultural trade liberalization and smuggling is incongruous.


When a commodity is protected with high tariffs and quota restrictions,the importation of such becomes costly, making smuggling an economicalrecourse; thus the belief that the old problem of smuggling is not, in anyway, a function of free trade. Furthermore, unlike importation, which isauthorized through government laws and policies, smuggling is a criminaloffense, often linked to poor enforcement of customs regulations andcorrupt practices of government officials.13

There are two kinds of smuggling: outright, which does not requiredocumentation such as import permits; and technical, which takes placethrough undervaluation, underdeclaration of the volume shipped,misclassification, and diversion of cargo (Francia 2004). Technicalsmuggling is the main way in which goods are brought into the country.But it cannot exist without the collusion of unscrupulous traders andcorrupt government personnel and officials (Bacalla 2004). This was oftenthe case for vegetables. Smuggled vegetables pose a much bigger threatthan legally imported produce as they imperil not only the source of incomeof farmers, but the health of consumers as well.14

Stakeholders in Benguet, particularly traders and farmers, widelybelieved that smuggling was their biggest enemy. As a result, the differentline agencies directly involved in importation procedures were the identifiedvenues of engagement: the Bureau of Plant Industry (BPI), mandated toenforce the Plant Quarantine Law through the issuance of import permitson plants and small animals likely to become pests, and the inspection andtreatment of imported agricultural commodities among others; and theBureau of Customs (BoC), the principal institution tasked to enforce tariffand customs laws.

To some groups, however, smuggling was a flawed analysis, therebytargeting the wrong agencies. The Alyansa Dagiti Pesante iti TaengKordilyera (Alliance of Peasants in the Cordillera Homeland [APITTAKO]), a sectoral organization of the Cordillera Peoples Alliance(CPA), has referred to smuggling as a smoke screen of a much largerissue which the government does not intend to confront head-on(Bagyan and Gimenez 2004). By shifting the blame on smuggling


instead of legal importation, the problem is relegated to the level ofpolicy implementation rather than policymaking. This becomesproblematic because the tragedy experienced by the Benguet vegetableindustry now becomes a symptom of the Philippines’ perpetualdevelopment problem, graft and corruption, instead of its economicideology, neoliberalism.

Tariff reduction: Diktat of the WTO

In line with market access commitments under the Agreement onAgriculture (AoA) of the GATT, the Philippines has agreed to removeimport quotas and other QRs and to replace these with correspondingtariff rates, which will be reduced at a predetermined schedule.15 This iscodified in RA 8178 or the Agricultural Tarrification Act of 1995.16 Theinitial bound tariffs for most of sensitive agricultural products fall within50 to 100 percent in 1995 and 1996. These rates are then reduced to 10 to50 percent by 2003 and 2004. For vegetables, the Philippines offered tobind tariff at 40 percent.

Hence, the influx of imported vegetables was just the most recentrepercussion of unbridled trade liberalization, under the directive of theWTO to scale down tariffs of various agricultural commodities throughmodification of the Most Favored Nation (MFN)17 tariff rates. Expedientsin the form of safety nets and executive orders that temporarily increasetariffs are futile. Because of government’s accession to a rules-based tradingorganization, tariffs will eventually be scaled down no matter what (Bagyanand Gimenez 2004; Gobrin 2004). Since vegetable importation is a directoutcome of policy, then the most fitting and constructive tactic is to petitionfor the restoration of quantitative restrictions through legislation. Thelegislative branch, therefore, not the executive, is the venue for engagement,for the reason that the Congress has the exclusive rights on tax-relatedmatters, as stipulated in the Philippine Constitution. But a comprehensivereinstatement of quantitative import restrictions would be impossiblewithout a repeal of RA 8178, which in effect means withdrawal ofmembership from the WTO.


Tariff reduction: Solo act

As opposed to the analysis that the vegetable crisis was WTO’s soleresponsibility, some civil-society groups have continuously asserted thatthe Philippine government prefers to set and apply a much lower tariffrate independently (table 3). A 40-percent tariff on vegetables does notbreach commitments on tariff schedules presented to the multilateral tradebody. However, the Philippines has been unilaterally reducing tariffs onagricultural products, arguing that such move is only an act of complianceto the WTO. In effect, the WTO has become the government’s scapegoatfor its own faults and inaction. The government’s rhetoric that it has beencompletely emasculated by the trade body is a myth (Villanueva 2004).What it fails to publicly disclose is the fact that the country’s economicmanagers promote tariff reduction, not because they abide by the rulesand procedures of the WTO for threat of retribution, but because theythemselves are steadfast in their belief that this would spur economic growth.

A review of major episodes of trade policy reform in the Philippinesstrengthens this assertion. Each administration has its legacy of unilateraltrade liberalization, commencing with Marcos’s Tariff Reform Program(TRP) I, an integral component of the structural adjustment loan programextended by the World Bank in the early 1980s, which reduced the leveland dispersion of tariff rates from a range of zero to 100 percent in 1980to a range of 10 to 50 percent, and removed the quantitative restrictionsbeginning in 1981 and ending in 1985. This became the antecedent ofsubsequent policies and programs—Aquino’s TRP II, which decreased thetariff range to within a 3 to 30 percent tariff range by 1995; TRP III,which was the first major step by the Ramos government in adopting auniform 5 percent tariff by 2005 based on the liberalization targets of the1993-1998 Medium Term Philippine Development Plan; and TRP IVduring the Estrada administration, which adjusted the tariff structuretoward a standardized tariff rate of 5 percent by the year 2004, except fora few sensitive agricultural and manufactured items. For her part, PresidentGloria Macapagal Arroyo issued in 2003 Executive Orders 241 and 246,respectively, to modify the tariff structure such that the tariff rates on


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products that are not locally produced are as low as possible while thetariff rates on products that are locally produced are adjusted upward (seeAldaba 2005).

Given this analysis, the strategy is to pressure the executive to increasetariff rates as a short-term response, while maximizing the potentials ofCongress in advocating for policies and laws intended to protect smallfarmers from the onslaught of further trade liberalization, such as safetynets, coupled with a recalibration of the tariff program for agriculture.

Safety nets: The missing link

If programs and projects to offset the adverse effects of tradeliberalization were implemented in the first place, then the vegetable crisisshould have been avoided. This was the sentiment of majority of civil-society groups and even local officials in Benguet. Within the WTO,member-states can institute safety nets to cushion the blow of the AoA:increase in tariffs up to the bound rates; imposition of safeguards againstunfair trade, if the situation so warrants; and delivery of competitiveenhancement measures to make local agriculture become more efficient.

The Philippine state is replete with protective instruments against unjustforeign competition and trade practices, as three important measures werelegislated, albeit at a snail’s pace, in light of the country’s membership inthe WTO: the Countervailing Act of 1999 (RA 8751), which strengthensthe procedures for the enforcement of countervailing duties on importedsubsidized products; the Anti-Dumping Act of 1999 (RA 8752), whichprovides the rules for the imposition of a duty for products entering thecountry at an export price less than their normal value in the ordinarycourse of trade; and the Safeguard Measures Act of 2000 (RA 8800), whereingovernment can levy a higher tariff on imports of agricultural commoditiesonce they violate a certain volume of price, protecting local farmers growingthe same products.

In connection with transforming the vegetable industry in order tocompete with the onslaught of imports and maintain its foothold inthe domestic market, government is also obliged to provide the necessary


support, such as the Agricultural Competitiveness Enhancement Fund(ACEF) stipulated under RA 8178—a trust out of the proceeds of theminimum access volume (MAV)18 importations intended for farmers/fisherfolks and agribusiness enterprises. However, although many seethe ACEF as a potential solution, it is actually ridden with loopholesand bureaucratic impediments. What is paradoxical is the fact thatACEF draws its funding from in-quota tariff revenues earned via theimportation of MAVs, necessitating further importation to sustain it.In addition, to access the funds, farmers’ organizations must meetstringent requirements, contradicting ACEF’s objective of protectingvulnerable and marginalized producers (Aquino 1998). In spite of theimperfection of policies on safety nets, lobbying for the provision ofsuch is still indispensable.

These analyses of the difficulties faced by the Benguet vegetable sectorunder agricultural trade liberalization have led to civil society’s three-pronged strategy in its engagement with the state: 1) pushing forinvestigation of smuggling activities, with the main goal of identifyingand meting out punishment to all the actors involved, especially governmentofficials; 2) petitioning for the increase of tariffs of vegetables up to theGATT-consistent bound rate of 40 percent; and 3) lobbying for thecompetitiveness enhancement of the Benguet vegetable industry, not onlythrough easy access to ACEF, but also through the provision of the long-overdue assistance in production, post-production, and marketing aspects.

Complex and Unpopular Policy Terrain

There are unique features of the trade policy environment that haveprovided civil society, in the past and at present, challenges in advancingits advocacies through engagement with the state, especially in relation tothe institution of protective mechanisms for vulnerable and weak sectors.

To begin with, the predominance of the neoliberal ideology amongcrucial policymakers is a powerful obstacle to the acceptance of an alternativeframework for trade and industrial policy. This tenet is not only tenaciouslyadhered to but also nurtured by like-minded academic experts, think-tanks


and consultancy firms working closely with government. As such, theprogram of liberalization, privatization, and deregulation wasindoctrinated and carried out with much fervor, especially during theRamos administration, when neoliberalism came into fashion andreached a critical mass “not as a result of an intellectual coup but of agradual takeover of the strategic heights of the technocracy by thesefree market-oriented policy makers coming from the academe,government, and business” (Bello et al. 2004, 92). As a spawn ofdoctrinaire economics, trade by design is a policy domain where only ahandful of actors have monopoly in decision making, mostly technocratsappointed by a president who seeks legitimacy and consolidated powerof his or her economic doctrine. While some interest groups are able topermeate the arena, these are mostly the privileged and powerful, suchas the landlord-controlled sugar industry lobbyists.

Moreover, the transnational character of economic policy making hascreated a state of affairs where the Philippine government is moreaccountable to the institutions of global governance, such as the WorldBank, the International Monetary Fund, and the WTO, along with thestates that exercise hegemony within and over these establishments, thanto its citizens. Relationships with these players in the global trade regimeare bestowed with so much importance, either by intention or by sheermendicancy of the government, such that responsibility to its public isoften compromised.

On another aspect, but equally important to civil-society actors, despitethe uproar that trade liberalization has created from the structuraladjustment programs in the 1980s to the WTO accession in the 1990s,public knowledge and appreciation of trade-related issues is extremely low.Compared to other economic issues, such as tax and foreign debt, tradelacks the popularity that could propel it to the public agenda, and hopefully,the media, government, and electoral agenda. Therefore, civil society hasto contend with the difficult task of educating the public on the intricaciesof trade, in an attempt to widen the debate, as well as gain the necessarysupport for its advocacies.


Blurring of Civil Society

It is important to note that with the advent of globalization, someobscurities on who civil society is have surfaced. This is particularly relevantin the case of the Benguet vegetable sector. As the negative impact of tradeliberalization began and continues to take its toll on the agricultural sector,multisectoral formations confronting these issues have mushroomed.Campaign coalitions, which are generally initiated by civil society in itsstrictest sense, have expanded to include even interest groups and industrystakeholders like businessmen and traders. This phenomenon can beexplained by the fact that trade liberalization is jeopardizing the existenceof local industries, which means all players—from producers to businessowners—are put at risk (Frago, Quinsaat, and Viajar 2004).

Hence, in examining how civil-society actors engaged the state inresponding to the problems besetting the Benguet vegetable sector in thecontext of trade liberalization, it is useful to classify who were involved inthe issue (table 4). Civil society in this study consisted of: 1) those whowere directly affected by the problem and may entirely benefit or sufferfrom the outcomes of the engagement in terms of policy response—thestakeholders (farmers’/peasant organizations and traders groups), and 2)those who claimed to speak in behalf of the affected sectors and took onsupportive roles in the advocacy effort (political blocs, nongovernmentorganizations [NGOs], coalitions, and the church). In this case, civil societycomprised advocates for the producers.

It is also crucial to emphasize that some civil-society groups, especiallythose that are nonstakeholders, are not inclined to take on commodity-specific engagement of the state. Instead, they tackle issues concerningagricultural trade liberalization or even the Philippine economic frameworkin its entirety; thus, on some occasions, these groups are actually advocatingfor policy reforms that would benefit the whole industry, and not exclusivelythe vegetable sector. Actually, these groups have been involved in the long-standing movement against trade liberalization in the Philippines. Forinstance, the Philippine Peasant Institute (PPI) was at the forefront of thecampaign to defer ratification of the GATT-UR, through the alliance Pabi-


GATT,19 in 1994. Later on, some of the forerunners of Pabi-GATT foundedthe Stop the New Round Coalition-Philippines (SNR).20 On the otherhand, political blocs like Bayan Muna (People First) and Kilusan para saPambansang Demokrasya (Movement for National Democracy [KPD])have linked the opposition to trade liberalization to contemporaryanticapitalist struggles. Concomitantly, these groups have had a history ofgovernment interaction, which has transformed over the years fromantagonistic to critical collaboration to as far as entry into the mainstreamarena of Philippine policymaking. Hence, they have tested the bounds ofengagement and have built working relations with official state agenciesand individuals.

Type of civil-society group

Stakeholders

Political blocs

NGO

Multisectoral coalitions

Church

Organization

Farmers’/Peasant OrganizationsBenguet Farmers Federation Inc.Alyansa Dagiti Pesante iti Taeng Kordilyera

Traders’ OrganizationsBenguet Vegetables Distributors’ Cooperative, Inc.Early Bird Traders’ AssociationLa Trinidad Vegetable Trading Post AssociationBagsakan Traders’ AssociationLa Trinidad Booth Holders Association

AkbayanBayan MunaKilusan Para sa Pambansang Demokrasya

Philippine Peasant Institute

Alyansa AgrikulturaFair Trade AllianceStop the New Round Coalition

Social Action Center

Table 4. Civil-society actors involved in the issues

of the Benguet vegetable industry


The Engagement ProcessThe Engagement ProcessThe Engagement ProcessThe Engagement ProcessThe Engagement Process

Maximizing the Local Gateway

With revenues coming in trickles and the La Trinidad Trading Post ata standstill, the local government realized that it could not afford to languishand wait for national government to take action. The situation promptedlocal officials to take action and signaled an opportunity for farmers, traders,and other civil-society actors to engage the local government. Local officialsare themselves farmers and traders or are engaged in agricultural productionand trade with their family, kinship, network ties, and patron-client bonds;thus foreshadowing at least responsiveness of the public servants to thedemands of their social relations. A partnership was immediately forgedamong the three stakeholders—local government, traders, and farmers—to investigate and curb the prevalence of importation in Metro Manila,and to formulate a comprehensive development blueprint for the localvegetable industry to guarantee its competitiveness in the domestic marketand shield it from import surges.

At the outset, since most of the information presented by the mediarevealed dubious import permits and extremely low price of importedvegetables, smuggling was quickly identified as the cause. In July 2002,the La Trinidad Anti-Smuggling Task Force was created through anadministrative order issued by the municipal government. Actions of thetask force revolved around monitoring and research of smuggling activitiesin Metro Manila and crafting of policy proposals, which were mainlydirected to national state agencies with the endorsement of the localgovernment officials. Since the nature of their work entailed constantinteraction with retailers and knowledge of the market situation, the traders,led by the Benguet Vegetables Distributors’ Cooperative, took the driver’sseat and steered the anti-smuggling drive (Fongwan 2004; Kim 2004).

However, the provincial government through the leadership ofGovernor Raul Molintas, a self-proclaimed anti-GATT advocate, and BoardMember Johnny Uy, chairman of the Provincial Board Committee ofAgriculture, recognized from the start that smuggling was just the tip of


the iceberg. The Provincial Board created the Benguet VegetableCommission in early 2003, tasked primarily to study the impact ofimportation and recommend remedies by which the provincial governmentcould endorse policies and other alternative courses of action. In light ofthe country’s looming full implementation of the GATT by 2005, thecommission would also identify development-related projects to enhancethe status of the local vegetable industry (Molintas 2004; Uy 2004; Sales2003b). However, the commission was an interagency project, with noseat allotted for NGOs. In the process, the provincial government alsoinitiated the establishment of the Benguet Farmers’ Federation Inc. (BFFI).The BFFI, the tangible outcome of the National Vegetable Summit in2003, was composed of 80,000 farmers from the thirteen towns of Benguet(Sales 2003c). The main objective for organizing was to address problemsat the production level. To collectively deal with importation was merelysecondary (Andiso 2004). Since its formation, the federation has beenworking closely with the provincial government, earning representation inthe Benguet Vegetable Council, which replaced the old Benguet VegetableCommission following its expiration at the end of 2003. Through theCouncil, the BFFI became party to a development plan of the vegetableindustry in Benguet, and strengthened its partnership with the Departmentof Agriculture (DA)–Regional Field Unit–Cordillera Administrative Regionin crop programming and with the Department of Trade and Industry(DTI) Baguio-Benguet in its market-matching projects (Usman 2004;Santiago 2004).

The debilitating impact of vegetable imports in Benguet also promptedother civil-society groups in the area to strategize. For their part, they werealso caught up with the vegetable crisis primarily because the industry ispart of their larger campaign against agricultural trade liberalization. Afederation of peasant political organizations originally focused on defenseof resources and land reform, APIT-TAKO dealt with the issue of vegetableimportation in 2002, when the crisis was at its peak. The group admittedthat a key constraint to its involvement in the issue was the absence oforganization of its constituents—the vegetable farmers. Although


organizations instrumental to the foundation of the APIT-TAKO havebeen organizing farmers at the barangay (local village), municipal, andprovincial levels since the early 1980s, most of these were not sustained. Inaddition, a large number of farmers’ cooperatives in Benguet, particularlyin the vegetable-producing towns of Atok, Buguias, and La Trinidad, wereestablished mainly to access loans and credits (Bagyan and Gimenez 2004;Cosalan, Tobias, and Yano 2004). As a result, the group undertook parallelorganizing, building new peasant communities and politically reorientingexisting cooperatives.

APIT-TAKO conducted massive education campaign on the impactof trade liberalization particularly in the two most affected provinces—Benguet and Mountain Province. In May 2003, APIT-TAKO organizedthe Cordillera chapter of the Pambansang Ugnayan ng MamamayanLaban sa Liberalisasyon ng Agrikultura (National Network of CitizensAgainst Agricultural Liberalization [PUMALAG]), and launched apetition in the Cordillera region urging Congress to rescind RA 8178.In all its actions, APIT-TAKO forged a working relationship with thelocal government. However, cooperation was limited to the issue oflegal importation and to select officials, namely Uy, the only Benguetpolitician who was a founding member of PUMALAG, and La TrinidadCouncilors John Kim and Wasing Sacla. The group singled out thethree officials because of their unwavering stand against tradeliberalization, often publicly disclosed. Although consultations weremostly initiated by APIT-TAKO, they were very productive in termsof arriving at a negotiated position. For example, on APIT-TAKO’sproposal to lobby for the repeal of RA 8178, the officials found this tosome extent excessive, especially since they were still concentrating theirenergies on pressing the national government for safety nets. But withsustained dialogue, both parties agreed to advocate for increase in tariffrates of vegetables.

Meanwhile, guided by the theology of liberation, the Vicariate ofBaguio-Benguet through the Social Action Center (SAC) also took aproactive stance in its involvement in agricultural issues. SAC’s treatment


of the vegetable crisis and globalization was within the indigenous peoples’framework, arguing that Benguet farmers should not be regarded as ordinarypeasants but as indigenous peoples. The issue then boils down to thequestion of land. Essentially, SAC is not concerned about the incursion ofimported vegetables in the country. Rather, it is alarmed by the policiesand programs that the government has fashioned to mitigate its impact onand enhance the competitiveness of the industry—agriculturalmodernization through the Agriculture and Fisheries Modernization Act(AFMA). Specifically, SAC is opposed to crop programming or zoningbeing introduced to vegetable farmers to sustain the supply and meet thehigh-quality standards of the consumers, the principal deficiency beingleveled against vegetable farmers.21

Through the basic ecclesial communities, SAC also organized theirown farmers’ groups; educated them on GATT, AFMA, and the IndigenousPeoples Rights Act (IPRA); and built their capacity to engage governmentat the grassroots level. After which, a farmers’ congress was held whererecommendations were put forward, targeting the only branch ofgovernment where laws such as GATT can be revoked, where policies suchas IPRA, albeit inadequate, can be strengthened, and where new legislativemeasures can be introduced to protect farmers as indigenous peoples—thePhilippine Congress. On the other hand, SAC and the farmers’ groupsrealize that the local officials, through the Provincial Board, can also enactpolicies for the benefit of the farmers. But most of their engagement withthe local government and the line agencies in the province was to supportand expedite the awarding of Certificate of Ancestral Domain Titles andCertificate of Ancestral Land Titles, in view of the DA’s move toward cropprogramming.

Ultimately, though, civil society understood the limited capacity ofthe local government to respond to the problems of the vegetable industry.Local governments are also victims of the systemic adoption of the neoliberalideology. Their hands are also tied to the whims of the national government(Cosalan, Tobias, and Yano 2004). The bottom line, therefore, was to elevatethe issue and engagement to the national level.


Struggling for Space at the National Level

Realizing that technical expertise and public support, besides politicalinfluence, were crucial to engage the national government, the farmers,traders, and local officials of Benguet elicited the assistance of the FairTrade Alliance (FTA),22 through its convenor, former senator WigbertoTañada, and the Kilusang Magbubukid ng Pilipinas (Peasant Movementof the Philippines [KMP]), through its chairperson, Rafael Mariano(Molintas 2004; Uy 2004). FTA was instrumental in the preparation ofposition papers, particularly on the trigger price23 for vegetables. The alliancealso facilitated its participation in consultations with various agencies andinstitutions. On the other hand, KMP pledged support for rallies anddemonstrations. To strengthen their advocacy for the industry, the farmersand traders also undertook parallel networking, cultivated strongpartnership with political blocs like Akbayan and Bayan Muna and NGOssuch as PPI, and formalized membership in coalitions like the FTA andAlyansa Agrikultura (Agriculture Alliance). But in most of the engagementat the national level, it was a collaboration between the local governmentand the other stakeholders—traders and farmers—with national civil societyplaying a more supportive rather than leadership role. Engagement withdifferent agencies was synchronized and concerted, with the end view ofextracting the most response from the national government.

Department of Agriculture

Interaction with the DA was based on three lobbying points:1) investigation of permits to import (PTI) issued by the Bureau of PlantIndustry (BPI), 2) increase in tariff rates of imported vegetables, and3) provision of safety nets for the industry. But the course of theirengagement traversed three leaderships, each offering them differentopportunities and priorities for action.

In October 2002, at the height of importation, Agriculture SecretaryLeonardo Montemayor ordered the immediate implementation of RA8800, which intends to protect local agricultural products against importsurges in view of the reported entry of vegetables from foreign sources,


and at the same time actively support the initiatives of the local vegetableindustry led by the Benguet vegetable industry stakeholders (DA 2002).Montemayor, known for his knowledge and understanding of the concernsof small farmers as a former peasant representative in Congress, wasimmediately identified as a possible ally in the bureaucracy. However, laterthat year, Luis Lorenzo took over the post. The change in leadership at theheight of importation dampened the spirits of civil society. The farmershad reservations in engaging an agribusiness magnate. In an attempt toappease the disgruntled, Lorenzo pledged to focus on core programs infavor of small farmers and fisherfolk. He immediately conductedconsultations with vegetable farmers and officials from Benguet regardingDA’s proposal to the Tariff Commission to apply the maximum boundrate of 40 percent to vegetable imports and to include twenty vegetableproducts under the sensitive list of commodities (Mendoza 2004). Inaddition, under his administration, the DA expedited the Benguet ColdChain Project, expected to address postharvest losses and the quality ofBenguet vegetables. However, in July 2004, Lorenzo resigned and wasreplaced by Arthur Yap, a move that anti-smuggling groups found adversedue to Yap’s suspected involvement in technical smuggling (Mendoza 2004).Yap’s reputation preceded him and this became a major deterrent for civilsociety’s engagement with the DA.

Although civil society found Montemayor and Lorenzo sympatheticto their concerns and recommendations, they saw a staunch supporterthrough Undersecretary Ernesto Ordoñez due to his instantaneous responseto the problem of importation (Alangdeo 2004; Kim 2004). Ordoñez wasactive in bridging the gap between the agency and civil society. His initialapproach, however, was to engage in battle through the media (Fongwan2004). In any case, Ordoñez became their key person in influencingdecisions in the DA.

The BPI, in contrast, was very different. Civil society was at odds withits head, Blo Umpar Adiong, from the start. Adiong had been blamed forthe unabated importation of vegetables, due to a series of defective importclearances that were unearthed by the traders. But what aggravated Adiong’s


unfavorable position was his alleged defiance of the president’s oralmoratorium on the issuance of import permits to save the Benguet vegetableindustry (Cabreza 2003b). This, compounded with BPI’s failure to obtainthe commitment of importers to support Benguet farmers,24 was sufficientfor the stakeholders to cast doubt on the capability and sincerity of theBPI to address the problems of the industry. In light of the president’sdecision to reorganize the BPI, Adiong handed in his resignation (PhilippineDaily Inquirer, November 21, 2003).

Bureau of Customs

The stakeholders understood that anomalous import permits did notcomplete the smuggling equation. The BoC, the agency supposed to beon top of monitoring the importation of goods among other things, wasthe core of much of the engagement of the traders’ groups led by the BenguetVegetable Distributors’ Cooperative, backed by Councilor John Kim. TheBoC did not deny the incidence of smuggling, but downplayed the extentof revenue losses, which the traders found insulting to the Benguetstakeholders (Alangdeo 2004). At the start of the engagement, the BoC,where corruption is an open secret, was very hostile to civil society.However, with Ordoñez endorsing their actions, the traders were able topenetrate the agency (Kim 2004; Alangdeo 2004), but were limited to theacquisition of documents in order to study the magnitude of the problem.As their engagement persisted, the traders’ participation in theantismuggling operations of the agency was institutionalized in 2003through various memoranda stating that examination of refrigeratedshipments of fruits and vegetables should be conducted in the presence ofa representative from the La Trinidad Trading Post Association, along withother concerned organizations. Likewise, they were witness to thecondemnation of seized container vans and actual destruction of confiscatedvegetables.

Of note were other parallel initiatives of the traders to controlsmuggling. Following the creation of an ad hoc interagency body, TaskForce Blue Collar,25 to investigate and monitor points of entry of smuggled


goods, the Early Bird Traders Association, La Trinidad Vegetable TradingPost Association, Bagsakan Traders Association, and La Trinidad BoothHolders Association founded the La Trinidad Vegetable Supreme Council.Instead of waiting for the government to identify the location of thesmuggled goods, the traders went to Manila and identified the areasthemselves. The traders personally got documents on import requirementsfrom the DA and brought these to the BoC, thus avoiding critical delays.They also conducted antismuggling inspections in Metro Manila markets,warehouses, and port areas.

There was actually a superfluity of antismuggling projects initiatedseparately by government, civil society, and business or founded as jointundertakings of the three sectors. As smuggling became almost ubiquitous,from vegetables to cellular phones, the president constituted the NationalAnti-Smuggling Task Force, part of the three anti-smuggling agenciestogether with the Cabinet Oversight Committee on Anti-Smuggling andthe Anti-Smuggling Intelligence and Investigation Center (ASIIC). TheBenguet stakeholders were represented in each of these projects, clearlyindicating the government’s openness toward civil society participation insubduing smuggling activities. But with no law enforcement power, theirrole was confined to monitoring and inspections.

Department of Trade and Industry

Surprisingly, although the DTI is the chief agency in charge ofinternational trade negotiations, the Benguet vegetable stakeholders foundit secondary, if not totally unnecessary, to tap the agency for assistance.The traders and farmers had the impression that the DTI could only beutilized in the promotion of their products (Alangdeo 2004; Andiso 2004).Nevertheless, since the vegetable crisis coincided with the Fifth MinisterialConference of the WTO, FTA and the SNR took the issue as part of theirlobbying strategy in opposing further WTO- and trade-relatedliberalization. DTI Secretary Manuel “Mar” Roxas III, however, a supporterof consumer-oriented globalization, was opposed to an increase in tariffrates.


Fortunately, with the national elections fast approaching, civil societydiscovered the best way to engage the DTI—the secretary’s politicalaspirations. Civil society, along with the local officials, tried to win overRoxas by insinuating that the support of the Cordillera voting public wouldbe dependent on his stance on further trade liberalization in agriculture,especially vegetables. Thus in the end, he capitulated and supported theactions of civil society. However, although Roxas was seemingly receptiveto the concerns of the civil-society groups in the end, the DTI as aninstitution, which could have taken a more proactive role on trade issues,has somehow relinquished its role and has been reduced to a mere marketingarm.

Tariff Commission

The Tariff Commission conducted two public hearings26 in view ofthe petition filed by the DA, along with food crops manufacturers andimporters, local government officials of Benguet and Mountain Province,and farmers led by the Bad-ayan Buguias Development MultipurposeCooperative, to increase up to the maximum bound levels the tariff rateson certain vegetables and root crops.

During the public hearings, the challengers27 fought for the existing7-percent tariff rate. Armed with statistics from various sources, one ofwhich from the Bureau of Agricultural Statistics (BAS), the parties againstthe petition argued that contrary to popular opinion, the volume of legallyimported vegetables was in fact declining, which naturally made smugglingthe real problem. Thus, inept customs implementation, rather than lowtariffs, was the issue that must be resolved. The importers further contendedthat higher tariffs would only provide greater incentive to smuggle. Unableto make a precise distinction between legally imported and smuggledvegetables, and demonstrate that the former was indeed the cause of thedomestic vegetable industry’s bankruptcy, the DA’s argument for a tariffrate increase did not hold water. The Tariff Commission struck down theproposal and recommended to the cabinet and the interagency Tariff-Related Matters (TRM) to maintain the status quo at 7 percent.


Office of the President

Since the vegetable crisis began in late 2001, the local officials andtraders in Benguet had been flooding the Office of the President withletters, petitions, and resolutions, first asking the president to stopimportation then eventually appealing to enhance the competitiveness ofthe industry. It was not until 2003 that the Office of the President throughthe Presidential Management Staff initiated formal meetings with thestakeholders from the major vegetable- producing and -trading towns ofAtok, Buguias, Kapangan, and Kibungan to probe into the industry’s plight(Sales 2003a). These resulted in the drafting of various recommendationsinvolving production, post-production, marketing, and importation toenhance the productivity of vegetable farmers in Benguet (Sales 2003d;Molintas 2004). On the occasion of the 103rd founding anniversary ofthe province, the president herself visited Benguet, convened the BFFI,and pledged to stop the issuances of permits by BPI, along with a promiseof an assistance package for production, postharvest, and transport facilities.These formal and informal engagements bore immediate results, as thepresident issued Executive Order 197 to raise tariff rates of importedvegetables from 7 percent to 25 percent.

Legislature

The media hype over the Benguet vegetable industry’s imminent demisedue to trade liberalization resulted in the filing of three separate resolutionsin the Twelfth Congress—House Resolution (HR) 834 by Imee Marcos,HR 879 by Satur Ocampo, and HR 894 by Oscar Gozos—to conduct aninquiry into the importation and alleged smuggling of vegetables. Therelentless lobbying of like-minded legislators, mainly from party-list groupssuch as Representatives Loretta Rosales of Akbayan and Satur Ocampo ofBayan Muna, in tandem with a privilege speech delivered by Benguet solonSamuel Dangwa underscoring the impact of vegetable importation on thelivelihood of the farmers, gave the problems of the vegetable industry amplespace in the legislative arena. In the Senate as well, Senator Manuel Villarintroduced two resolutions, Senate Resolution (SR) 464 and SR 258,


directing the appropriate Senate committees to conduct an inquiry intothe influx of imported and smuggled vegetables, with the main objectiveof reviewing the GATT provision lifting quantitative restrictions onvegetables. A related resolution was also introduced by Senator RodolfoBiazon to look into the impact of the implementation of the country’scommitments to the WTO under the GATT.

Congressional hearings were held through the House SpecialCommittee on Globalization and the Congressional Oversight Committeeon Agriculture and Fisheries Modernization (COCAFM), each attendedby civil society. However, like the public hearings in the Tariff Commission,the differentiation between legal and illegal importation and their attendantimpact was once again the point of contention. If it was any consolation,though, the lack of government support in production and marketintervention was highlighted in the inquiries. COCAFM, through its chair,Senator Ramon Magsaysay Jr., carried on continued dialogues andorganized a field visit to Benguet. Though no straightforward resolutionwas laid out, civil society was able to obtain the assurance of the senators,through Magsaysay’s influence, regarding the farmers’ utilization of theACEF.

In sum, civil-society groups were comprehensive in their approach ofengaging the state. With well-defined analysis of the problem, they wereable to properly identify the government institutions where pressure shouldbe applied, thus avoiding needless efforts and misuse of resources. In thecourse of the engagement, the relationship between government and civilsociety underwent various arrangements—from largely collaborative at thelocal level to critical and hostile at the national level. On the whole, though,civil society was able to elicit only minimal response from the government.

Analysis and AssessmentAnalysis and AssessmentAnalysis and AssessmentAnalysis and AssessmentAnalysis and Assessment

Political Opportunities

By and large, civil-society groups strategically exploited favorablepolitical opportunities to engage government and brought their


organizational strengths to bear on a somewhat vulnerable environment.In the policy arena, the engagement process was made possible on thewhole by institutional openings, presence of influential allies, electoralinstability and, to a certain extent, persistent and sympathetic mediacoverage. It is important to point out, however, that the opportunitiesfor mobilization and engagement seized by the civil-society groups inthis study were actually an offshoot of the indefatigable campaignagainst unbridled trade liberalization. As mentioned earlier, civil societyhas assiduously labored for reforms in the economic developmentframework championed by various institutions of the state. In effect,the Benguet vegetable industry stakeholders benefited from the changesin the political opportunity structure given birth to by a largermovement.

Access to political institutions

Notwithstanding the creation of avenues for citizen participationin governance, unequal degrees of openness were rendered by officialstate agencies to civil society for very different reasons. Nonetheless,most of the interaction that took place was attributed largely toinstitutional openings for mobilization and policy influence. The localgovernment’s accommodating posture toward civi l-societyparticipation—especially the farmers and traders—was a naturalresponse, given that it benefits much from the industry. Thus, receptivityby local government was generally driven by economic urgencies. Thelocal government perceives all players in the Benguet vegetable industryas partners to the development of its predominantly rural economy.Moreover, indifference by the local officials to the concerns of theirconstituents, mainly within their kinship and patron-client network,is tantamount to political suicide.

At the national level, the perspective of the bureaucracy with respectto civil society participation differed from one unit to another. As theprincipal agency of the Philippine government responsible for thepromotion of agricultural development, the Department of Agriculture is


theoretically the institution where small farmers could automatically gainaccess and support. The case study demonstrated that it was, indeed, thecase. In fact, DA has been responsive to civil society’s clamor fordemocratizing the trade policymaking process.28 In contrast, having purelypolice-authority function over the ports, the Bureau of Customs has notconventionally enjoyed attention from civil society. In addition, due toendemic and deeply ingrained corruption in the institution, the BoC wasapprehensive and suspicious of groups gaining access and making inroadsinto their operations.

On the other hand, through the inquiries, the Philippine Congressbecame a platform for grievances of various groups with legislators actingas arbitrators. This third-party function of the legislative, in the pretext ofaiding legislation, provided an opening for civil society into the legislature.Furthermore, the party-list system offered a doorway for the marginalizedand underrepresented to take part in the policymaking process. However,there are institutional problems in the legislature that make openness ofthe Congress a matter of contention. One is the very low awareness ofpolicymakers on international trade—the treaties, the jargon and, ironically,even the commitments made by the Philippine government; two, the non-attendance of representatives to committee hearings on trade and tariff-related matters, which clearly confirms their lack of knowledge andalso highlights their lack of interest; three, the legislative mill whichtests the resilience and dexterity of civil-society groups; and finally, theparochial disposition of the Congress as an institution, in which anissue that does not deliver votes is bound to be overlooked (Villanueva2004). In addition, although the legislature has the power to makelaws and to, theoretically, lay down the legal blueprint for the policiesand programs that the executive is mandated to implement, in termsof policy directions in trade, it is the decision of the executive that stillholds. In fact, more often than not, the legislature becomes a mererubber stamp for economic programs and policies that have alreadybeen firmed up by the line agencies, especially the National Economicand Development Agency (NEDA).


Therefore, caution should be applied in portraying theinstitutionalization of civil society participation through ironclad canonsas an immediate political opportunity, which could set in motion interactionwith the state. In the case of the Benguet vegetable industry,institutionalization has only secured the minimum requirement ofproviding the staple ingredient of every democracy—spaces forparticipation—but not policy influence. While the law may appearsufficient, even socially progressive, equally important is the openness ofthe politico-administrative environment to civil society participation inpolicy making (Brillantes 1997). The problem with the main agencies taskedto craft Philippine trade policy, especially on tariff-setting—the NEDA,the Tariff Commission, the interagency TRM, and the DTI—is that afacade of openness to consultation is projected. But in actuality, theseinstitutions are insulated from popular pressure; they merely allow sufficientaccess to give the illusion of democratic practice. Government, particularlythe Ramos administration, instituted protective instruments to shield theseorganizations from external influence and particularistic interests, and fromthe conflicts, setbacks, and media assault produced by open consultation.Thus, trade policy making and implementation have been basically“technocratic” (Aquino 1998, 33), with apolitical managers posing a barrierbetween civil society and the elite planning agencies. The Tariff Commissionis a case in point. While it may seem that civil society can rely onconsultations with the commission for redress of grievances on tariff-relatedmatters, in truth, public hearings are purely fact-finding in nature toaccommodate complaints. The commission may unilaterally set tariffs evenwithout consultations. Related to this, naturally, is the opacity of theseagencies in formulating policies. As they are supposedly protected frompublic pressure, clandestine practices are customary, thereby watering downthe likelihood of participation and influence.29

Presence of influential allies

If the trade policymaking arena is exclusively controlled by theexecutive department, which is elusive to political participation by


dissident groups, how then was civil society able to permeate the state?In the case of the Benguet vegetable industry, the presence of influentialallies, particularly the elite, became vital. In situations whereopportunities are not favorable or hostile, such as the insulated tradepolicymaking and implementation bodies, allies may be useful forprying open these institutions and ensuring that inputs of civil societyare not merely noted but incorporated. Hence, these allies, whocommiserate with or support the objectives of civil society, usually havethe political influence and resources that movements lack—and in somecases, moral authority—which are particularly important during formalpolicy deliberations.

A close look at the engagement process discussed earlier wouldevidently suggest that powerful allies consisted both of officials at thelocal (Fongwan, Kim, Molintas, Sacla, and Uy) and at the nationallevels (Montemayor, Ordoñez, Rosales, and Ocampo) levels; andimportant figures in Philippine civil society (Tañada, Mariano, andthe church as an institution). Although the former are part of the stateapparatus and members of the polity, most of them can be consideredas institutional activists.30 They assured civil society of open channelsfor dialogue and facilitated interaction with well-disposed keyindividuals. Some of the allies are party to the engagement process aswell, which implies that the persona of the leader determines how agovernment agency is responsive to civil society. Certainly, they havetheir own motivations and self-interests (e.g., to further their politicalcareers) in supporting the organization and advocacy of civil societyinvolved in the concerns of the Benguet vegetable industry. Hence, forcivil society, seizing such opportunities could be tantamount to allowingthemselves to be used, wittingly or unwittingly, by certain narrowlymotivated parties or sectors with self-serving interests. Nonetheless,civil society seized the opportunities posed by their individual desiresand they were pivotal in terms of influencing the outcome ofengagement. Furthermore, it is important to note the high degree oftrust and confidence afforded to officials at the local level, something


that may hardly transpire at the national. Trust is not necessarily sinequa non in state-civil society engagement, but farmers and traderscounted on their personal relations with all their key allies, as patronsand friends. Thus, instinctively, the stakeholders singled them out assupporters, subscribing to their analyses and positions of the issue.

Electoral instability

The national elections were contributory to the moderate success ofstate-civil society engagement in the vegetable industry. It was a coincidencethat civil society engaged the state at the time when cleavages within thepolitical elite were prominent, but not solidly frozen, thereby creating ahighly volatile situation for the electorate. This unpredictability encouragedpolitical elites to compete for electoral support and to accommodate diverseconcerns, in which civil society significantly benefited. Althoughfragmentation of elite alignments is often associated with political parties,in a country where the party system is generally weak, the shift in thesupport base of individuals makes them more or less acquiescent to thedemands of civil society.

Why Arroyo took a year since the deluge of imports reachedincalculable proportions to respond to the crisis, which incidentallywas also a year prior to the national elections, could be explained bythis precariousness, especially after Molintas’s pronouncement of avictory for her opponent, Panfilo Lacson, in Benguet. This was alsothe case with Roxas in his effort to cajole the Benguet voters with hispopulist image and with the local government officials as the politicalcosts of inaction in a predominantly rural economy would beinsurmountable. Local politicians are generally more likely toaccommodate civil society than their national counterparts because ofthe more volatile nature of local elections.

Concomitantly, civil society has gained knowledge of the game oftraditional politics, employing quid pro quo and realpolitik in itsnegotiation for tariff reduction and safety nets. Electoral support wasextremely used as a leverage. Strategy-wise, this facilitated the


engagement process. Furthermore, there were advantages in capturingthe political opportunities offered by electoral instability. For example,although discussions on economic issues, such as trade liberalization,have traditionally remained at the margins during elections, given thecandidate-centered campaigns, civil society was able to push vegetableimportation as a major electoral concern for the voting public inCordillera.

Favorable media coverage

The media coverage of the impact of trade liberalization on the Benguetvegetable industry was high for the whole year of 2002, as the inundationof cheap imports and the predicted collapse of the industry surfacedpractically every day in the major broadsheets. Besides the news reports,editorials and opinion sections discussed the problem, most of whichacknowledged the need to institute mechanisms to enhance thecompetitiveness of the industry and protect the agricultural sector in generalfrom the ramifications of liberalized trade. Some newspaper columnistseven engaged the public in sustained debate, running a series of think-pieces on the future of Philippine agriculture, with the Benguet vegetableindustry as a case in point.

Although news coverage achieved balanced reporting as data fedby government sources (i.e., underscoring the persistence of smuggling)were often presented with competing views (i.e., emphasizing theproblem as a result of WTO-mandated trade liberalization), mainlyfrom spokespersons of civil society organizations, overall, the slant wassympathetic to the plight of the Benguet vegetable farmers. This mediaaccess increased the political opportunity for civil society, as it likewisebecame entangled with the struggle over meanings in its attempt toinfluence public policy.

At the time of engagement, the Arroyo administration was absorbedwith the grand design of projecting an image of populism in anticipationof the elections; thus, when the vegetable issue moved into the headlines,the government institutions opened their doors. In the experience of civil-


society groups involved in the issue of the vegetable industry, publicsentiment in their favor became an instrument of pressure, which hastenedthe engagement process as well as educated the populace on the implicationsof agricultural trade liberalization.

Strategies

Civil society utilized a range of tactics, which can be roughly classifiedaccording to the degree to which such approach targets the exact governmentinstitutions and individuals involved in the vegetable industry (direct andindirect) and the level to which these submit to rules and procedures ofengagement established by law (formal and informal). Mainly, civil societyaction fall within the broad categorizations: formal and direct, informaland direct, and informal and indirect.

Formal and direct engagement was employed merely to take advantageof the conventional and institutional mechanisms for direct participationand policy influence. For instance, at the local government level, this canbe seen in BFFI’s membership in the Benguet Vegetable Council. By thesame token, civil-society groups participated in the consultations at theDA, DTI, and Office of the President; and in hearings held by Congressand the Tariff Commission. At the level of policy implementation, byvirtue of administrative orders and memorandums, civil society wasincluded in the official anti-smuggling operations of BoC and other adhoc bodies. Basically, the logic was to work within the official gatewaysestablished by laws and procedures, in fulfillment of democratic goals andobjectives.

However, the formal process draws attention to the vulnerabilityof civil society. The study has undoubtedly shown that the Achilles’heel of civil society in the formal battleground of policy engagementcomes from its inadequate organizational resources, mainly properinformation to corroborate its positions. In policy engagement,information becomes a powerful weapon in various ways. First, onlythrough accurate data can one formulate a clear analysis of and positionon the issue. Articulated positions without basis or evidence can likewise


compromise public support. While it may seem prosaic, civil society,in some cases, has the tendency to ignore the importance of data andinformation. This obviously affects the outcome of its engagementbecause without proper evidence, civil society can only bank on bannersand rhetoric as a strategy (Villanueva 2004). With neoliberalismcemented in the bureaucracy, civil society cannot merely debate withgovernment at the level of economic ideologies.31

Informal and direct strategies of engagement were used to access hostileinstitutions, through the support of influential allies. Central to this isbuilding working relations with the heads of concerned agencies throughinformal meetings and creating rapport with their staff. This method wasprofoundly used by civil society, as the formal process was, for the mostpart, cursory and undertaken only to comply with the statutes and toplacate the demand for political participation.

A high level of expertise has been achieved by civil society in informaland indirect tactics, which revolved mostly on influencing the media agenda.With the media capitalizing on the issue, civil society also utilized thisunofficial opening for policy engagement. Indeed, media advocacy becamea huge component of civil society’s strategy, which consisted of bombardingthe public with statements, consciously using sound bites (such as marijuanafor vegetables) and farmers’ anecdotes to give the effects of importation ahuman face, and even building good relationships with the press, to gettheir message across and, more significantly, to arouse public outrage forgovernment’s inaction and lack of support for civil society.32 McCarthy,Smith, and Zald (1996) rationalize the necessity of shaping public opinionto collective action.

An essential task… is to frame social problems and injustices in a way thatconvinces a wide and diverse audience of the necessity for and utility ofcollective attempts to redress them…While movements’ ultimate targetsare typically policymakers, movements must mobilize people and resourceswithin the wider society in order to influence this authoritative elite. Thesethird parties include both the mass public and reference elites, the peoplewith whom the authoritative elite interacts and consults. (291)


Outcomes

Based on the tactical objectives laid down earlier, the dismissal of apublic official involved in smuggling activities, increase in tariff rates from7 to 25 percent, and provision of a competitive-enhancement package forthe Benguet vegetable industry demonstrate the presence and extent ofstate-civil society engagement. Judging from these accomplished goals, itcan be construed that the relations between state and civil society inaddressing the impact of trade liberalization on the sector has beensuccessful. However, a more circumspect analysis reveals that not all policyactions should be taken at face value.

The smuggling scourge continues, so long as corruption is systemic.Although there has been a decline in the illegal importation of vegetablessince the active involvement of traders’ organizations in the monitoring ofCustoms procedures (Kim 2004), no official implicated in smugglingactivities has been convicted.33 Despite the fact that Arroyo took politicalaction on the matter by relieving Adiong of his duty, smuggling remainsthe norm in a bureaucracy that is accustomed to corruption, especiallywith loopholes in the Tariff and Customs Code and tolerance for suchpractices. For this reason, civil society is persevering in its lobby to expeditethe passage of the Anti-Smuggling Bill, which provides for systematicsolutions and stiffer penalties—both fine and imprisonment—for outrightand technical smuggling, and for the creation of a special body againstsmuggling composed of heads of relevant government enforcement agenciesand private sector who will be appointed by the president.34

With regard to the tariff rates increase, although civil society emergedvictorious due to an executive order issued by the president to increase therates of duty of imported semitemperate vegetables from 7 percent to20-25 percent, the fact is every EO has a shelf life. In effect, this wouldimply the need for a new round of engagement once the order expires.From another angle, though, continuous engagement could contribute tothe consolidation and sustained action of movements, which are at leastunified on the issue of tariffs. But at the level of policy influence, EOs onlyserve as transitory measures with very short-term impact. The possibility


of lengthening the period of the EO is still indeterminate, given the fullimplementation of GATT-UR by 2005, continued application of theAFTA-CEPT, and ongoing negotiations on bilateral trade agreements.

This scenario makes the competitive enhancement package all the moreimportant. The Benguet Cold Chain System project was finally installedin the first quarter of 2004.35 In addition, the government approved aPHP 25.19 million loan from the ACEF for a project in Benguet thatwould modernize and ensure year-round production of cut flowers, cut-foliage, and high-value vegetable products, thereby boosting chances ofCordillera-grown crops to compete with imported farm commodities.36

But while the accomplishment in this aspect is commendable, once more,these forms of government support were long overdue, such that it took anear-bankruptcy of the sector for them to be even deemed as necessary.

Cynicism on the policy “victories” of the engagement is, however,balanced by encouraging results on other dimensions, which can beinterpreted as both inadvertent and intentional. These spillover effects aremanifest in three aspects: industry, civil society, and political opportunity.The most evident of which is the state’s recognition of the vegetable sectoras an industry. Indeed, vegetables have been historically at the periphery interms of agricultural development, compared to other crops. At this point,there is a clear appreciation of its importance economically and politically.The players—farmers, traders, local governments, etc.—have now takenthe cudgels of upholding its survival in the global market; a concretemanifestation is a national consultative summit, which started in 2003, toformulate a development blueprint for the sector. Whereas the interests ofthe vegetable industry were overlooked in the previous trade agreementsthat the Philippine government entered into, this was not the case anylonger as vegetables are not included in the Early Harvest Program betweenthe Philippines and China signed in April 27, 2005, even though raw andunprocessed agricultural products are covered by the agreement (Go 2005),as a result of the political muscle flexed by industry participants. Second,civil society in the process contributed to the strengthening of the grassrootsthrough political organizing and raising social awareness, in order to hold


government accountable and responsive to community needs. Itconsolidated and expanded its base, thereby ensuring power both innumbers and political influence. Moreover, despite differences ininterests and tactics, the relationship among the civil-society actors wascollaborative, based on mutual needs and common goals, and theiractions were complementary and, in most of cases, dependent on eachother. Finally, civil society in this study has also created or expandedopportunities for others.37 Having benefited immensely from theopportunities produced by the burgeoning movement against aggressiveliberalization, the Benguet stakeholders and other civil societyorganizations have also exposed and gauged the points of weaknesseswithin the political system that can be arrested by groups of similarinterests and objectives, or by their challengers.

ConclusionConclusionConclusionConclusionConclusion

This study has shown that the strategies, processes, and outcomes ofcivil society in its engagement with the state rest upon external factors,which are neither constant nor permanent, and that the changes couldfacilitate, hinder, or totally obstruct collective action. In the case of thecivil society players in the Benguet vegetable sector, they were undulyoptimistic and more or less responsive to changes in political opportunitystructures. However, while there are changes in the political opportunitystructures which civil society can take advantage of, there are stable structuresin Philippine polity—submission of the state to market forces—thatfrustrate consequential and long-term actions of civil society.

Dryzek (1996) suggests that for movement groups to engage effectivelywith the state, the aims of the movement groups should be in some waymatched with imperatives such as economic growth, legitimacy, or security,which are sought by all governments regardless of political leanings toensure stability. If there is little or no connection between movement goalsand state imperatives, inclusion in state fora presents risks of cooptation.The Philippine government has been in an uphill battle in its fulfillmentof economic development, but unfortunately, the course it has taken is


contradictory to what civil society judges as the right path. While it seeksgrowth through the doctrine of laissez-faire, civil society, on the other hand,pushes for state regulation of the market, which implies strong faith in theability of the state to effectively manage the market. However, alongsidethis confidence in the state’s regulatory functions is an equally strong distrustof its governance role, based on its failure to implement and enforce policiesand laws, which have led to the pervasiveness of smuggling activities. Hence,civil society is ostensibly ambivalent on the state’s position in the scope ofproblems confronting the vegetable industry.

This underpins the assertion put forward earlier regarding opennessof the state as a function of policy in question. It is axiomatic why therewas a plethora of government-civil society partnerships against smuggling,while civil society continues to be hammered or repudiated in its lobby fortariff rates increase. Anticorruption has been a major plank ofadministrations following the transition to democracy, in which theantismuggling project in tandem with civil society fits perfectly. On theother hand, the increase in tariff rates of imported agricultural produce,which civil-society groups in this study are advocating, threatens thefoundation of the Philippine government’s economic paradigm ofneoliberalism, of which the President is a strong advocate. Reinstatementof protective measures for agriculture, which in effect means reversal oftrade liberalization, would be a silent but open admission of MacapagalArroyo’s oversight on economic planning, a step which she is not enthusiasticabout. Hence, the government’s accommodation of civil-society groupswas more symbolic than substantive, as illustrated in the perfunctoryconsultative processes on tariff setting with negligible influence of civilsociety on policy outcomes.

In spite of this, characterizing the relations between state and civilsociety in this study cannot be reduced to simplistic dichotomies of“partnership” or “opposition.” Both state and civil society areintertwined in complex forms of interaction in which antagonism andcooperation often occur simultaneously. Difficulties abound in engagingstate agencies that perform the roles of policy advocates and regulators.


This is especially the case with agencies involved in promoting businessconfidence and supporting capital accumulation, which more oftenthan not, are in conflict with social movements because of the former’sextensive political influence in the polity and their agenda reflective ofthe interests of corporations (Stearns and Almeida 2004). In such acondition, the relationship between the state and civil society isantagonistic; the token accommodation of the state is merely to manageconflict.

In contrast, the engagement of civil society with the local governmenthas undoubtedly shown much potential. Hostility, suspicion, andmistrust—which often characterize state-civil society relations at the locallevel on controversial globalization-related issues such as mining and dambuilding—were stymied. What transpired was what Stearns and Almeida(2004, 479) refer to as “state-social movement coalition.”38 The impetusfor state and social movement actors in forging such coalition diverges,but in the case of the problems of the Benguet vegetable industry, it wasthe seriousness of the local economic situation that prompted the politicaldemand making. The probability of civil society forming an alliance withlocal government is greatest when the cause of civil-society groups hasa widespread, direct, and negative effect on the locality (Stearns andAlmeida 2004). In any case, a certain “state-society synergy” (Evans inMagadia 2003, 11) existed between the local government of Benguetand civil-society organizations. Although they each enjoyed distinctcapacities and power that the others do not have or only partially possess,they were “able to enhance, and not challenge, oppose or cancel out,each other’s efforts” (Magadia 2003, 11). However, this seeminglysynergistic relationship was forged merely to collectively muddlethrough the ordeal brought about by trade liberalization. Rather thanengage in the politics of resistance, local government and civil societyembraced coping strategies that somehow legitimized the economicdevelopment track pursued by the Philippine state.

In sum, engaging the state in the era of globalization poses morechallenges for civil society organizations compared to the past.


Agricultural trade liberalization is a huge component of the neoliberalagenda, which has been the guiding principle of past and presentadministrations—unequivocally expressed in their development plansand also supported by a large number of intended beneficiaries, theconsumers, and a few local industries profiting from cheap agriculturalimports. Hence, given its marginal status, dissident groups wrestlingto influence trade policy are dismissed as protectionist ideologues keenon reverting the country to a planned economy where the state plays abig role. Their relations with the state on trade-related matters such asimportation remain confined to issue-specific and moderate reformsthat are meant only to pacify the uproar and not to comprehensivelyaddress the problem.

AcknowledgmentAcknowledgmentAcknowledgmentAcknowledgmentAcknowledgment

I thank Liza Gobrin, Linda Gobrin, and Pablo Rosales for theirgenerous assistance and support in the conduct of the fieldwork for thisstudy. I am also grateful to Alfredo Alangdeo and John Kim for sharingtheir records on their engagement with various agencies, majority of whichwere hard to obtain elsewhere. Mars Mendoza helped correct factual errorson the earlier draft of this paper.

NotesNotesNotesNotesNotes

1. In 2004, agriculture accounted for about 20 percent of total gross domesticproduct (GDP), contributing 0.96 percentage point to total GDP growth(National Statistical Coordination Board 2005). Estimated at 11.37 million,the sector’s share to total employment is 36 percent (BLES 2005).

2. According to Lantican (1998), the Philippines has a comparative advantage inthe production of select fresh vegetables and vegetable seeds. From 1999 to 2002,exports averaged 24 million kilograms. Primary exports were shallots, asparagus,and fresh or dried manioc/cassava (Ibon 2003; Guzman 2000). Foreign exchangeearnings in 1995 and 1996 posted very encouraging records for both volume(51,107 tons in 1995 and 39,060 in 1996) and value (USD 34 million in 1995and USD 35 million in 1996). Fresh/chilled vegetables accounted for the bulk.However, due to limited production, the cultivation of vegetables has been largely


meant for local consumption. Only less than 1 percent of the total supply ofvegetables is exported.

3. Semitemperate vegetables include broccoli, cabbage, carrot, cauliflower, celery,lettuce, mushroom, and potato.

4. Vegetable farmers in Benguet supply from 20 to 25 percent of the total vegetableneeds of the Philippines (Ilagan 2003). The province accounts for 67 percent ofthe volume of production of white potato, 64 percent of cabbage, and 75 percentof carrots for the whole country in 2000 (PIDS 2004). Northern Benguet townsproduce 20 tons of carrots and 50 tons of potatoes a day (Dumlao 2002). Interms of employment, in the rural areas, 60 percent of Benguet’s 322,000 farmersget their livelihood from vegetable farming (Alcantara 2001; Cabreza 2002a),representing up to 40,000 farm families (Cabreza 2002a).

5. The “high value crops” development framework is a market-/private sector-ledstrategy, with minimal subsidies to vegetable growers, under a liberalized tradepolicy. It further necessitates the adoption of modern technology in production(Lantican 1998; Aquino 2003) and rationalization of resources to maximizeagricultural productivity by virtue of Republic Act 8435 or the Agriculture andFisheries Modernization Act of 1997.

6. Actually, Lewis (1992) claims, “the Benguet vegetable farmers became entangledin the world market economy not primarily as producers for a global market,but rather as consumers of agricultural supplies produced in the metropolitanstates” (143-44), dominated by Hoescht and Bayer (German), Shell (Anglo-Dutch), and Union Carbide (American).

7. In Cordillera, many vegetable farmers source their capital from a landholder ortrader, usually a close friend or relative. Some own the land they till, while otherswork as tenants or rent the land for cultivation. Farmers buy inputs either fromtraders or middlemen in trading posts, and sell their produce to the same trader.The trader would naturally get half of the farmer’s earnings (Ibon 2003).

8. Thirty to 50 percent of vegetables are registered as postharvest losses (Ibon 2003).9. For example, in 2000, while the farmgate price of carrots was pegged at

PHP 16.33 per kilo in Benguet, its retail price in its primary market, Manila, isPHP 43.70 per kilo (PIDS 2004).

10. Domestic demand and consumption of vegetables in lowland areas has beendecreasing by 40 to 60 percent since 1999 (Ibon 2003).

11. Potato is the leading vegetable imported, with 13 percent.12. Retailers were forced to sell their commodities at much lower prices than their

imported counterparts. Normally, during typhoons in early July, prices of vegetables

Protests and Perceived ThreatsProtests and Perceived ThreatsProtests and Perceived ThreatsProtests and Perceived ThreatsProtests and Perceived Threatsin the Hog Industryin the Hog Industryin the Hog Industryin the Hog Industryin the Hog Industry

Joel F. Ariate Jr.

Pig-waste management and disposal, controlling foot-and-mouthdisease (FMD) and other zoonotic diseases (i.e., animal diseasesthat can be transmitted to humans), food safety concerns, and the

issue of social equity are the pressing concerns that the Philippine hogindustry must address at present, according to a recent study made for theUnited Nations Food and Agriculture Organizations (UNFAO) (Costalesand Delgado 2002). The issue of social equity best sums up theinterrelatedness of these concerns:

The survival of the smallholders in pig production depends primarilyon political decisions to finally enforce zoning ordinances, effluentstandards, and environmental pollution regulations, and only to a lesserextent on the engagement in international trade agreements, or ondomestic market developments influencing the scaling up of productionsystems to the disadvantage of smallholders. (Costales and Delgado2002)

However, civil-society actors in the hog industry are onlytangentially concerned with these issues. These actors are mainly thehog industry players themselves. As such, the civil-society actors in thehog industry have focused primarily on one issue: for them not to suffera “profit squeeze.”

73


As articulated by more vociferous and visible civil-society actors inthe industry, this concern has been expressed as a fight against smugglingof other meat products, a fight against any increase on meat imports, afight for greater importation of corn, and a fight against low farmgateprices. To justify these “fights,” the big and organized industry playerscum civil-society actors have advanced loftier causes. These advocatesclaim to represent the more than three million backyard hog raisersthat produce more than 70 percent of the country’s total hog inventory.If the smuggling and importation of meat goes unchecked, hog raiserswill be selling their livestock at a loss. If nothing is done about theperennially low supply of corn, thus meriting its high market price,then the Filipino consumers cannot ask for a lower price of pork sincecorn constitutes 50-60 percent of hog feeds. Either the millions of hograisers suffer irrecoverable financial losses or the millions of consumerslose pork in their food basket. Economic gain or food security: theseare the two main issues that underpin the so-called fights of civil-societyactors in the hog industry. And these are often waged against the stateand occasionally against players from other industries that are alsoengaged in providing food for the Filipinos.

Where is globalization in all these? In the hog industry, the polysyllabicword globalization has been reduced to three two-syllable words: tariff,import, quota. These trade issues are what basically draw civil-society actorsin the industry to engage the state, specifically its legislative and executivebranches, the branches that determine how much tariff to impose on whatcommodities and how much of which commodities to import. However,prevailing international trade agreements structure the state’s engagementwith civil-society actors in the hog industry.

Even the civil-society actors in the hog industry apparently understandthe state’s predicament. For example, in 2003, tariffs on imported processedmeat have been reduced to 0-5 percent as an effect of the 1992 Associationof Southeast Asian Nations (ASEAN) Free Trade Area and CommonEffective Preferential Tariff (AFTA-CEPT) Agreement; for whatever protestthere was it did not go beyond the level of a pip. “This is in spite of the

Protests and Perceived Threats in the Hog Industry 75

possibility that increased importation of canned meat products and otherprocessed meat could result in weaker demand for domestically producedmeat, once domestic processors find themselves losing market share tocompeting imports” (Habito 2002). In 2009, lower tariff rates will takeeffect on all meat products, posing a more direct threat to the hog industryand yet at the moment, no civil-society actor in the hog industry is makingany significant move on this issue.

This situation foreshadows the kind of engagement the state and civil-society actors in the hog industry had and will have in the context ofglobalization. It is and will be a selective engagement on issues that civil-society actors believe they can still maneuver the government to accepttheir own terms. Moreover, since these civil-society actors are industryplayers themselves, issues of economic viability more than issues of socialequity will be the focus of their engagement with the state. Hog-industryplayers have the financial and organizational advantage over the other smalland un- or semi-organized industry actors to wage campaigns on someissues that involve the state’s intervention. However, international tradeagreements had and will vitiate the engagement of the state and civil-societyactors.

This chapter will look into two interrelated aspects of state-civil societyrelations in the Philippine hog industry in the context of globalization.The first aspect deals with how civil-society actors have engaged officialstate agencies through various formal and informal strategies of dialogue,negotiation, and bargaining on specific issues or concerns. The secondwill look into the extent civil-society actors have been able to influencegovernmental policy making. However, with international trade agreementsalready in place, and since “it is one thing to argue that NGOs are affectingthe political process [and] … quite a different matter to argue that civilsociety is actually shaping the policies that emerge from the process”(Silliman and Noble 1998, 302), this second aspect will not be anenumeration of policy transfers. Rather, it will be a look into the state’sresponses to specific demands from the hog industry cum civil-societyactors.


Pigging Out on PorkPigging Out on PorkPigging Out on PorkPigging Out on PorkPigging Out on Pork

The Philippine hog industry’s growth in the last two decades is mainlydriven by domestic factors, namely, the more than 2 percent annualpopulation growth rate and the emergence of urban areas. It was, and stillis, a demand-driven growth. A weakening in demand caused by importationand smuggling of low-priced meat is the most immediate threat to the hogindustry’s profitability.

Production

In an in-depth study conducted for the United Nations Food andAgricultural Organization (UNFAO), Delgado and Narrod (2002)conclude that the almost unhampered growth of the Philippine hog industryin the past two decades (table 1 and figure 1) is related to two interrelatedphenomena: the continuing high population growth rates and rapidurbanization.

Robust growth in the demand for meat in the last two decades in thePhilippines has been propelled mainly by continued high population growthrates, at about 2.3 [percent] per annum and the rapid rise of urbanization,particularly in the provinces around the National Capital Region (MetroManila), covering the regions of Central Luzon and Southern Luzon. Thereare also major urban centers in the south, Metro Cebu in the Visayas islands,and Metro Davao in the southern island of Mindanao. Demand growth formeat has been impressive, even with modest and often interruptedimprovements in per capita incomes. (Delgado and Narrod 2002)

In 1980 the average pork consumption per person was 9.17 kilogram;now the average hovers around the 18 kilogram per person mark, an increaseof about 85 percent (table 1). Because of market demand, hog productioncontinues to grow, though at times the industry’s growth rate seems totaper off then bounce back again (figures 1 and 2). A cursory glance atfigure 2 will reveal that commercial hog producers seem to have experienceda bumpier growth than backyard or small-scale hog raisers. The Bureau ofAgricultural Statistics (BAS) defines backyard or small-scale livestock farms


Table 1. Pork supply and utilization in the Philippines, 1980-2002

Supply (in metric tons) Per capita utilization ofYear pork as food

Production Imports Total (kilogram per person)

1980 448,000.00 1,000.00 449,000.00 9.17

1981 548,000.00 6,000.00 554,000.00 11.03

1982 523,000.00 3,000.00 526,000.00 10.23

1983 564,000.00 2,000.00 566,000.00 10.74

1984 590,000.00 50.00 590,050.00 10.92

1985 508,000.00 1,000.00 509,000.00 9.20

1986 589,000.00 1,000.00 590,000.00 10.41

1987 641,000.00 1,000.00 642,000.00 11.05

1988 713,000.00 3,000.00 716,000.00 12.04

1989 804,000.00 4,000.00 808,000.00 13.31

1990 824,545.01 1,177.01 825,722.02 13.26

1991 845,189.00 741.47 845,930.47 13.29

1992 845,256.46 793.38 846,049.84 13.00

1993 880,944.91 418.47 881,363.38 13.31

1994 921,760.63 695.37 922,456.00 13.28

1995 969,862.46 2183.42 972,045.88 14.00

1996 1,035,808.19 6072.96 1,041,881.15 14.72

1997 1,085,544.33 10,369.22 1,095,913.55 15.13

1998 1,123,747.85 12,592.88 1,136,340.73 15.36

1999 – – – 15.91

2000 1,212,536.00 32,338.00 1,244,874.00 16.09

2001 1,265,888.00 22,022.00 1,287,910.00 16.33

2002 1,332,347.00 25,636.00 1,357,983.00 16.88


as farms holding not more than twenty heads of adult-equivalent animals.Is this the mere workings of the domestic market or could this be attributedto the state’s trade regime? This will be discussed later in the paper.


Since 1998, the Philippines has been producing more than 10million pigs a year. At present, the country’s hog inventory stands at12.5 million; nearly 80 percent of this number comes from backyardor small-scale hog raisers. The industry’s workforce is estimated at fourto five million workers (the backyard hog raisers alone number aroundfour million workers).

Despite the continuing increase in production, the price of hog inthe market—farmgate, wholesale, or retail price—also continues to goup (figure 3). This implies a rather stable market that could not beeasily deterred by a simple price increase. The Department of Scienceand Technology’s Swine Information Network argues that “thepreference of Filipino consumers for fresh warm or chilled pork overfrozen pork gives the local industry market assurance of its products”(Swine Information Network 2003). It must be also pointed out thatpork accounts for about 60 percent of the country’s total meat demandand has consistently dominated other livestock industries in terms ofvolume and value of production.

Hogs remain the largest source of meat in the country’s livestockindustry, making up about three-quarters of Philippine livestock productionwith a PHP 92.67 billion value of production in 2003. As of 2004, hogsrepresent 15.14 percent of the total value of agricultural production basedon current value.

However, the Philippines’ undeterred population growth and itscontinuing urbanization—the prime drivers of pork consumption—mayin the end trigger the hog industry’s downturn. Hogs and people willcompete for land and water. As more areas become urbanized, landspreviously allotted to hog farming will give way to the people’s housingrequirements and health concerns. With limited area for hog production,the government might strongly consider pork importation. It will be thenthat the domestic hog industry will fully feel the brunt of the liberalizedtrading environment. Thus, unless new technologies and policies are enactedwith this scenario in mind, the domestic hog industry might be enjoying afalse sense of confidence on the Filipinos’ love for pork.


0.00

50.00

100.00

150.00

200.00

250.00

300.00

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

Pri

ces

in

Farmgate Price Wholesale Price Retail Price

Industry Structure and Stakeholders

Habito (2002) identifies seven major stakeholders in the domestic hogindustry: the hog farmers (both commercial and backyard), the farmworkers, the feed millers (both large—and usually organized—integrators,and the smaller and usually independent feed millers), the consumers, thegovernment, the nongovernment organizations (NGOs), and the country’strading partners in the international market. The meat processors,slaughterhouse operators, and the hog and meat dealers can be added tothis list.

The hog farmers, in their attempt to make their business profitable,would like to have a sure and inexpensive access to inputs necessary ingrowing hogs, like feeds, biomedical supplies, capital, and labor. A secureand steady growing market must also complement the hog farmers’ lowproduction cost if maximum profit is to be gained. The same sentimentwill be true among farm workers. The farm workers are expected to be

Figure 3. Average price of hog in the Philippines, 1980-2004


1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004


strong allies of the hog farmers since the former depend on the latter fortheir job and income security.

As the provider of one of the most basic production components, thefeed millers’ interest is expected to be closely aligned with the hog farmers’.And like the hog farmers, the feed millers’ main interest is to secure asufficient and stable supply of raw materials coupled with an ever-expandingmarket, i.e., the hog farmers.

Habito’s (2002) inclusion of the country’s international trading partnersas one of the key stakeholders in the hog industry is quite telling of theissues that the industry faces owing to globalization:

Figuring prominently in the landscape are the country’s trading partners,who normally want to ensure easy access to the domestic market, inorder to maximize their own citizens’ sales, and therefore incomes,obtained from the trading relationship. At the same time, they wouldprefer to restrict access to their own domestic markets by their foreigntrading partners, for the sake of protecting the economic interests oftheir domestic citizens. While distant, these particular stakeholders canprove to be more powerful and influential than those who are withinthe country itself.

Given the dynamics of the domestic hog industry, it will not behard for some foreign traders to exert their influence on the domestichog industry. For instance, most of the commercial hog farmers andfeed millers look favorably on corn and soya imports, the same waymeat processors support meat imports. This does not mean, however,that they all are in the same boat. Hog farmers and feed millers stronglyoppose any increase in meat importation since this will lower the priceof pork in the market. The meat processors’ usual retort: they will notgo for the imported meat if the domestic supply of pork is adequateand reasonably priced.

More than asking for an adequate supply and reasonable price, hogand meat dealers and slaughterhouse operators are also after a high priceof pork since their income rests on processing hogs and preparing pork forconsumption. However, in a limited locale, having a high supply of hog


usually causes a dip in retail price. To remedy the situation, hog and meatdealers must rely on their initiative and business acumen to create a situationin which profit could be realized. The most common way to achieve this isto link areas with a high supply of hog to those with low hog productionyet with a high number of pork consumers—thus the flow of hogs fromrural and peri-urban areas into the city.

The government and the NGOs (the civil-society actors) are supposedto mediate the interaction of the previously mentioned stakeholders asthey also continuously engage each other on issues concerning the industry.This is not, however, to imply that they are on an equal footing. In mostissues confronting the industry, the power to decide and to enforce thosedecisions rests on the government. The civil-society actors can only try toinfluence this decision the best way they could.

The consumers ideally should benefit from the action of all thesestakeholders, that is, they are able to obtain quality pork products at a lowprice.

Globalization and the Hog IndustryGlobalization and the Hog IndustryGlobalization and the Hog IndustryGlobalization and the Hog IndustryGlobalization and the Hog Industry

If the Philippine hog industry is driven by domestic factors likepopulation growth and urbanization, what issues confronting the industrycould be clearly attributed to globalization or to its reigning economicform, trade liberalization? Current literature argues that in the currentliberalized trade regime, the local livestock industry as a whole is at riskbecause of the rapid increase in meat and meat products importation (Bello2003; Mendoza 2003; Obanil 2003; Yabut-Bernardino 2002; ThePhilippine Star, October 27, 2002). These studies, however, must be takenwith a bit of skepticism despite their engaging polemical tone that lash outon trade liberalization. These studies give undue emphasis on the dramaticincrease in meat importation but do not correlate this with the continuouslyincreasing total domestic hog production, the price of hog and pork thatdoes not taper off, and the continuing penchant of Filipinos for pork asseen in per-capita pork consumption (table 1 and figures 1 and 2).


An Industry in Peril?

In two industry situationers made by the Swine Information Network(2003) of the Department of Science and Technology (DOST) and theLivestock Development Council (2002) of the Department of Agriculture(DA), only one issue rooted in trade liberalization was identified: the threatof meat imports. Left unmentioned, however, was the twin evil of meatimportation: the smuggling of meat products. Yet, even if the discussion islimited to pork importation, the situation is disturbing if taken from thepoint of view of the hog raisers:

In terms of carcass weight equivalent, total pork imports grew by 76 percentannually from 1995 to 2000. (Note: The year 1995 was a watershed as thequantitative restriction on pork imports was lifted.) The highest advancewas posted in 1996 when the FMD outbreak bloated pork imports by morethan 250 percent from only 2,000 tons (carcass equivalent) in 1995 to7,000 tons in 1996. Imports further went up in later years following thelifting of import restrictions. Tariff on pork products is 30 percent at in-quota volume and 60 percent at out-quota volume in 2001, down from 30percent and 100 percent in 1995. Tariffs will converge at 30 percent in2004.

From 1990 to 1994 (pre-GATT period) the average growth rate oftotal hog imports was -7 percent. This increased to 134 percent during thepost-GATT period of 1995 to 2000. The major sources of frozen pork(carcasses/half carcasses, hams, shoulders and cuts) were Denmark, Canada,United States, Korea and Australia. This means that, strategically, the swineindustry must address the threat of imports. (Livestock Development Council2002)

In the presence of all these low-priced meat imports, a shift inconsumption pattern may occur where pork from domestic farms will beless preferred by consumers owing to its relatively high retail price comparedto low-priced beef, buffalo meat, and poultry meat imports.

Another development in hog production also endangers the viabilityof domestic hog farmers. This is the “establishment of large-scale (1,000to 120,000 sow level) integrated pig farms by foreign investors in free portzone[s] using imported breeder stocks, technology, and other production


inputs, [which in effect] is an indirect importation of pork with minimalor no tariff at all” (Swine Information Network 2003). Are thesedevelopments which are perceived to be detrimental to the local hogindustry already taking their toll?

To effectively answer this question, it is necessary to properly sketchthe trade policies underpinning the domestic hog industry.

Trade Policies

Since the inception of Tariff and Customs Code in 1957, the localhog industry has experienced varying degrees of trade protection fromthe government. Using the tariff imposed on products in direct marketcompetition with pork, i.e., imported pork, live hogs, and processedmeat, it is reasonable to argue that from 1957 to 1986, the local hogindustry was minimally protected. Then, an increasing degree of tradeprotection was instituted from 1986 to 1995. However, this protectionhas steadily gone down and would soon reach a very minimal level dueto the country’s WTO commitments ratified in 1995 (table 2) (Habito2002).

Tariff rates on imported pork, hog, and processed meat have shownsteep climbs and sudden dips. However, regardless of the tariffprotection, domestic hog production and pork consumption have grownsteadily. In 1980, domestic production stood at 448,000 metric tons,at present 1.3 million tons; in 1980, the average annual porkconsumption of a Filipino was 9.17 kilos; now, around 17 kilos a year(see table 1). Though this cannot be considered as an incontrovertibleproof, the growth in domestic hog production and pork consumptionsupports the view that the domestic demand has been strong enoughto beat the previous threats of meat and hog imports (and smuggling).Whether this will still be true after 2009 remains subject to inferencesand the usual economic projections. In making these projections, twoparticular trade agreements must be strongly considered: the ASEANFree Trade Area-Common Effective Preferential Tariff (AFTA-CEPT)and the country’s commitments to the WTO.


AFTA-CEPT

By 2010, the six original member-countries of the ASEAN—BruneiDarussalam, Indonesia, Malaysia, Philippines, Singapore, and Thailand—will be levying a 0-5 percent tariff rate on most commodities being tradedamong them as part of their Common Effective Preferential Tariff (CEPT)scheme (ASEAN Secretariat 2002, 1). Newer members like Vietnam, Laos,Myanmar, and Cambodia will follow suit not later than 2015. This is inline with the establishment of an ASEAN Free Trade Area (AFTA), whichthe ASEAN agreed upon in 1992. The AFTA aims to “eliminate tariffbarriers among the Southeast Asian countries with a view to integrating

Table 2. Tariff protection for the hog industry

Year Percent of tariff imposed on products indirect market competition with pork

Pork Live hogs Processed meat

1957-1972 15 0 0 (corned beef only)

1972-1980 10 10 100

1980-1986 5 – –

1986-1991 20 – –1991-1993 30 30 (except breeding –

animals which werelevied a 3 percent tariff )

1993-1994 50 – –

1994-1995 40 – –1995-1997 30 (MAV in-quota) 40-60 (depending on –

weight)100 (MAV out-quota) –

1997-2004 30 (MAV in-quota)

60 (MAV out-quota) 35-45 0-52004 30 (MAV in- and

out-quota)2009 0-5

Sources: Habito 2002; Yabut-Natividad 2002.


the ASEAN economies into a single production base and creating a regionalmarket of 500 million people. The agreement on the CEPT scheme of theASEAN Free Trade Area requires that tariff rates levied on a wide range ofproducts traded within the region be reduced to no more than 5 percent.Quantitative restrictions and other nontariff barriers are to be eliminated”(ASEAN Secretariat 2002, 1). AFTA-CEPT covers manufactured andagricultural products. However, the lowering of tariff rates on tradablecommodities will not be done in one blow.

The CEPT is the mechanism by which tariffs on goods traded within theASEAN region, which meet a 40 [percent] ASEAN content requirement,will be reduced to 0-5% by the year 2002/2003 (2006 for Vietnam, 2008for Laos and Myanmar, and 2010 for Cambodia). The tariff reductions aremoving ahead on both the “fast” and “normal” tracks. Tariffs on goods inthe fast track were largely reduced to 0-5% by 2000. Tariffs on goods in thenormal track will be reduced to this level by 2002, or 2003 for a small numberof products. Currently, about 81% of ASEAN’s tariff lines are covered by eitherthe fast or the normal track. (Unites States-ASEAN Business Council 2005)

Besides the “fast” and “normal” tracks in tariff reductions there arealso three ways of including or excluding a tradable commodity in theCEPT scheme. A tradable commodity can be put in the temporary exclusionlist, classified as a sensitive agricultural product, or be generally excludedfrom the whole scheme. Products under the temporary exclusion list arethose that comprised the bulk of an ASEAN country’s tradable commoditiesand whose tariffs will be lowered to 0-5 percent by 2003. Those listed assensitive agricultural products are commodities produced by ASEANmember-countries that they want to delay inclusion in the AFTA. “A smallnumber of sensitive agricultural products will be extended a deadline ofthe year 2010 for their integration into the CEPT scheme. In an agreementthat has yet to be fully spelled out, the process of tariff reduction on theseproducts will begin between 2000 and 2005, apparently depending on thecountry and the product” (Unites States–ASEAN Business Council 2005).An ASEAN member-country has an option also to totally exclude somecommodities from the CEPT. This exclusion is usually availed by member-countries for reasons of “national security, protection of human, animal or


plant life and health, and of artistic, historic, and archeological value”(ASEAN Secretariat 2002, 2). However, Habito explains that “thoseproducts in the Exclusion List were to remain subject to the previouslyexisting ASEAN Preferential Tariff Agreement (ASEAN-PTA) whichprovided for Margins of Preference (MOP) or progressively increasing tariffdiscounts on the tariff rates imposed on other ASEAN members” (2002).With the Philippines classifying fresh pork and poultry meat as sensitiveagricultural products, tariff reductions on these commodities will nothappen until 2009. Thus, the full impact of the AFTA-CEPT on thedomestic hog raisers is still to be felt.

WTO

In ratifying the GATT-Uruguay Round Treaty in 1994, which includesthe Agreement on Agriculture, the Philippines was expected to complywith the following:

1) Increase market access and transparency through tariffbinding and tariff reduction and replacing quantitativeimport restrictions with tariffs.

2) Reduce and eliminate trade-distorting export subsidiesand domestic support subsidies.

3) Harmonize sanitary and phytosanitary standards to avoidusing these as discriminatory measures against imports.

All these requirements were supposed to integrate fully for the veryfirst time the Philippine agricultural trade into a global and multilateraltrading system. Except on the issue of agricultural subsidies—with thegovernment hardly providing any to domestic agricultural producers—the Philippines has assiduously complied with the two other terms,particularly on the issue of market access.

Market access commitments involve 1) the removal or conversion into tariffsof all quotas; 2) the introduction of minimum access volumes (MAV), whichallow for the importation of a certain quantity of imports at lower tariff


rates; 3) a ceiling for tariff rates (tariff bindings); and 4) tariff reductions.The Philippines has more than complied with its WTO commitments ontariff bindings and tariff reductions. With EO 288, tariffs on nonsensitiveagricultural products averaged 14.1 [percent] in 1996, and reduced to 4.8[percent] in 2003. Note that the 1996 actual average tariff was lower thanthe 43 [percent] average in 1995 base rate committed to the WTO. Clearly,the actual average tariff reductions from 1996 to 2003 would be muchlower than the average tariff reductions committed to the WTO, whichshould have been higher than actual prevailing tariff levels. (dela Cruz,Paderon, and Bautista 2004, 9)

Though considered sensitive agricultural commodities, pork andpoultry meat, corn, and other feed grains have been subjected to MAVs.Previously, these commodities were protected from imported productsthrough quantitative restriction. However, as Habito (2002) noted,“notwithstanding all this, the Philippines has consistently imported lesspork and poultry meat than what the MAV stipulates, since its ratificationof the WTO agreement.” This means that the threat of imports to thedomestic hog industry has not yet fully materialized. The local swineindustry can be in direr straits than where it is now.

What remains unstated in all the predictions of doom concerning thelocal hog industry are the benefits that accrue from the current liberalizedtrade regime. As mentioned above, corn and other feed grains were alsoplaced under the MAV rule. About 80 percent of the capital input of hograisers goes to corn and other feed grains. Placing these production inputsunder MAV means their steady and relatively cheaper supply (comparedto the locally sourced corn, which has been perennially in low supply) (seetable 3). Increased corn importation, however, will adversely affect localcorn growers.

Thus, unless the government make certain initiatives to increasedomestic corn production and link it directly with the needs of the localhog industry, the players in the local swine industry can always claim to bepummeled by meat imports (legal or smuggled) as they in turn trample onbarely subsisting corn farmers. This will lead to the absurd scenario forarmchair economists: watching which industry will go first to the pits.

Protests and Perceived Threats in the Hog Industry 89Ta

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4.40

1994

204.

4045

19.3

00.

8947

24.5

90.

0460

.12

2937

.55

602.

8790

7.41

13.2

236

.23

216.

60

1995

216.

6041

28.5

220

8.02

4553

.14

0.07

53.8

526

83.5

455

0.74

1075

.45

15.7

343

.11

189.

50

1996

189.

5041

51.3

040

5.44

4746

.24

0.02

54.7

126

98.3

555

3.78

1178

.98

16.8

546

.18

260.

40

1997

260.

4043

32.4

230

7.59

4900

.41

0.02

54.5

228

16.0

757

7.94

1129

.15

15.7

843

.24

322.

70

1998

322.

7038

23.1

846

2.12

4608

.00

0.17

47.0

824

85.0

751

0.01

1094

.97

14.9

741

.01

470.

70

1999

470.

7045

84.5

914

9.46

5204

.75

0.08

52.8

429

79.9

861

1.58

1322

.36

17.6

948

.47

237.

90

2000

237.

9045

11.1

044

6.43

5195

.43

0.25

50.2

129

32.2

260

1.78

1421

.28

18.5

850

.90

189.

70

2001

189.

7045

25.0

117

1.77

4886

.48

0.15

49.7

329

41.2

660

3.64

1114

.31

14.3

039

.18

177.

40

2002

*17

7.40

4319

.26

278.

2447

74.9

00.

3647

.91

2807

.52

576.

1911

09.9

213

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38.2

523

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Globalization and the Civil-Society ActorsGlobalization and the Civil-Society ActorsGlobalization and the Civil-Society ActorsGlobalization and the Civil-Society ActorsGlobalization and the Civil-Society Actorsin the Hog Industryin the Hog Industryin the Hog Industryin the Hog Industryin the Hog Industry

In the 1990s, with the advent of trade liberalization-inducedglobalization and its perceived negative impact on the domestic hogindustry, hog farmers (mostly commercial hog raisers—i.e., with morethan twenty heads of hogs in their farms) and feed millers have proved tobe the most organized and influential stakeholders in the industry. Theyhave learned to flex their muscle as civil-society actors lobbying forprotection of the hog industry.

Setting the Stage for State-Civil Society Relationsin the Context of Globalization

Two factors intersect to serve as the grid for the state-civil societyrelations in the domestic hog industry sector in the context of globalization.The first factor is the willingness of the post-Marcos Philippine state toengage civil-society actors in designing its policies and in implementing itsprograms, thus conferring on its actions a constant veneer of democraticlegitimacy. The second is the presence of strong organizational and businessnetworks in the hog industry and their prior experience in buildingcooperatives even before the restoration of democratic space after Marcos’sauthoritarian rule.

Laws of engagement

The 1987 Constitution, in its declaration of principles and statepolicies, affirmed that the “State shall encourage non-governmental,community-based, or sectoral organizations that promote the welfare ofthe nation.” Article 13 of the constitution contains the role and rights ofpeople’s organization. The framers of that constitution perceived people’sorganizations as being those that enable the people “to pursue and protect,within the democratic framework, their legitimate and collective interestsand aspirations through peaceful and lawful means.” Given that role, section16 of article 13 of the constitution stipulates that “the right of the people


and their organizations to effective and reasonable participation at all levelsof social, political, and economic decision making shall not be abridged.The State shall, by law, facilitate the establishment of adequate consultationmechanisms.” Corollary to this provision is section 14 of article 10 of theconstitution. This section considers nongovernment organizations, togetherwith local government officials and regional heads of departments andother government offices, as key actors in the regional development councilswhich the president shall create. These regional development councils arepart of “administrative decentralization to strengthen the autonomy of theunits therein and to accelerate the economic and social growth anddevelopment of the units in the region.” For Magadia “these manyprovisions in the basic law of the land set a precedent in the Philippineconstitutional history, which for the first time explicitly opened spaces fornongovernment participation in regular politics” (2003, 31).

Echoing the 1987 Constitution’s normative pronouncement on people’sorganizations and NGOs is Republic Act 8435, or the Agriculture andFisheries Modernization Act (AFMA) of 1997, which can be consideredthe key policy of the Philippine government relating to globalization andthe agricultural sector as a whole. As patently stated in its full title: “An ActPrescribing Urgent Related Measures to Modernize the Agriculture andFisheries Sectors of the Country in Order to Enhance Their Profitability,and Prepare Said Sectors for the Challenges of Globalization Through anAdequate, Focused and Rational Delivery of Necessary Support Services,Appropriating Funds Therefor and for Other Purposes” (emphasis added).

On its list of objectives, Section 3 of AFMA specifically mentions therole of civil-society actors in the agricultural sector:

d) To encourage horizontal and vertical integration, consolidation, andexpansion of agriculture and fisheries activities, group functions, and otherservices through the organization of cooperatives, farmers’ and fisherfolk’sassociations, corporations, nucleus estates, and consolidated farms and toenable these entities to benefit from economies of scale, afford them a strongernegotiating position, pursue more focused, efficient, and appropriate researchand development efforts and enable them to hire professional managers;


e) To promote people empowerment by strengthening people’sorganizations, cooperatives, and NGOs and by establishing and improvingmechanisms and resources for their participation in government decisionmaking and implementation;

Regarding civil society, these particular objectives indicate that thestate is cognizant of two things: 1) civil-society actors will play a key rolein the state’s effort to modernize agriculture, and 2) it is the state whichwill set the rules on how this touted partnership will proceed and wherethey will occur in the body politic based on its understanding ofglobalization. It must be noted, however, that globalization, the context ofthis engagement between the government and the civil-society in the fieldof agriculture, was never defined anywhere in the AFMA. If the context ofthe engagement was not defined, then it is expected that the putativeengagement would be marred by contestation and confusion rather thancooperation, more so if the civil-society actors are organizationally preparedto contest the state.

Industry players as civil-society actors

The ability of hog farmers to vigorously respond to challengesconfronting the industry can be traced to the presence of long establishedbusiness associations (e.g., the Philippine Association of Hog Raisers Inc.[PAHRI], the National Federation of Hog Farmers Inc. [NFHFI], and theNational Federation of Hog Raisers [NFHR]) and cooperatives (e.g.,Limcoma Multi-Purpose Cooperative, Iloilo Hog Farmers Multi-PurposeCooperative, Soro-Soro Ibaba Development Cooperative) that providesan organizational structure to the industry.

Civil-society actors in the hog industry have not limited themselves tolobbying members of the legislative and executive branches of thegovernment through formal dialogues, letter-writing campaigns, andattendance in hearings and sectoral consultations. They fully appreciatethe power of the media, thus they have aired their concerns over timethrough press releases. In addition, to prove that they are also willing topour the necessary resources, they even place full-page ads on the nation’s


leading dailies to present their side to the public (see, for example, LimcomaMultipurpose Cooperative’s full-page ad on the November 20, 2002, issueof the Philippine Daily Inquirer).

The emergence of the Agricultural Sector Alliance of the Philippines(ASAP) in 2001, with majority of its members being feed millers’ and hograisers’ associations and cooperatives, civil-society actors in the industryhave shown their ability in coalition building, which would enable themto launch a more confrontational posture against the state. The meat andhog dealers also organized themselves in 2004, and the Meat and HogDealers Association of the Philippines (MHDAP) was formed. MHDAP,together with the Slaughterhouse Operators Association of the Philippines(SOAP), would figure prominently in a meat holiday in March 2004.

Despite acts of alliance building, civil-society actors in the hog industryalso contend among themselves. This must not be viewed, however, aspetty intramurals, all noise, and smoke and mirrors. “Contentious politicsin a fragile democracy can have contradictory results. By its ability tomobilize and empower disadvantaged sectors, it can enhance democraticgovernance by enforcing more transparent and accountable rulingprocedures. On the other hand, by overwhelming political institutionswith oftentimes difficult demands and bypassing institutional frameworksof claim-making and governance, contentious political actions can putunder severe stress the minimum conditions of consensus andaccommodation necessary for democratic contestation” (Rivera 2002, 472).

Grappling with Globalization

Two particular cases highlight the preliminary engagement of the localhog industry players cum civil-society actors with the state on tradeliberalization issues: the enactment of EO 470 in 1991 and the Senateratification of GATT-WTO provisions on MAV.

EO 470

When the Aquino administration enacted tariff reforms in 1990 “toaddress the traditional bias of macroeconomic policies against agriculture


while protecting industry and manufacturing” (Habito 2002), the hogindustry players cum civil-society actors were able to secure favorablemeasures that shielded the industry from foreign competition (table 2).

EO 470 … increased tariff rates on hogs and pork meat, from the previous10 and 20 percent, respectively, to 30 percent for both. Instrumental to thisconcession was the strong lobbying by the hog grower associations in thecountry. These organizations came out with full-page newspaperadvertisements during the deliberations on EO 413 [the original executiveorder where EO 470 was based], warning that the executive order was goingto “sound the death knell” of the domestic hog farming industry. They alsolobbied Congress against the general direction of trade liberalization. Theseand other lobbies prompted the five-year phase-in that was eventuallyprovided in EO 470. (Habito 2002)

MAV rule

At the Senate’s deliberation on the WTO Agreement in 1994, thePhilippine Association of Broiler Integrators (PABI) and the NationalFederation of Hog Farmers (NFHF) discovered that the MAVs committedfor pork and poultry meat, along with sugar, were much higher than whatwould have been intended by the Department of Agriculture. PABI andNFHF argued that the MAV for pork and poultry meat, given the levels ofdomestic production capacity and projected demand, were about twicewhat they should have been. The Philippine government blamed the “error”“on unreliable production statistics available at the time the originalsubmissions were made to the WTO secretariat in 1991” (Habito 2002).

Efforts were made to make “technical corrections” on the quantityof pork, poultry meat, and sugar that should be subjected to MAV.The WTO accepted the correction on sugar but rejected those for porkand poultry meat. “Not a few attributed the difference in these outcomesto the fact that the United States had no commercial interest in, andtherefore did not resist, the correction for sugar. On the other hand,the United States had a close interest in increased access to the Philippinemarket for US pork and poultry products, and thus resisted the technical


corrections being proposed by the Philippine government for theseproducts” (Habito 2002).

When the Department of Agriculture (DA) tried to compensate forthis error by awarding the MAV allocations to local hog and poultryproducers, which in effect gave them the chance to decide how much porkand poultry meat products to import, the US vehemently objected again.In the face of the US protest, the DA wavered in its resolve to provide evena modicum of protection to domestic hog and poultry producers. The DAeventually agreed to award MAV allocations to nonproducers if the localhog and poultry producers were unable to avail themselves of the quota.This is just like saying that if the domestic hog and poultry producers areunwilling to act to its own detriment—i.e., fully utilizing the amount ofimport, which will not be, or just minimally subjected to tariff thus indirect competition with what they produce—then others can do it forthem. “Thus, in this view, it was the US position that ultimately matteredin the outcome of the negotiations” (Habito 2002).

State and Inter-Civil Society Dynamics in the Hog Industry

For the past decade (1995-2005), three interrelated issues havebrought the state and the civil-society actors in the hog industrytogether: zoonotic diseases in the hog industry (FMD in particular),importation (and smuggling) of meat products, and the prices of hogsand pork in the market.

In justifying their objection to meat importation, especially fromcountries that are not FMD-free, hog raisers would repeatedly point to the1995 FMD outbreak in the country. The outbreak was said to have beencaused either by the importation of cattle from Hong Kong (Manila Times,August 5, 1995) or by the 2,000 metric tons of frozen carabeef from India(Flores 1995, 9; Agriscope 1996, 21). The industry suffered around PHP 2billion in losses due to the FMD. The meat processors who rely on thelow-priced imported supply of meat for their profits understandably opposethis stand. They argued that if the domestic producers could meet theirdemand and the locally produced meat is priced competitively vis-à-vis


the imported supply, then they could do away with the imports. The hograisers countered that they could not lower farmgate prices since they werealready selling with a very thin profit margin, if not at a loss. If, however,the government would do something to lower their cost of production,then they could sell the hogs at a lower price. In particular, the hog raiserssuggested, the government should lower its tariff on corn and soybeans,primary components of hog feeds. This stance pits the hog-industry playerswith the civil-society advocates of the corn farmers. Thus, in spite of allthe posturing, a virtual stalemate ensues, which also serves as a very uneasystatus quo.

Foot-and-mouth disease

Foot-and-mouth disease’s deadly rampage started in August 1994. ByDecember of that year an FMD epidemic was already raging in Bulacan.A month later, the disease had reached Mountain Province, Pangasinan,Baguio City, Quezon, Batangas, Laguna, and Ilocos Sur (Philippine DailyInquirer, January 10, 1995). Reports started to surface that some hogsalready infected with FMD were still being butchered and sold in themarket and at a much lower price than FMD-free pork.

If the issue of FMD outbreak was at first treated as something confinedto a particular locale, the news of traffic in FMD-infected pork forced thegovernment to face the issue from the vantage point of the nationaladministration. In January 19, 1995, the National Meat InspectionCommission (NMIC) warned parents not to feed their children with themeat of animals afflicted with FMD, saying that the children were moreliable to catch the disease than the adults were. However, they qualifiedtheir statement by saying that FMD was not fatal to both humans andanimals (Manila Chronicle, August 15, 1995).

Despite this warning from NMIC, only in February 8, 1995, did theDA finally acknowledge the FMD epidemic by issuing AdministrativeOrder (AO) 3, prohibiting and penalizing the shipment of animals andanimal products from regions 1, 2, 3, 4, Metro Manila, and the CordilleraAdministrative Region (CAR).


Instead of acting decisively on the FMD outbreak, the DA, throughJesus Alcantara, senior agriculturist of the Bureau of Animal Industry (BAI),blamed the outbreak on “the failure of the local government officials toimmediately act on the problem” (Alcantara quoted in the Philippine DailyInquirer, January 10, 1995). Add to this the fact that there was only onelocal biotechnological company specializing in FMD vaccines, the RiverdaleBiological Laboratories. Riverdale Biological Laboratories deployed twenty-seven veterinarians in Luzon and Mindanao and conducted its treatmentand control program for free (Manila Chronicle, January 22, 1995; ManilaChronicle, August 15, 1995).

By February 1995, BAI was still waiting for imported FDM vaccines,which were expected to arrive in March or April 1995. This scarcity forcedthe hog growers to buy expensive antibiotics and commercial disinfectants.Some unscrupulous biomedical suppliers even sold them fake FMD vaccine,which was priced at PHP 1,900 a vial (The Philippine Star, February 8,1995).

More than six months after the FMD outbreak, the BAI was still waitingfor the 300,000 doses of imported FMD vaccine and the release of PHP15-16 million allotted by President Fidel Ramos to FMD-afflicted areas.Then-President Ramos issued EO 251 approving the release of aroundPHP 20 million to stop the spread of the disease. However, controllingFMD was not only a matter of resources, but also of vigilant policing ofhog and pork traffic. Victor Atienza, chief of the animal health division ofBAI, blamed the local government units (LGUs) for the continuing spreadof FMD. He said that the LGUs were not enforcing the quarantine on atwenty-four-hour basis (Philippine Daily Inquirer, June 5, 1995).

Then the situation got more desperate. In June 1995 it was reportedthat in Pampanga, due to lax monitoring of the FMD-afflicted animals,the meat of FMD-infected animals has found its way to the longanizamakers and public markets of Pampanga and Bataan. The attempt to cashin on FMD-laced meat was a result of the inability of local governments tobuy FMD vaccines that made the spread of FMD seem uncontrollable. InSan Fernando, Pampanga, for example, 3,000 heads of swine died from


FMD since the local government only had PHP 300,000 for FMD vaccines,an amount good only for around sixty heads of animals (Manila Times,June 29, 1995). With the public paranoid about contracting FMD frompork, the retail price of pork went down by as much as PHP 5 by July1995.

A year after the outbreak of FMD, industry players cum civil-societyactors led by the National Hog Raisers Group Inc. (NHRGI) claimed thatthe annual household consumption of pork in the country had gone downby 75 percent due to fears of FMD. Loretta Galang, NHRGI president,said that this decline in pork consumption translated into a PHP 2 billionloss for the hog industry. Thus, she made an appeal to the public and thegovernment to save the industry. Galang appealed to the public to “take asober look at the FMD situation and save the multibillion-peso industryfrom the peril of being wiped out by unfounded fears” (Galang quoted inThe Philippine Star, August 4, 1995). She issued this appeal in view of theofficial assessment of the departments of health, agriculture, and scienceand technology, saying that FMD was not a public-health hazard since itwas extremely rare for humans to suffer FMD fatally.

She also urged the government to launch a massive informationcampaign aimed at reassuring the public that most of their fears of FMDwere baseless. To compliment this effort, Galang also called on thegovernment to “deploy meat inspection agents in at least the largest marketsin the country to strengthen confidence in the quality of meat productssold in the market” (Galang quoted in The Philippine Star, August 4, 1995).In strengthening the consumers’ confidence in locally sourced pork productsat the height of the FMD outbreak, the industry players had indeed onlythe government to turn to. As Galang explained, “It’s hard for the privatesector to convince consumers that it’s safe to eat pork, because they mighthave the misimpression that we’re only doing it in order to cope up [sic]with huge losses we incurred from the FMD scare” (Galang quoted inAgriscope 1996, 21).

As hog industry players cum civil-society actors pleaded for governmentsupport, they could also not refrain from criticizing the government not


only for its ineptitude but also for corruption. Galang accused LGU officialsof withholding the fund allotted to combat FMD and diverting this fundfor their own personal and political purposes (Manila Times, August 5,1995). She said that the government earmarked PHP 300 million for theimplementation of measures against FMD; however, only the measly sumof PHP 20 million had been released to the industry. Carlito Calimlim,general manager of the United Swine Producers Association, also scoredthe LGUs for failing to deploy veterinarians and meat inspectors who couldhave checked the spread of FMD (Manila Times, August 5, 1995).

By August 1995, BAI admitted that it would take at least three yearsto neutralize FMD. Only after a year did the hog raisers start recoupingtheir losses. By August 1996, the Bureau of Agricultural Statistics reportedthat retail prices of pork, chicken, and a number of basic commoditiescontinued to soar in Metro Manila and key provincial markets. The BASreported that pork is PHP 94-105 per kilo, up from PHP 85-98 by end ofJanuary 1996 (Manila Times, April 27, 1996).

Importation and smuggling of meat products

The issue of meat imports is related to the issue of FMD in the sensethat when FMD was starting to taper off, Galang called on the governmentto bring to an end the importation of carabeef to prevent the recurrence ofFMD outbreak in the country (Agriscope 1996, 21). The same line ofreasoning would be reiterated over the years. In 2004, almost eight yearsafter the FMD epidemic, Albert Lim, president of the National Federationof Hog Farmers Inc. (NFHFI) and the Negros Occidental Hog RaisersAssociation, made a similar demand. He called for a stop to carabeefimportation from India, saying that it would endanger the hog industryand other livestock since India was an FMD-contaminated country withnot a single zone classified as FMD-free by the Office International desEpizooties (Visayan Daily Star, February 21, 2004).

A related line of reasoning employed by the domestic hog-industryplayers doubling as civil-society actors was to treat smuggling and excessiveimportation of meat, specifically carabeef, as related issues that would


ultimately lead to the collapse of the local hog industry on which around4.25 million individuals depended for their livelihood (The Philippine Star,November 17 and November 24, 2002; Manila Times, November 26,2002). In November 1998, the National Federation of Hog Farmers, Inc.(NFHFI), a nonstock, nonprofit umbrella organization of autonomousassociations, with a total individual membership of more than two thousandhog farmers, issued a letter to then-President Joseph Estrada on the use ofcarabeef by fast-food chains. They also informed the president about theimported carabeef flooding the local meat market (Philippine Daily Inquirer,November 12, 1999).

Three years later and under a new administration, Nemesio Co,national chairman of the National Federation of Hog Raisers (NFHR), inan October 2002 letter to then-DA Secretary Edgardo Angara, was stillmaking an appeal to the government to act on the issue. He said thatimportation and smuggling had resulted in lower demand for locallyproduced pork which, in turn, led to record-low levels of farmgate pricesof hogs. In particular, he blamed this situation on dumping of processedmeat and carabeef (The Philippine Star, October 27, 2002). Co said thatthey felt “so helpless, cheated, and violated that imported carabeef, whichis supposed to be for the exclusive use of meat processors, [is] being dumpedin the country in volumes heavens know how large; they have even gone tothe legitimate trade routes of the wet markets, supermarkets, and canteens.Even their packages, which are supposed to be burned, are being sold atjunkshops in violation of the rules on quarantine procedures” (Co quotedin The Philippine Star, November 24, 2002).

To prod the government to act on their behalf, some industry playerseven argued that in not helping them, the government must not also expectany reciprocal gesture from their part. An example of this tact is a statementfrom Albert Lim Jr., NFHFI senior vice chairman. He said, “The downsideof this unwanted scenario is the program of creating one million jobs isbeing tremendously compromised because our business is losing tosmuggling and dumping. So, instead of expanding our operations andhiring more people, we cannot do that anymore. Some people are destined


to lose their jobs if the government cannot check the rampant illegalactivities of some traders” (Lim quoted in The Philippine Star, November24, 2002).

However, no decisive action was seen from the government. Besideswriting to Angara, Co also wrote to Sen. Ramon Magsaysay and Rep.Alfredo Marañon, chairmen of the agriculture committee at the upperand lower houses of Congress, respectively. He appealed for assistance“to create legislation to regulate the excessive entry of meat importationscoming into the Philippines” (Co quoted in Manila Times, November26, 2002).

It was in the midst of these unheeded appeals from the two largestorganizations of hog raisers, i.e., the NFHFI and the NFHR, that theAgricultural Sector Alliance of the Philippines (ASAP) was formed.ASAP was registered with the Securities and Exchange Commission(SEC) on January 6, 2003, with Nicanor Briones of LimcomaMultipurpose Cooperative, the largest agricultural cooperative in thePhilippines, as chairman. In its engagement with the government, ASAPwould employ a more sustained and sometimes confrontational stance.Exactly a month later, it would already be leading a meat blockade inMetro Manila.

In the same week that ASAP registered with SEC, it issued a pressstatement saying that in protest of the government’s failure to stop illegalmeat importation and smuggling, it intended to stop supplying pork tothe metropolis for about a week. A rally with “a parade of pigs alongMendiola Street near Malacañang and throwing of eggs on the road as asign of protest was also planned to coincide with the meat holiday” (Brionesquoted in The Philippine Star, January 10, 2003).

The pork stoppage occurred on February 6-8, 2003, spearheaded byASAP and “supported by the NFHFI–Nemesio Co wing (where AlbertLim is president), some members of the NFHFI–Gabby Uy wing, alsosome members of PAHRI [Philippine Association of Hog Raisers Inc.]and several independent raisers/associations in Bulacan, Tarlac, and Rizal[e.g., Livestock Association of Pandi]” (Locsin 2003).


However, the meat holiday eventually fizzled out without anyimmediate and serious positive response from the government. Then-DASecretary Luis Lorenzo merely countered ASAP’s claim of smuggling bysaying that 125 container vans of smuggled meat and vegetables were confiscatedand some officials of the NMIC and the Bureau of Animal Industry had beenreshuffled. For her part, President Gloria Macapagal Arroyo ordered theBureau of Customs to phase out bonded warehouses; she also called onCongress to declare smuggling a heinous crime punishable by death.

With one of its more combative stances over, ASAP would also evenengage perceived power brokers close to the president to petition theremoval from their post of certain government officials who they deemedto be favoring interests detrimental to the hog industry. An example ofthis case would be their effort to have the president’s husband, Mike Arroyo,help them secure the removal of DA Undersecretary Cesar Drilon. Theythought Drilon heavily favored meat importers and meat processors andthis is because he was on the take (Briones 2004). They also alleged that hewas involved in technical smuggling. Mike Arroyo, however, refused tomeet with the group.

Prices of hogs and pork

In the first quarter of 2004, two major issues animated the civil-societyactors in the hog industry: the increasing importation of carabeef fromIndia, an FMD-contaminated country (aggravated by rampant meatsmuggling), and the high farmgate prices of hogs. The high farmgate priceof hogs, as claimed by the hog raisers, was due to the high cost of production,especially the cost of feeds. The meat and hog dealers said that this highfarmgate price made their enterprise unviable.

As early as January 2004, there were already rumors of a meat holiday.Thus on January 23, 2004, the industry stakeholders meet with PresidentArroyo and managed to come into an agreement “to adopt a voluntaryprice hike moratorium at two levels, the farmgate price at PHP 82 a kiloof live weight and the retail price at PHP 125 a kilo for liempo” (Departmentof Agriculture 2004).


Luis P. Lorenzo Jr., then-DA secretary, considered the moratorium amajor breakthrough as this is the first time that the different groups satdown and thoroughly discussed problems affecting the different levels ofthe pork-supply chain. This would prove, however, to be merely a stop-gap measure.

Things came to a head in March 2004. On March 4, 2004, MHDAPand SOAP called for a three-day meat strike in Metro Manila (InquirerNews Service, March 4, 2004; Today, March 4, 2004). The threat of ameat strike was considered serious enough by Malacañang that it appealedto MHDAP to call off the meat holiday. MHDAP and SOAP still went onwith its meat strike. Though not entirely successful in paralyzing the supplyof pork in the metropolis, they got the government’s attention andcompelled the concerned agencies to act on the problem (The PhilippineStar, March 6, 2004).

On March 9, 2004, to prevent a similar situation in the future, theDA discussed a marketing tie-up with the SOAP and the NFHF. Lorenzosaid the arrangement would enable slaughterhouse operators to purchasedirectly the live weight hogs from the farms. In the current trade setup,dealers directly purchase the live-weight hogs from the farms and bringthem to the abattoirs, which charge PHP 50 for every head. The dealersthen deliver the dressed meat to the market. The MHDAP admitted thateach member of the group earned a daily average of PHP 5,000 from thetransaction (dela Cruz 2004).

To address the issue of high production cost, President Arroyoannounced on March 10, 2004, that she would authorize the duty-freeimportation of 350,000 tons of corn up to the end of 2004 and an unlimitedamount of soybeans for the next six months to ease domestic pork shortage(Philippine Daily Inquirer, March 11, 2004; The Philippine Star, March10, 2004). This seemed to be win-win solution, at least for the hog-industryplayers (to the consternation, of course, of those in the corn industry).What was curious, however, was the declaration of a domestic pork shortageby the president. In so doing, she also allowed a duty-free importation of10,000 tons of pork.


A PHP 1,700 feed subsidy was also given on March 30, 2004, toaround 98,000 backyard hog raisers affected by the high cost of feed. Thesubsidy was given to hog raisers in Batangas, Rizal, Pampanga, Bulacan,Ilocos, Negros Occidental, Negros Oriental, Iloilo, Aklan, Antique, andCapiz (Manila Bulletin, March 30, 2004; Today, March 31, 2004).

As before, this situation pitted one group in the local swine industryagainst the other. MHDAP was up against ASAP and the SOAP (ThePhilippine Star, March 6, 2004). ASAP, the National Federation of HogFarmers Inc. (NFHI), and the National Federation of Hog Farmers of thePhilippines (NFHFP) were feuding with the Philippine Association ofMeat Processors (PAMPI) (Manila Times, April 5, 2004; Philippine DailyInquirer, February 23, 2004; Manila Times, April 23, 2004). ASAP andNFHI accused PAMPI of making false claims that there was a meat shortagein order to justify their demand for an increase in meat imports. For theirpart, the meat processors argued that they were providing cheap proteinsource to Filipino consumers since the imported meat cost less than thelocally sourced ones. ASAP and NFHI alleged that the importation, inparticular, of carabeef from India endangered the local swine industry sinceIndia was not an FMD-free country. They also added that since the localmarket was being flooded with meat imports (legal and smuggled), thehog raisers were also being forced to cut down on production in order tostabilize the farmgate price of hogs. When it undertook that step, it wasaccused in turn by the MHDAP of creating a shortage to jack up the priceof hogs (Philippine Daily Inquirer, March 7, 2004). When the news of“hot meat” started appearing in the news, ASAP in turn accused the pigbuyers of floating this news in order to scare consumers away (ManilaTimes, April 23, 2004). This “disinformation campaign” brought downhogs prices (Today, April 22, 2004).

The government responded to this situation by bringing together in adialogue the different civil-society actors in the local swine industry (ThePhilippine Star, March 6, 2004) and coming up with new tariff measuresaimed at lowering the production cost of hog raising, in particular loweringthe tariff on corn and soybeans, primary components of livestock feeds


(Philippine Daily Inquirer, March 11, 2004; The Philippine Star, March10, 2004). Backyard hog raisers comprising about 77 percent of all hograisers were also given feed discounts (Today, March 31, 2004). Thegovernment also imposed stricter measures in importing meat and livestockto protect the country from animal diseases.

PAMPI resented this measure. The meat processors maintain that itwas uncalled for and would merely make the importation process longer,thus eating up more of their time and resources (BusinessWorld, June 22,2004; Manila Times, April 5, 2004). To appease the meat processors, theBureau of Customs was studying the possibility of lowering the tariff onpork imports (Today, July 8, 2004), which the hog raisers, in turn, wouldsurely oppose (Today, April 20, 2004).


Without the claim of representing a certain constituency that issupposed to be at a disadvantage in the current trade regime, i.e., theestimated four million backyard hog raisers, nothing separates the civil-society actors in the hog industry from profit-fixated interest groups thatlobby the government for advantageous deals. This is not, however, todisparage what civil-society actors from the business sectors can accomplish.As O’Connell points out, “The business sector is another undervaluedpartner in civil society. Many businesses are not renowned for civility andsocial conscience, but those that accept and fulfill social responsibilitycontribute significantly to the quality of community and civil society”(2000, 473).

That the civil-society actors in the local hog industry are market playersthemselves prefigures the issues that will serve as the milieu for state-civilsociety relations in the context of globalization. The state-civil societyengagements in the hog industry have focused on issues that concern theindustry actors’ economic viability. This sentiment is true both for the hograisers (both small-scale and commercial) and for the hog dealers. Thestrongest indicator of this condition is how the issue of prices (farmgateand retail) predominates the state-civil society engagements; both the


necessity to recoup the expenses in raising and dealing hogs, and that profitmust also be realized. Though the pronouncements of civil-society actorsin the hog industry continuously reiterate the crisis they are in, thecontinuously increasing volume of production, domestic consumption,and retail price cast doubt on this claim.

If the articulated condition seems to differ from what is actuallyhappening in the market, this could be largely explained by the situationin which large industry players double as civil-society actors. Large industryplayers are more susceptible to fluctuations in volume and price of tradecommodities. And being large businesses they could easily engage the state,formally or informally, since they could utilize the organizational resourcesof the business organizations that they independently belong to.

Viewed, however, from another perspective, this organizational andfinancial advantage of industry players constituting themselves as civil-society actors exposes the inequality among actors in the hog industry. AsFriedman notes, “Where societies are significantly unequal, civil societywill be a realm of inequality since some will command greater resources toorganise than others, and most citizens will probably find participation incivil society associations beyond their means. A central error of the ‘civilsociety as virtue’ paradigm is to confuse the site of action with those whoact in it, the players with the playing field” (2003, 10).

For its part, the state, notwithstanding it’s avowal of partialitytoward civil-society actors, can only do so much in the currentmultilateral and global trade regimes. Globalization—or its avatar, tradeliberalization—has a dual effect on state-civil society relations.Globalization unleashes new economic problems at the domestic levelthat forces the state and the civil-society actors to engage each other.This engagement, however, hardly results in a mutually acceptablesolution since areas for possible compromise or for calibrated responsehave been pushed to the margins by the very onslaught of globalization.Others, however, take the opposite view. They argue that it is the“traditional political groups…now joined by commercial and civil-society groups in creating push and pull factors that inhibit state action


on a number of policy areas, particularly on economic reform. Theissue of a ‘meat crisis’ in the Philippines in early April 2004 illustrateshow these groups seem to force the government into certain policytracks that may be contradictory to its commitments to economicliberalization” (Kraft 2003, 142). This comment is rather symptomaticof the neoliberal focus on democratic governance that is “less concernedwith issues of sovereignty and power than with creating efficientinstitutional structures to facilitate the operation of the market” (Reid201, 788).

Moreover, this assessment gave too much weight to what commercialinterests qua civil-society actors can accomplish. The telling exampleconcerning the hog industry is not the “pig holiday” but the issue oftechnical correction on MAV. Civil-society actors in the hog industry wereable to prod the government on their behalf to correct the error on theassigned MAV on meat imports. Still, the government’s attempt to secureprotection for the hog industry was effectively shot down by one of itsmost influential trading partners, the US. Then globalization, at least inthis case, can be said to undermine the stability of democratic states if the“stability of democratic regimes is at least partly a function of the degree towhich autonomous associations are allowed to influence the state” (Sillimanand Noble 1998, 306-7).

To fully realize the democratizing potential of civil-society actors inthe hog industry and their indispensable role in crafting socioeconomicpolicies, it is also necessary to have a state that can still decisively respondto civil-society actors and their competing claims. Unfortunately, the state’scapacity to engage the civil-society actors is being undermined by tradeagreements previously entered into by the government, and other governingmechanisms of the globalized trade regime.


Agriscope. 1996. Carabeef import ban sought. Agriscope, April 21.Association of Southeast Asian Nations (ASEAN) Secretariat. 2002. Southeast

Asia: A free trade area. Jakarta: ASEAN Secratariat.


Bello, Walden. 2003. Multilateral punishment: The Philippines in the WTO, 1995-2003. Manila: Stop the New Round Coalition and Focus on the GlobalSouth.

Briones, Nicanor. 2004. Interview by Joel F. Ariate Jr. Tape recording.November 3.

Costales, Achilles C., and Christopher L. Delgado. 2002. Synthesis of changesimpacting on participation of smallholders in the growing meat market inthe Philippines. In Delgado and Narrod 2002, Annex 3. http://www.fao.org/WAIRDOCS/LEAD/X6115E/X6115E00.HTM.

dela Cruz, Joseph Leland, Marissa Paderon, and Germelino Bautista. 2004. Tradeliberalization and agricultural policy in the Philippines. In Trade liberalization,agriculture and small farm households in the Philippines: Proactive responses tothe threats and opportunities of globalization, 6-13. Silang, Cavite: InternationalInstitute of Rural Reconstruction.

dela Cruz, Roderick T. 2004. DA to reduce influence of local meat dealers. March9. http://www.globalpinoy.com/news/business/03092004/busi4.htm.

Delgado, Christopher L., and Clare A. Narrod. 2002. Impact of changingmarket forces and policies on structural change in the livestock industriesof selected fast-growing developing countries. Final research report ofPhase I - Project on livestock industrialization, trade and social-health-environment impacts in developing countries. International Food PolicyResearch Institute and Food and Agricultural Organization of the UnitedNations. http://www.fao.org/WAIRDOCS/LEAD/X6115E/X6115E00.HTM.

Department of Agriculture. 2004. Hog raisers, meat vendors agree to voluntaryprice moratorium. http://www.da.gov.ph/news2004/jan/jan23a.html.

Flores, R.E. 1995. Unang payo ni Mang Pandoy: Lutasin ang problema ng livestockindustry! Filipino Magazin, August 28, 9-10.

Friedman, Steven. 2003. The state, civil society and social policy: Setting a researchagenda. Politikon 30 (1): 3-25.

Habito, Cielito F. 2002. Impact of international market forces, trade policies,and sectoral liberalization policies on the Philippines hogs and poultry sector.In Delgado and Narrod 2002, Annex 4. http://www.fao.org/WAIRDOCS/LEAD/X6115E/X6115E00.HTM.

Kraft, Herman Joseph S. 2003. The Philippines: The weak state and the globalwar on terror. Kasarinlan: Philippine Journal of Third World Studies 18 (1-2):133-52.


Livestock Development Council. 2002. Industry situation: hogs. www.ldc.gov.ph/hogsit3.html.

Locsin, Ignacio G. 2003. Letter to the editor. Philippine Star, March 27, 17.Magadia, Jose. 2003. State-society dynamics: Policy making in a restored democracy.

Quezon City: Ateneo de Manila University Press.Mendoza, Maria. 2003. Women in the livestock and poultry industry. Farm News

and Views (1st quarter). www.ppi.org.ph/publications/fnv/current_issues/livestock_industry.htm.

Obanil, Rovik Santiago. 2004. The dilemma of tariff-free corn imports. FarmNews and Views (2nd quarter). http://www.ppi.org.ph/publications/fnv/current_issues/fnv_3.htm.

O’Connell, Brian. 2000. Civil society: definitions and descriptions. Nonprofitand Voluntary Sector Quarterly 29 (3): 471-478.

Reid, Ben. 2001. The Philippine democratic uprising and the contradictions ofneoliberalism: EDSAII. Third World Quarterly 22 (5): 777–93.

Rivera, Temario C. 2002. Transition pathways and democratic consolidation inpost-Marcos Philippines. Contemporary Southeast Asia 24 (3): 466-83.

Silliman, G. Sidney, and Lela Garner Noble. 1998. Citizen movements andPhilippine democracy. In Organizing for democracy: NGOs, civil society, andthe Philippine state, ed. G. Sidney Silliman and Lela Garner Noble, 280-312.Quezon City: Ateneo de Manila University Press.

Swine Information Network. 2003. Industry status. http://www.pcarrd.dost.gov.ph/cin/SWIN/default.htm.

United States (US)-ASEAN Business Council. 2005. The ASEAN free trade areaand other areas of ASEAN economic cooperation. http://www.us-asean.org/afta.asp (accessed June 20, 2005).

Yabut-Bernardino, Natividad. 2002. The impact of agricultural trade liberalizationin the Philippines. International South Group Network (ISGN). http://www.isgnweb.org/pub/02-002.htm.

Confronting the Challenges in the Garment Industry 111

Confronting the ChallengesConfronting the ChallengesConfronting the ChallengesConfronting the ChallengesConfronting the Challengesin the Garment Industryin the Garment Industryin the Garment Industryin the Garment Industryin the Garment Industry

Ma. Glenda S. Lopez Wui

As an economic phenomenon, globalization is often defined as the“radical transformation of the economic environment at the local,regional and global levels through the promotion of an open

international economy characterized by an overwhelming increase intrade, investment and financial flows” (Frago, Quinsaat, and Viajar2004). As the globalized arrangement is characterized by an increasingreduction of barriers in trade and investment, governments indeveloping countries take advantage of this by creating a domesticenvironment favorable to foreign investments while encouraging localindustries to become more export oriented to take advantage of theopening of markets abroad. However, critics point out that such setupis not at all conducive to long-term development. Foreign investorscan easily fly out of the host country when the latter ceases to providethem the optimum environment for capital accumulation. Moreover,emphasis on export would give less attention to the development of adomestic market for local products. Although the emphasis on exportcould create more employment for the local workforce because of biggermarkets abroad, problems nonetheless arise if importing countries beginto tap other sources offering better-quality and -priced goods. Thisproblem is what the local garment industry is currently facing with theemergence of countries (especially China) that produce garments more

111


efficiently. Likewise, the possibility of losing more markets is beingfeared with the impending expiration of the Multi-Fiber Arrangement(MFA) and the ascension of the garment trade to the rules of the WorldTrade Organization (WTO).

The garment industry experienced growth in the past three decadesbecause of the MFA as its quota system gave garment manufacturers inthe country assured markets for their products abroad. Through theMFA, garments became a major dollar earner for the country. In January2005, however, the agreement expired and the trade in garments willsubsequently be governed by the rules of the WTO. Under the WTO,Filipino manufacturers will have to compete with other producers fromall over the world for markets. Given the high cost of producinggarments in the country, many are not very optimistic about the abilityof the industry to survive the competition. It is said that more thanhalf of the roughly 320,000 workers (Garment and Textile Export Board)employed by the garment industry will be adversely affected by theexpiration of the MFA. Of the total number of garment workers, around75 percent are women.

The problem faced by the industry is compounded by the fact that itdoes not have a strong domestic market to speak of. During the 1980s, thedomestic market consumed at least one-third of the country’s total garmentsproduction.1 However, this share eventually dwindled over the years becauseof imported products entering the country both through legal and illegalmeans. Analysts point to government’s drastic reduction of tariffs and itsinability to curb smuggling as reasons why foreign products dominate thelocal market at the expense of our producers. Tariff rates for garmentproducts coming from Association of South East Asian (ASEAN) countriesare placed at 5 percent, while those from outside ASEAN are placed at 15percent (Dela Cuesta 2005). Considering the high cost of producinggarments in the country, local producers cannot compete with the importedproducts given these tariff rates.2

As to the problem of smuggling, one study conducted in 2000concluded that almost half of the volume of imported textiles and garments


enter the country illegally.3 Another problem threatening the garmentindustry is the prevalence of ukay-ukay or the trade in secondhand clothing.These secondhand clothes are from Western consumers who want to getrid of unwanted clothes via donations to charitable institutions indeveloping countries. However, only a small portion of the goods end upin charitable institutions or used in relief operations; the “lion’s share issold to used clothes dealers and exported to developing countries, where itis sold off at market prices” (International Textile, Garment and LeatherWorkers’ Fedearation).

This case study aims to examine how civil-society groups engage thestate to advance the interest of the local garment industry and its workersin the context of globalization. Specifically, the paper will examine initiativesof civil-society organizations that were put up in connection with theexpiration of the MFA and current problems besetting the garment industry.The paper also attempts to analyze the resources and means of interventionutilized by the civil-society groups in their interaction as well as assesstheir success not only in affecting policy change but in shaping the discoursefor their agenda. The factors that shaped the outcome of the interactionwill also be examined by the paper.

The first part of the paper provides a situationer on the garmentindustry. The second part discusses the perceived effects of globalizationon the industry, while the last part analyzes state-civil society interactionon issues concerning the industry. For a more empirically grounded analysis,the study made use of available data and information on the subject fromprevious studies, documents, and statistical data on the industry, as well asInternet sources. Interviews with key informants from civil-society groups(mostly trade unions) and government were also conducted.

Garment Industry SituationerGarment Industry SituationerGarment Industry SituationerGarment Industry SituationerGarment Industry Situationer

The International Context

The growth of the garment industry in the Philippines can beunderstood against the backdrop of what is happening at the global level,in particular, the internationalization of the division of labor.


In the global production of garments and textiles, it is noted that“change is taking place in the location of world production of textile andclothing” (Field cited in Pineda-Ofreneo 1989, 7). An increasing quantityof textiles and garments are manufactured in the Third World “with therelocation of labor-intensive operations to areas where manpower is cheap,abundant and preferably docile.”

Pineda-Ofreneo (1989) noted that this global restructuring has twoimplications: the exploitation of cheap labor in less developed countriesfor the manufacture of clothing exports to the advanced capitalistnations, “which extract the most profits from the undertaking,” andthe “increasing pressure in the industrial countries to limit importsespecially those coming from third world producers in order to protectdomestic industry and employment” (Field cited in Pineda-Ofreneo1989, 7).

In the late 1970s when there was a boom in textile and garmentsproduction in developing countries, textile and clothing industries in theUS and Western Europe suffered job losses. The jobs in these countrieswent to developing countries like the Philippines where the major pushfor export and employment was dictated by outside economies. This canbe explained by the logic of the global market economy:

In the system of internationalization of production dominated by thetransnational corporations based in the United States, Japan and WesternEurope, the role of the developing economies is to be “1) the geographicalsite of labor-intensive manufacturing for worldwide markets, 2) the supplierof low-priced consumer products, and 3) the source of cheap labor.”

Three main factors have made this possible: 1) the virtually inexhaustibleworldwide reservoir of potential labor found mostly in Asia, Africa, andLatin America, where workers earn wages roughly 10-20 percent only ofthose of their counterparts in the advanced industrial states; 2) thedevelopment of modern transport and communication technology whichmakes possible the relocation and control of operations over widegeographical distances; and 3) “job fragmentation” or the breaking down ofcomplex operations into simple units so that even unskilled workers canperform them (Frobel et al., as quoted in Pineda-Ofreneo 1989, 8).


Transnational companies (TNCs) are the facilitators of theglobalization of production or the internationalization of the divisionof labor. TNCs are said to have put in 80 percent of foreign directinvestment and employ around 27 million workers in several exportprocessing zones (EPZs) in developing countries (Gills 2002, 111).Since the 1970s, governments in Asia have been competing for thefavors of transnational capital. As a result, there has been an increase inEPZs and free-trade zones in which “social and environmental standardsare lowered while social subsidies to capital are increased, for examplethrough offering financial and other investment incentives by the hostgovernments. The general historical outcome of this process has beenan increase in the rate of exploitation of labor” (Gills 2002, 110).Since women make up 70 percent of workers in EPZs in Asia (as wellas in the Philippines), they are therefore mostly the victims ofexploitation.

Although the intensification of the export manufacturing sectorgenerates much-needed jobs in developing countries, it also involvesintense competition to attract foreign investments. This in turn resultsin the tendency toward “increase in the level of labor exploitation, vialower wages and longer working hours, with very little job security.”Moreover, because of the facility of its transfer, capital tends to moveaway in countries with improved working conditions to less developedeconomies. This in turn “creates a tendency toward increase in adownward pressure on wages, as expressed in the race-to-the-bottomsyndrome” (Gills 2002, 112). Gills summarizes the effects ofglobalization of production on Asian women:

In global factories, the capital-labor relations for Asian women arebecoming more exploitative and oppressive in the process of globalizationof production. The flip side of the race to the bottom is the corporations’incessant search for ever-cheaper labor. As a consequence of these twoprocesses, the labor conditions of many women in contemporary Asiaare coming to resemble those of an earlier era of industrialization in theWest, characterized by sweatshops, that is, high levels of exploitation.


Development of the Local Garment Industry

The garment industry in the Philippines “started as a basically sub-contracting re-exporting industry where raw materials are shipped fromabroad for processing (cutting, embroidery, sewing etc.) and then re-exported. Part of the production process goes into the factory but the bulkis sub-contracted to cottage-type producers” (Philippine Trade andDevelopment cited in Pineda-Ofreneo 1989, 1).

The export-oriented embroidery manufacturing was introduced in thePhilippines in the late nineteenth century. By the early twentieth centuryduring the US colonial rule, women and children laborers from thetraditional garment-producing areas of Rizal, Bulacan, Cavite, and Batangaswere already producing embroidered garments. “By 1919, embroidery hadgrown to be one of the most successful industries promoted by theAmericans in the Philippines, and by 1930, embroidered articles has becomeone of the country’s top ten exports” (Pineda-Ofreneo 1989, 1).

Before the 1960s and the popularization of RTW or ready-to-wearclothes, garments were largely produced for the domestic market and donemainly by household-based tailors and dressmakers (Ofreneo et al., 1996).But in the 1970s, the garment industry started to venture into large-scaleexport. It was during this period when the industry began to experienceunprecedented growth. From 1972 to 1980, the export of garments fromthe Philippines grew an average of 30 percent per year. This prompted theWorld Bank (WB) to hail the garment industry in its 1979 World MissionReport as “the most dynamic industry in the Philippines.” The WB likewiseregarded garments as “the cornerstone of the remarkable growth in non-traditional exports witnessed through the 1970s” (cited in Ofreneo et al.1996, 39).

In the early 1980s, however, the industry experienced a slump due tothe political uncertainties. Because local garments manufacturers are highlydependent on imported fabrics, the foreign-exchange crunch reducedproduction by an average of 12.2 percent from 1981 to 1985. About 95percent of our garment industry’s fabric and textile requirements areimported because the price of local textiles is relatively higher than the


prevailing world price (Austria 1994, 10).4 The second half of the 1980s,however, saw the recovery of the garment industry (Cororaton 1997, 8).Since then, the industry consistently posted growth, becoming the country’ssecond-top dollar earner next to electronics.

To compete in the international market, the government enacted severallaws for the industry.5 With the incentives provided by government forgarment manufacturers and the relatively low labor cost, foreign companies(especially those from the US) were encouraged to set up business in thecountry. By the late 1960s and early 1970s, a number of foreign-ownedgarment corporations had set up operations in the Philippines. But whilethe garment industry was able to participate in the international trade, itwas still unable to take advantage of the growing market opportunitiesunlike the other major exporters like Hong Kong, Taiwan, and South Korea.With this lost opportunity of becoming a major garments exporter, thePhilippines had to contend with a more protectionist environment enforcedby the United States (the country’s major export market) and the Europeancommunities (Austria 1994, 12-13), as exemplified in the MFA.

From 1974 to December 2004, the MFA governed the Philippinegarments exportation. Under the MFA, importing countries set quotas onthe entry of textiles and garments into their countries. Generally, the termsand conditions regarding the application of quotas are embodied in aBilateral Textile Agreement between importing and exporting countries.Although quotas are set for our garment exports, it was under the Agreementthat we were assured of markets for our products. Hence, it was during theMFA years that our garment industry experienced growth and expansion(Hutchison 2001). However, with the abolition of the MFA and theascension of the garments trade to WTO rules, the Philippines is up againstcountries offering lower costs and faster deliveries of products to buyers(Austria 1994, 10).6

The Garment Industry in the Era of GlobalizationThe Garment Industry in the Era of GlobalizationThe Garment Industry in the Era of GlobalizationThe Garment Industry in the Era of GlobalizationThe Garment Industry in the Era of Globalization

This section discusses the opinions of key informants on the effects ofglobalization on the garment industry. Globalization here refers to the


period starting when the industry underwent accelerated trade, particularlyevident during the MFA years. The responses are categorized undereconomic, political, and social dimensions.7

Economic and Political Dimensions

According to the respondents from civil-society groups, one of themain problems facing the industry is the government’s unbridled supportfor trade liberalization (Velez 2005; Mendoza 2005; Arellano 2004; Caños2004; Aniesgado 2004; Honculada 2004). In particular, they criticizedthe government’s policy of readily lowering the tariffs for imports withoutregard for its effects on the local industry. The proponents of tradeliberalization believe that hastening the reduction of tariffs and allowingimported products easy access to our market will force our industries tocompete and be more efficient. However, this did not happen to the garmentindustry at all.

Some respondents emphasized that instead of prioritizing tradeliberalization, government should first focus on developing our localindustries (Arellano 2004; Honculada 2004; Mendoza 2005). Governmentshould realize that without adequate support, our local industries cannotdevelop, much less compete with imported products. As the Fair TradeAlliance (FTA) put it, “our industrial and agricultural producers are askedto be globally competitive, price- and quality-wise, even if they suffer serioushandicaps—poor and expensive infrastructures, inaccessible formal credit,high cost of power and utilities, unfriendly bureaucracy, unstable currency,and a generally difficult economic environment” (Fair Trade Alliance 2003,16).

With tariff reduction, our domestic market has been flooded withimported products, which are usually sold at lower prices. Because ofhigh production costs, local manufacturers simply cannot lower theirselling price to match that of imported goods. Although the presenceof cheap imported products may benefit the consumers in the shortterm, this will not be good for the economy in the long term. Companiesare forced to close shop because of decline in sales and losses, thereby


resulting in the retrenchment of workers. With this, a greater portionof the population are left with no purchasing power. Aside from productslegitimately entering the country, our local garments face stiffcompetition from garments smuggled into the country (Honculada2004; Adviento 2004; Arellano 2004). The inability of government toput a stop to smuggling further compounds the problems of the garmentindustry.

One analyst gave the following reasons why our market is flooded withcheap imports: “the trade liberalization commitments of the Philippinesto the IMF (International Monetary Fund), WTO, and AFTA (ASEANFree Trade Area); the inability of the customs and police to apprehend big-time smugglers; and the failure of the government, mainly the TariffCommission, to stop foreign dumping of their excess products” (Ofreneo2003, 42). Government’s inability to act on the problems encountered bythe garment industry has resulted in factory closures and relocation tocheaper sites in Asia and the Carribean, or downsizing the Philippineoperations since the late 1990s (Ofreneo 2003, 42).8

Social Dimension

In examining the social effects of globalization, it can be seen that thephenomenon has been both beneficial and detrimental to the garmentindustry. The discussion in this section mainly focuses on the labor issuesand possibilities for civil-society networking afforded by the globalizedenvironment.

Labor problems

Although some of the problems encountered by the workers were thereeven before the so-called era of globalization, the respondents perceivethat these have currently intensified (Castro 2004; Caños 2004; Aniesgado2004). Most garment workers receive wages way below the required livingstandard even as they work for long hours to meet quota requirements.Contractualization has also become rampant (National Commission onthe Role of Filipino Women 2003). Some of the respondents from the


labor groups believe that corporations resort to contractualization to skirtlaws on security of tenure and workers’ benefits (Caños 2004; Aniesgado2004).9 Companies have also engaged in labor flexibilization, “which entailsthe unbridled use of labor subcontracting and hiring of casual, part-time,temporary and contract workers” (Viajar 1997, 156). While Ofreneo (2003)wrote that flexibilization “comes in the form of multi-skilling, allowingcompanies to maximize the utilization of talents of these workers throughmulti-skilling and related HRM (human resource management) programs.The complaint of unions and many workers is that such multi-skillingexercise leads to work intensification without any corresponding increasesin compensation” (47).

The prevalence of subcontracting in the garment industry has alsoled to the increase in the number of subcontracted workers.10 In thePhilippines, a substantial number of subcontracted workers do theirwork at home. The latter are also known as homeworkers. In the garmentindustry, women make up most of the workers in the informal sector.As informal workers, they work without secure contracts, workerbenefits, or social security/protection (Lund and Nicholson 2003, 15).Social security covers the core contingencies of health care, incapacityfor work due to illness, disability through work, unemployment,maternity, child maintenance, invalidity, old age, and death of abreadwinner (Lund and Nicholson 2003, 17).

According to Teresa Soriano, director of the Department of Labor andEmployment-Institute of Labor Studies (DOLE-ILS), because of the desireof company owners to save on costs in order to face up to the intenseglobal competition, they are wont to save on labor cost so that they couldinvest in other elements of production. Soriano (2004) elaborated:

As competition becomes more heated because of globalization, companies mustapply cost-cutting measures in order to survive. Of the four elements ofproduction (materials, machines, manpower, and time) it is always manpowerand time to produce (which is also related to manpower), which has to besacrificed since the cost of materials and machines are production inputs whichare non-negotiable.


Table 1. Cases of occupational injuries in textile and garment

establishments employing 20 and over, 2002

Manufactureof textiles 1,923 879 3 876 31 845 1,044

Manufactureof wearingapparel 2,757 960 2 958 0 958 1,797

Source: Department of Labor and Employment–Bureau of Labor and Employment Statistics.

Expenses for occupational safety and health are also often sacrificed infavor of other production expenses (Adviento 2004). Costs for the protectionof employees are considered as additional expense and not investment.However, it is ironic that employers do not realize that a safe and healthyworking environment can contribute to productivity as “accidents, diseases,or death in the workplace can be very costly and can cause seriousrepercussions on the overall performance of the company” (Soriano 2004).The latest data from the Department of Labor and Employment-Bureauof Labor and Employment Statistics (DOLE-BLES) show the extent inwhich occupational safety is sacrificed by some employers (table 1). Theactual figure for occupational injuries and fatality could be more than thefigures shown below because of underreporting.

With regard to the wages of the workers, one respondent said thatemployers often cite intense global competition as the reason why companiescannot comply with the rates mandated by labor laws (Casaña 2004).Other respondents added that employers often tell their workers that theyshould not complain because workers in China, for example, receive a lowerminimum wage than they do. However, the respondents pointed out thatthe Philippines should not be compared with China. Even though Chinese

Totalnumber ofcases (fatal,nonfatal,

and withoutlost workdays)

Total(without

lostworkdays)

With lost workdays

Temporaryincapacity

Permanentincapacity

Nonfatal

Total(nonfatal)

Fatal

Total(fataland

nonfatal)


workers receive lower minimum wage than the Filipinos, the social welfareincentives provided by their government (e.g., health care, children’seducation) more than make up for the wage difference (Caños 2004;Aniesgado 2004).

Garment workers also face job insecurity due to possibility of moreclosures of factories and capital and investment flight with the expirationof the MFA, and the inability of companies to survive stiff globalcompetition.11 Moreover, the use of computer-aided technologies such asin embroidery contribute to job insecurity as some companies have begunto retrench workers whose input can be replaced by machines (NCRFW2003).12

The respondents also bewailed the discrimination experienced by womenin the garment industry (Caños 2004; Aniesgado 2004). According to astudy conducted by United States Agency for International Development(USAID), Solidarity Center, and Trade Union Congress of the Philippines(TUCP) Anti-Sweatshop Project (2002), women experience the followingforms of discrimination in some export processing zones: preference forsingle over married women, pregnant women having miscarriages becausethey are not moved to assignments appropriate to their condition, notbeing allowed to go back to work after giving birth, and sexual harassment.

International solidarity campaigns

One positive factor singled out by the respondents is thatglobalization has enabled them to network with other organizationsbased abroad (Castro 2004; Adviento 2004; Casaña 2004). Theirnetworking with other international organizations helped them to learnfrom the campaigns taken by other groups abroad and eventually applythese to the local situation. These campaigns usually center on thesocial responsibility of the corporations, particularly their responsibilitiestoward their workers. An example of these campaigns is the CleanClothes Campaign.13

Local chapters of international organizations have also been put up inthe Philippines. With this, workers in the garment industry have been


benefiting from the advice and expertise of the international organizationson how to conduct their advocacies. For example, the International Textile,Garment and Leather Workers’ Federation (ITGLWF) has a local chapterin the Philippines.14

Moreover, because of international networking, trade unions in thecountry can report to multinational companies violations committed bylocal contractors for possible sanctions. A multinational company usuallyhas a corporate code of conduct, a written statement of principles, laborpractices, a corporate environment, which the MNC has adopted in itsoutsourcing operations overseas. “The MNC commits that its contractors,sub-contractors and suppliers will comply with the MNC code on pain ofreduction or withdrawal of orders” (USAID, Solidarity Center, and TUCPAnti-Sweatshop Project 2002, 30).15

Civil-society groups are not the only ones making use of thecampaigns; government has likewise made use of these to instill socialresponsibility among local manufacturers. For instance, the Garmentand Textile Export Board (GTEB) provided incentives to garmentcompanies that were able to secure certification from the WorldwideResponsible Apparel Production (WRAP) and the Social AccountabilityInternational (SAI). Such incentives usually take the form of allocatingquota for export. WRAP and SAI issue certifications of compliance tocompanies that follow international workplace norms as set out in theInternational Labor Organization (ILO) convention and the UnitedNations Universal Declaration of Human Rights and the Conventionon the Rights of the Child (Worldwide Responsible Apparel Production;Social Accountability International).

Agreements forged through the efforts of international institutionshave also been very useful in setting the directions of the country’s lawswith regard to the protection of workers. Employers are obliged by thecountry’s labor laws, in accordance with international labor standards toprotect their workers and provide them with healthy working conditions.The industry and the government are also “obliged to observe internationallabor conventions such as those mandated by the International Labor


Organization (ILO) and WTO.” Violations of the principles stipulated inILO labor conventions could mean for the Philippines “being shut out ofits biggest export markets where trade unions are influential.” In addition,foreign governments or corporations “could impose sanctions if theydiscover that the exported products are the result of infractions ofinternational labor standards” (Manila Times, July 12, 2003).

Examining State-Civil Society RelationsExamining State-Civil Society RelationsExamining State-Civil Society RelationsExamining State-Civil Society RelationsExamining State-Civil Society Relations

Several theories have been formulated as to the role of the state in thecontext of globalization. There are those which espouse that the state hasbecome irrelevant as global institutions are the ones setting directions onhow a state manages its boundaries. However, there are those which saythat the state is more relevant than ever, especially in the context of theperceived bias of international institutions and rules to favor the morepowerful and richer countries at the expense of the poorer ones. The roleof states (especially the developing ones) is more relevant than ever toenable them to assert their interests in the international arena.

The paper adopts the framework that the state is still very relevant inthe context of globalization. The relevance of the state is also emphasizedby the fact that civil-society groups direct their campaigns to the former infinding solutions to the problems they encounter in the present context. Itis worth noting that in civil-society campaigns to combat the ill effects ofglobalization, workers and capitalists have joined forces in urginggovernment to undertake appropriate actions to ensure the survival of thegarment industry. On some issues, however, workers and capitalists stillremain at odds. Issues pertaining to the workers’ welfare have remainedthe bone of contention between the two parties.

Labor groups’ engagement of the state is not new. Labor groups becameparticularly involved in several antigovernment mobilizations during theMarcos regime; well-known among these mobilizations is the welgang bayan(people’s strike). After President Corazon Aquino’s ascension to power, oneof her first acts was to institutionalize labor relations in recognition of thelabor movement’s contribution to the downfall of the dictatorship. During


Aquino’s first months in office, in May 1986 and again in May 1987,government sponsored the National Tripartite Conference that gatheredrepresentatives from major labor organizations, the management sector,and government experts (Magadia 2003, 67-68). By the time Aquino leftthe presidency, several tripartite representations have been instituted, forexample, in the National Labor Relations Commission, the National Wagesand Productivity Commission, the Overseas Workers WelfareAdministration, and the Regional Wage and Productivity Boards (Magadia2003, 82). It is mainly through these agencies that labor groups formallyengage the executive branch. Labor groups also engaged the judiciarythrough the filing of cases against employers. With the party-list system,their engagement in the legislative arena is realized through their party-listrepresentatives. Along with their utilization of the formal venues are theinformal engagements that they launch from time to time (usually throughrallies and pickets) to get their grievances across government.

Recently, various labor groups came together to complete the prioritylabor agenda for the first one hundred days of President Gloria MacapagalArroyo. The consultation among the labor groups produced the 2004document “Towards a Joint Policy Agenda for Labor: Managing the SocialImpact of Globalization through Stronger State Adherence to Decent Work.”The document has been presented to various policymakers as well asmembers of the labor movement. The policy proposals mentioned in thedocument are meant to address the various problems and disadvantagesencountered by workers in the context of globalization.

The paper focuses on initiatives conducted starting in 2003 up to 2004to address the implication of the impending expiration of the MFA andother problems besetting the garment industry. These are the: 1) “LaborForum Beyond MFA Phaseout” alliance; 2) Bukluran ng ManggagawangPilipino (Solidarity of Filipino Workers [BMP])-Alyansa ng Manggagawasa Garment at Textile (Alliance of Garment and Textile Workers [Almagate])dialogue with the Garment and Textile Export Board; 3) Garments, Textile,and Allied Industries Labor Council (GARTEX Labor Council) spearheadedby the Fair Trade Alliance; and 4) National Commission on the Role of


Filipino Women (NCRFW) consultations on safety nets for women garmentand textile workers. The first three were initiated by civil-society groups,while the last one was initiated by a government agency but with activeparticipation from civil-society groups. The civil-society initiatives werealso chosen because of their members’ formal engagement of government.

Labor groups identified with the national democratic movement orthe Marxist-Leninist-Maoist strain of the Philippine Left are conspicuouslyabsent in the campaigns. These groups’ formal engagement of governmentis currently limited to the legislature through their allied party-listrepresentatives from Bayan Muna (People First), Anakpawis (ToilingMasses), and Gabriela Women’s Party. They also mostly utilize informalmeans of engagement in the forms of “picket-protests and email barrage toconcerned government agencies and institutions.” Because of ideologicaldifferences, these groups are not comfortable working with those groupsearlier identified. Hence, to deal with the problems of garment and textileworkers, they have formed the alliance Solidarity of Labor for Rights andWelfare or SOLAR, and the Kababaihan Laban sa Kontraktwalisasyon(Women Against Contractualization) with like-minded organizations.16

The earlier part of this section discusses the agenda of the campaigns,while the latter part examines the civil-society groups’ engagement of thestate. The respondents interviewed for the study were all part of either oneof the campaigns. One can see that the issues being addressed by thecampaigns were related to the perceived problems of the industry as aresult of globalization.

The information provided in this section was mostly culled fromposition papers prepared by the four groups whose campaigns are the subjectmatter of the paper. One will see that although the issues discussed wereprovided by those from the garment industry, some of these are alsoapplicable to other industries.

Market access and trade facilitation

One important concern in the agenda of the civil-society campaigns isreforming the Bureau of Customs. Because of corruption in the bureau,


smuggled garments easily enter the country. In addition, manufacturersfind it hard to get imported raw materials out of customs because ofunscrupulous officials who ask for bribes to facilitate the release of thematerials. This causes delay in the manufacturing of the garment products—a situation detrimental to the manufacturers. Importers are very strict aboutdeadlines, such that local manufacturers can face sanctions if they fail todeliver on time. So as to facilitate the immediate release of raw materials,manufacturers are forced to give bribes to customs officials. Among otherthings, the computerization of the transactions in the bureau has beenproposed to avoid personal transactions, which could deter the incidencesof corruption and bribery.

Moreover, civil-society organizations urge government to utilize theantidumping measures sanctioned by the WTO. According to WTO,dumping occurs when “a company exports a product at a price lower thanthe price it normally charges in its own home market.” The WTO agreement“allows governments to act against dumping where there is genuine(‘material’) injury to the competing domestic industry. In order to do thisthe government has to be able to show that dumping is taking place,calculate the extent of dumping (how much lower the export price iscompared to the exporter’s home market price), and show that the dumpingis causing injury or threatening to do so” (World Trade Organization).Besides the WTO mechanism, the Tariff Commission should alsoimplement RA 8752 or the Anti-Dumping Duty Act to address thedumping of foreign products into the country. Government should also beable to act on the prevalence of ukay-ukay or the sale of secondhand clothingin the country.17

To sustain the local garment industry, civil-society groups have beenurging government to embark on a campaign to urge consumers to buyFilipino products. Compared with other developed and industrializingeconomies (such as Brazil, Malaysia, and China) where governments havebeen “waving their national flags, asking their domestic consumers tosupport their domestic producers” (Fair Trade Alliance 2003, 10) to survivein the globalized setup, such a campaign is not assiduously pursued in our


country. The Garment and Textile Labor Council of the Philippines(GARTEX) also reiterated that it is important for the industry’s survival todevelop a local market base (Dela Cruz 2004). All the respondents alsobelieve that instilling a sense of nationalism among our consumers by urgingthem to patronize our local products can go a long way in saving ourdomestic industry.

The development of the textile industry is another concern of civil-society groups. The ability of local garment producers to compete in theworld market is largely hampered by the lack of a textile industry thatwould be the source of raw materials for the garment products. Because ofthis, about 95 percent of the materials needed for manufacturing garmentsare imported. Government should therefore put in more resources forresearch and the development of textiles in the Philippines.

Employment

The government needs to make a full accounting and registration ofcontractors and subcontractors in the garment industry. In general,subcontracting, which has become prevalent in the Philippines, is definedas “an industrial or commercial practice whereby the party placing thecontract (parent firm, principal enterprise or company) requests anotherenterprise or establishment (subcontractor) to manufacture or process partsof the whole of a product or products that it sells as its own” (InternationalLabor Office, as cited in Pineda-Ofreneo 1989, 9).18 With the registration,the workers employed by the contractors and subcontractors will be fullyaccounted for and the employers might be monitored on whether theygive the lawful wages and benefits to the workers.

Moreover, government should be able to enforce stricter penalties forpseudo cooperatives that take advantage of the workers’ hard-earned money.Cases abound where pseudo-cooperatives collect contributions fromunsuspecting members only to be discovered later that the operators haverun off with the workers’ money.

There is also need for more government support for worker-ownedand -managed enterprises. Some workers who lost their jobs after the closure


of their factories have put up their own small garment businesses. TESDAshould also take an active role in giving business training for the workers’enterprises. The Department of Labor and Employment (DOLE) and thePhilippine Economic Zone Authority (PEZA) should also be able to assistthe entry of workers’ enterprises in special economic zones. In addition toestablishing the enterprises, government should also be able to help theworkers market their products. As a start, government could direct itsoffices to buy uniforms for their workers from these workers’ enterprises.

The campaigns likewise cover the issue of social protection and safetynets for displaced workers. There should be post-employment programsfor counseling, skills training, livelihood and entrepreneurship, andcooperatives. Government could also take on a more active role in jobsearching and matching for the displaced workers.19

Wage and social protection for the workers

There is also need to review the decades-old labor code of the country.One area where the code could be improved is its provisions on unionorganizing, particularly on the difficulty to form unions in factories. Theslow resolution of cases in the National Labor Relations Commission(NLRC) and the National Conciliation and Mediation Board (NCMB) isanother problem area identified by the campaigns. The long duration ofthe cases’ resolution deprives the workers of benefits due them.

Regarding wage and occupational and safety measures for the workers,the campaigns ask government to penalize employers for their Social SecuritySystem (SSS) arrears. Although employers collect contributions from theirworkers, some do not actually remit these to SSS. The organizations alsodemand that government require companies to put up bonds for separationand money claims for the workers. This is in response to cases in whichworkers are left with unpaid wages and benefits because owners illegallyclosed the companies. To provide protection for informal or subcontractedworkers, one of the recommendations of the labor groups is to expand thecoverage of Pag-IBIG and PhilHealth to this sector in addition to the alreadymandated SSS coverage.20


It was also suggested that instead of unions doing their own separatebargaining negotiations, this could be done on an industry basis. Workersin the garment industry could negotiate as one in the bargaining table as isthe practice in other countries. This way, the specific needs of the workersin the industry might be better addressed. For example, due to the prevalentsubcontracting arrangement in the industry, it is estimated that majorityof the garment workers belong to the informal sector who are mostly notunionized and therefore vulnerable to abuse. When the negotiation is doneon an industry basis, the welfare of these workers will also be given attention.Moreover, some company owners pay their workers on a per-output basis.However, as one respondent pointed out, there are no existing laws governingthe payment of salaries based on outputs; hence, such arrangement is alsosusceptible to abuse (Mendoza 2005).21

The workers’ need for occupational health and safety measures shouldalso be addressed. Several studies have shown that company owners havebeen remiss in providing occupational health and safety measures in theworkplace. In economic zones, decent and affordable housing should beprovided to workers in the area. Age- and sex-based hiring should also bepenalized.

As for workers who are out of employment, government should“facilitate post-employment programs as well as complementingmechanisms that would give the workers easy access to financial and technicalsupport.” The programs may be “job-career counseling, socio-economicventure, skills training and re-training, entrepreneurship programs,cooperatives and social enterprises” (Labor Forum Beyond MFA n.d.).

GTEB and institutional-related reforms

With the abolition of the MFA, it is mandated that the Garment andTextile Export Board will also be abolished since the latter was primarilyformed to allocate quotas to local contractors. In the advent of the abolitionof GTEB, the labor groups suggested that a new office be put up to dealwith the garment industry. This office should be tripartite in nature(composed of government, employer, and union representatives); it can


focus on market and trade facilitation, formulation of the industrydevelopment plan, and ensuring labor and social compliance of companiesin the industry. The Garment and Textile Industry Tripartite Council (whichcreated the GTEB) should be reconvened for the purpose of creating theoffice.

The Quick Response Teams (QRT) of the DOLE should also bestrengthened to include representatives from the Garment and TextileIndustry Tripartite Consultative Body (GTITCB). The agency could be animportant source of information on the problems and issues of the garmentand textile industries. QRT is a “strategy to monitor industry closures andretrenchment due to the adverse effects of globalization and economic crisesand to provide immediate and integrated package of assistance to displacedworkers including their dependents” (NCRFW 2003).

Civil-Society Initiatives

This section discusses the three civil-society initiatives—BMP-Almagate, Labor Forum Beyond MFA, and the GARTEX Labor Council—that have been formed to address the impending expiration of the Multi-Fiber Arrangement and problems besetting the garment industry. The BMP-Almagate initiative started in early 2004 when the BMP held rallies at theoffices of the GTEB, the Department of Trade and Industry (DTI), andDOLE to air the workers’ grievances in the workplace and the illegal closureof factories. The impetus for the protest actions of the BMP and its allianceis the closure of Novelty Philippines in September 2003 that displacedabout 2,500 workers. Owners of Novelty Philippines suddenly closed thefactory and left the country, leaving the workers with unpaid salaries andbenefits. According to Chodie Navea (2005), organizer of BMP’s public-sector workers, their organization made an assessment of the situation inthe garment industry after the Novelty closure. BMP decided to dosomething about the situation since besides Novelty, other factories haveshut down operations. According to a BMP study, several factories haveshut down operations or reduced the working time of their workers due toliquidity problems (table 2).


Table 2. Garment firms experiencing problems in 2003-2004

Establishment Location No. of Statusworkers

Wintertex Laguna 1,400 2 months temporary shutdown

Solid Mills Parañaque 1,200 Shutdown (October 2003)

Meritlux Laguna 600 3-day rotation

Asiatex Laguna 200 10-days-per-month work

Prima Apparel Laguna 500 100 workers retrenched

Sang-Woo Phils Laguna 517 RotationSupreme Baby Wear Mandaluyong 200 65 workers retrenched, 4-day

rotation

Yam Venture Laguna 400 3-day rotation

First Quality Rizal 100+ Temporary shutdown (September

2003)

Karayom Parañaque 700 Shutdown

A. Bylson Las Piñas 100+ Shutdown

Manila Bay Spinning Marikina 1,200 Partial rotation

Fairland Manila 115 Overtime work without pay

SB Sales Valenzuela 37 3-day work

Palmphil Garment Laguna 570 200 workers retrenched

Phil Pacific Parañaque 300 200 workers retrenched

Source: Espinola [2005?].

BMP’s assessment led to the holding of pickets at the offices of theGTEB, DTI, and DOLE, which are the government agencies concernedwith the garment industry. In the pickets, the workers asked governmentofficials to act on the case of the displaced workers of Novelty as well asthose of other factories. They also asked government to lay down acomprehensive plan to save the garment industry in the face of the variousproblems it is experiencing. Because of the pickets, the GTEB was forcedto hold dialogues with representatives of BMP and unions affiliated withthem. In the dialogues, the workers aired their concerns on issues affectingthe workers and the industry.


Meanwhile, the Labor Forum Beyond MFA was formed in early 2003through the efforts of the International Textile, Garment and LeatherWorkers’ Federation (ITGLWF) Philippines to examine problemsexperienced by the garment industry in view of the expiration of the MFAand to prepare the workers for the quota phaseout. According to AnnieAdviento, coordinator of ITGLWF Philippines, even before the actual dateof MFA’s expiration, the difficulty of competing in the international marketis already being felt by the local garment industry as there are a number offactories already shutting down operations. Because ITGLWF is a federationof workers in the garment industry, its members deem it necessary thatthey be at the forefront in addressing problems encountered by the workersin the sector, especially with regard to the pending expiration of the MFA(2005).

Prior to its initiative in the Philippines, ITGLWF sponsored aninternational conference involving its affiliates in countries to be affectedby the MFA phaseout. In the said conference, a plan of action wasdrawn whereby the ITGLWF national offices will initiate consultationswith the trade unions in the garment sector. ITGLWF also assessedthat although trade unions are aware and apprehensive about the effectsof the phaseout on the workers, nothing substantial is being done aboutthe situation.

In early 2003, ITGLWF Philippines initiated dialogues with its memberorganizations as well as other labor organizations on what should be doneto prepare the workers for the quota phaseout. There were twentyorganizations which initially participated in the dialogues. The importantobjectives of the dialogues are for the labor organizations to engage incollective action and assess the efforts of employers and government inconnection with the quota phaseout. The initiative was eventually namedLabor Forum Beyond MFA. In the dialogues, the forum formulated theeight-point labor agenda. The agenda was later presented to governmentrepresentatives from the GTEB, DTI, and DOLE. The GTEB eventuallytook the role of organizing the succeeding dialogues among therepresentatives of labor, management, and concerned government agencies.


In these dialogues, the labor sector was represented not only by LaborForum Beyond MFA but also by BMP-Almagate and GARTEX.

The presentation of the eight-point action plan was very timely becausethe GTEB at the time was preparing the industry transformation plan. Inthe GTEB fora, management representatives were also able to air theirconcerns about the impending MFA phaseout. They expressed that about70 percent of the 320,000 registered workers will be adversely affected bythe quota phaseout. Adviento said that the actual number of workers to beaffected is much more as it is estimated that informal workers in the industryeasily fall in the 300,000-range.

The Garment, Textile and Allied Industries Labor Council isspearheaded by the Fair Trade Alliance and is made up of eighteenlabor federations. Formed in November 2004, the council was put upto address the issues faced by the garment and textile industries,including those attendant to the expiration of the MFA. Moreimportant, GARTEX is envisioned to take an active role in thepreservation and creation of jobs in the industry (Fair Trade Allianc e).According to GARTEX lead convenor Angelito Mendoza (2005), thealliance was also formed to answer the need of putting up an industry-wide alliance in the absence of an industry-wide union. This way, thealliance will be able to tackle the problems peculiar to the industry,particularly the workers’. To drum up interest for its campaigns,GARTEX has conducted several dialogues on issues besetting thegarment and textile industries with prominent media coverage. In thesedialogues, government representatives were often invited. GARTEX alsoactively participated in government-initiated consultations on issuesrelated to garment and textile.

Two important things should be noted regarding these initiatives. First,women are widely represented in these campaigns as they comprise asubstantial membership in the groups and federations that put up theinitiatives. Second, the media have been very helpful in making thegovernment, including the public, take notice of the issues raised by thelabor groups. Many of the fora conducted by the labor groups were covered


by the media. In addition, the series of exposés on garment factoriesoperating as sweatshops brought to the attention of government and thepublic the exploitation garment workers are subjected to. One prominentexposés is the Anvil garment factory in which the workers were given drugsto stay awake for forty-eight hours straight (Lalata and del Puerto 2003).Media coverage of the rallies staged by labor groups also helped in gettingthe government’s attention.

Assessing the State-Civil Society Engagement

The respondents were pleased with the willingness of government todialogue with them. After initiating their engagement with government,the latter took on the role of organizing the succeeding dialogues. Theysaid that although much still has to be done about the problem, thedialogues led to the revival and reestablishment of the Clothing and TextileIndustry Tripartite Council (CTITC). Although a tripartite council existedin the 1980s, this was not active at all.22 With the abolition of the GTEB,a lot of groups from the labor and management sectors pushed for theorganization of a government office focusing on the garment and textileindustries. Hence, the organization of the CTITC was very muchwelcomed.

The mandate of the CTITC includes the following:

(It) shall act as an advisory and consultative body to the DOLE and DTI,labor sector and management sector in terms of policies and programsaffecting the clothing and textile industry. As such, it shall endeavor to arriveat a consensus on matters brought to the body for consideration, deliberationand/or resolution.

The CTITC shall likewise act as a clearinghouse and documentationcenter for issues of common interest to government, labor and managementby incorporating its discussion in the regular agenda. (Memorandum ofAgreement re CTITC, March 2005)

The CTITC comprises representatives from government, labor, andmanagement sectors. The two government representatives are from DOLEand DTI. The labor sector is represented by six representatives from Alyansa


ng mga Manggagawa sa Garment at Textile (Almagate), Associated LaborUnions of the Trade Union Congress of the Philippines (ALU-TUCP),Federation of Free Workers (FFW-LACC), Philippine Transport and GeneralWorkers Association - Trade Union Congress of the Philippines (PTGWO-TUCP), Alliance of Progressive Labor (APL), and National Confederationof Labor (NCL). The respondents expressed satisfaction with the council’slabor composition as the different unions in the garment and textileindustries were represented.23 It also helps that employers form part of theCTITC. This way, employers will become aware of the grievances aired bythe workers in the council. The ITGLWF was selected by the civil-societygroups to act as secretariat for the labor sector.

Besides having a venue for tripartite dialogues regarding issuesconfronting the garment and textile industries, the CTITC can also beutilized by the labor groups for the advancement of their legislativeagenda. An example of legislation that needs to be enacted is thatrequiring companies to put up a trust fund for their employees. Thiswill address the problem of employers leaving the workers with unpaidsalaries and benefits when they close shop. Another is the need torationalize through legislation the wages of workers who are paid on aper-output basis. The CTITC will also coordinate the efforts of differentgovernment agencies acting on the problems concerning the workersand the industries. Adviento said that another important output of theinteraction, besides the CTITC, is the putting up of the Quick ResponseTeams, which were established to assist displaced workers or those whoare victims of violations.

The engagement that transpired so far between the labor groups andthe government can be said to be marked by high political catalysis.According to Magadia (2003), political catalysis is the “process ofaccelerating state-society interaction as both state actors and societal actorssend signals of willingness to engage each other in the development ofpolicy.” However, it remains to be seen if this kind of relationship betweenthe state and civil-society groups can be sustained throughout theinteraction. The CTITC, which is the main body tasked to oversee solutions


to the problems of the industry and facilitate government engagementwith civil-society groups was formed only in April 2005. Given thevarious problems that need to be addressed in the industry, it is stilltoo early to tell if CTITC will be able to deliver. There are naggingissues to address—for example, the corruption in the Bureau ofCustoms, smuggling, nonremittance and nonpayment of SSS benefits—but government has yet to act effectively on these problems. A numberof the respondents said that although these problems have been broughtto the attention of government in the past, nothing significant hasbeen done about them.

Even though the success of the interaction between civil-society andthe state cannot be entirely ascertained at this time, what can be said isthat the actions of civil-society groups forced government to act on thesituation. The respondents perceive that government is not doing anythingsubstantial about the situation even though ten years ago it had been fullyaware that the MFA was going to expire.

Overall, civil-society groups managed the interaction with governmentbecause of their capability to mobilize the internal and external resourcesavailable to them. Using the framework of resource mobilization andpolitical opportunity structure, the next section discusses in detail how thecivil-society groups made use of the resources available to them to advancetheir agenda.

Internal resources

STRATEGIES. In engaging government, civil-society groups utilized boththe formal and informal means of intervention in their campaigns. It wasearlier shown how the labor groups made use of the formal venues inengaging government. Formal venues are the dialogues and fora organizedby government with the NGOs.

One feature of a good strategy is its being able to discern the correctvenue to engage government to get the most out of the interaction (Wuiand Lopez 1997). In the case at hand, it can be said that civil-societygroups were able to choose the correct venue—which is the executive branch,


in particular the GTEB—because before the labor groups initiated theinteraction concrete policies for the garment and textile industries in thecontext of MFA’s expiration are yet to be drawn up. In engaging the GTEB,therefore, civil-society groups are able to influence government policydirections for the industries.

Alongside the formal means, civil-society groups have also been usinginformal means of intervention in their advocacy vis-a-vis government.Holding of rallies and pickets are resorted to by labor groups (as shown inthe case of BMP) to call the attention of government to their issues. Theseinformal means proved effective in some cases as shown in the example ofBMP. Their rallies and pickets led the GTEB to hold a series of dialogueswith the group.

The media have been used extensively by civil-society groups intheir campaigns. The respondents said that the media have beeneffective in making the government aware of issues confronting theindustry. Likewise, the media coverage of the rallies and fora conductedby labor groups helped in getting the attention of the authorities.Examples of fora covered by the media are those conducted by GARTEXon the implications of the expiration of the MFA as well as otherproblems besetting the industry.

TECHNICAL KNOWLEDGE. The technical capability of the labor groupscan be seen in their being able to detail the problems besetting the garmentand textile industries as well as suggesting recommendations on how thesemight be addressed. These detailed problems and suggestedrecommendations are partly discussed in the earlier part of the paper. It isworth noting that in the dialogues, labor groups came prepared with well-researched presentations. Because of this, the labor groups were able tocommunicate their agenda to government. The technical capability of thepeople behind the civil-society campaigns is likewise shown in the variouspublic fora they organized. One proof of their technical capability is thefact that the media find these fora worth covering. Also, in various featurearticles done on the expiration of the MFA and the state of the garmentand textile industries in general, the opinions of the representatives of thelabor groups were sought. This extensive media coverage in turn helped


bring the problematic state of the garment industry to the consciousnessof government and the public.

ORGANIZATIONAL CAPABILITY. The capability of the labor groups toorganize themselves is evident in the initiatives they have put up. In thecase of BMP and Almagate, at a time when factories were being shut downin succession, they started mobilizing their member-organizations for theholding of rallies and pickets to get government attention regarding theplight of the workers and the industry. ITGLWF and GARTEX alsoorganized their members in their respective federations for the holding ofdialogues and fora about issues confronting the garment industry. Becauseof these actions, government made available several fora for civil-societyengagement.

The labor groups negotiated with government as one sector, therebystrengthening their position and enabling them to realize some importantitems on their agenda. Foremost of these is the reactivation of the CTITC,wherein they were subsequently given seats in the council. After theirappointments to the CTITC, labor groups have continued to organizethemselves and consult each other about the agenda they would push inthe body.

External opportunities

Besides the resources internal to their organizations, the civil-societyorganizations were able to take advantage of the opportunities presentedby their external environment.

INSTITUTIONAL OPENINGS. These are made possible particularly by theexpanding space for democratic and consultative processes evident in post-EDSA governments. In the case at hand, labor groups made use of theopenings provided by DOLE, DTI, and GTEB to advance their agenda.Nonetheless, it should be noted that these openings also became possiblebecause of the actions of the civil-society groups. As discussed in the casestudy, through the pickets and rallies they staged in front of the governmentoffices and their initiatives to seek dialogues with the officials, governmentmade available more venues for the interaction.


It is worth noting that civil-society groups’ engagement with the GTEBalso opened up opportunities for dialogues with other government agencies.One respondent said that when they were taking up the issue of corruptionin the Bureau of Customs, the GTEB invited representatives from the saidoffice to the dialogues. When GTEB was taking up the issue of the failureof management to remit Social Security System (SSS) contributions or thelivelihood training for displaced garment workers, it invited SSS and theTechnical Education and Skills Development Authority (TESDA) to theconferences (Adviento 2004).

KEY ALLIES. Ranking government officials are considered allies of thelabor groups, in particular the secretaries and officials of the DTI, DOLE,and GTEB. The respondents from labor groups said that the governmentofficials were very accommodating, even spearheading a number of dialogueswith them. In particular, a committee was put up in the GTEB, primarilytasked to facilitate dialogues with the labor groups.

Although labor groups have locked horns with their employers onseveral issues, prominent businessmen in the garment sector who attendedthe dialogues to air their concerns about the survival of the industry canalso be considered allies of the labor sector. The presence of thesebusinessmen certainly helped in pressuring and stepping up the actions ofgovernment. Members of the academe have also helped in the campaignsof the labor groups. Their researches on the implications of the expirationof the MFA, which have bolstered the assertions of the labor groups, havebeen presented in various fora.

KEY EVENTS. Civil-society groups launched their campaigns against thebackdrop of the impending expiration of the MFA and the closures ofgarment factories. With the realization of the implication of the agreement’sexpiration and the factory closures happening in succession, governmenthas to dialogue with labor groups clamoring for actions on the problems.As mentioned in the earlier part of the paper, many doubt the ability ofthe garment industry to compete against cheaper and more efficientproduction sites in a quota-less regime with the expiration of the MFA;hence, the fate of workers numbering by the hundreds of thousands hangin the balance.


INTERNATIONAL LINKAGE. Respondents from the labor groupsacknowledged that their networking with international organizations hasbeen very helpful in their campaigns. They often meet with these groupsin order to learn how their agenda can be further advanced. For instance,they learn from the experiences of labor groups abroad that it would helpif they negotiate as one sector vis-à-vis the government and employers. Inview of this, local labor groups have been pushing for the realization of anindustry-wide labor organization in the garment and textile sectors.24

In this case study, the benefit of having an international linkage ismanifested in the support extended by the International Textile, Garmentand Leather Workers’ Federation to the labor groups. The ITGLWF’s nationalchapter in the Philippines spearheaded several dialogues with governmentoffices, particularly the GTEB. It actively organized several labor groupsand was a key instrument in the formation of the Labor Forum BeyondMFA. The ITGLWF is now acting as the secretariat of the labor sector inthe CTITC; hence it has been actively meeting with the labor groups forthe presentation of a consolidated labor position in the CTITC.

Conclus ionConclus ionConclus ionConclus ionConclus ion

The discussion shows how civil-society groups were able to meaningfullyengage government because of their utilization of resources andopportunities available to them both internally and externally. Although alot still needs to be done, one of their important achievements is the puttingup of the Clothing and Textile Industry Tripartite Council, an office entirelydevoted to the garment and textile industries. If it were not for the actionsof civil-society groups, government may not have acted on the need for abody that would rationalize and set policy directions for the industries.25

Nonetheless, since the CTITC was formed only in April 2005, it remainsto be seen whether or not it will be able to address the long list of problemsvoiced out by the civil-society groups. Although the industry has inheritedproblems from the past, these have been compounded in the era ofglobalization.


The problems of the garment industry in the context of globalizationare myriad. It is of utmost importance that government lay down acomprehensive plan on how to confront the problems and resuscitate theindustry. A lot of factories are closing down and government cannot expectthat new businesses will be put up without any action on its part. Asarticulated by the Fair Trade Alliance (2003), government should realizethat local industries in general cannot be globally competitive, price- andquality-wise, “if they continue to suffer from poor and expensiveinfrastructures, inaccessible formal credit, high cost of power and utilities,unfriendly bureaucracy, unstable currency, and a generally difficult economicenvironment.” Our inability to stand up against foreign competition isevident even in our own domestic market. As it is now, foreign garmentsflood our market and, sadly, these are patronized by domestic consumersbecause of their better price and quality.

Despite the doomsday scenario played up by some who insist that thePhilippine garment industry should just be allowed to die a natural death,others remain hopeful. As articulated by the labor groups, something couldstill be done about the industry as long as government has the political willto implement the needed remedies. Some of these reforms are the curbingof corruption in the Bureau of Customs, solving the problem of smugglingand ukay-ukay, and utilizing the antidumping measures allowed by theWTO in order to stem the unbridled entry of garments into the country.In the meantime government should embark on a campaign for localconsumers to patronize our garments. As both the labor groups andmanufacturers have suggested, government could start by directing its officesto buy their employees’ uniforms from local manufacturers. Governmentshould also put in place a systematic plan of developing our textile industry.Despite the fact that our garment export has increased over the years, ithas remained import dependent. The inability of government to put inmore resources for research and development of the textile industry hasbeen pinpointed as a major cause of the problem.26

Moreover, government’s rehabilitation plan for the industry shouldnot leave out the welfare of the workers as globalization has made their


plight more complex if not more difficult. Globalization has the effect ofputting downward pressure on the wages and benefits of the workers becauseof the desire of government to make the domestic environment competitiveand attractive to foreign investments. It is said that the minimum wage ispegged only at an amount barely enough to cover the daily cost of livingfor a family of six (Angeles 2003), because of pressures from capitalistsincluding those operating transnational corporations (TNC). Governmentusually accedes to the demands to prevent the capitalists, especially TNCs,from transferring to production sites where the minimum wage is lower.

Also, the state is being overly concerned with maintaining a favorablebusiness climate for international capital, which has led to restrictions onthe activities of labor unions, as exemplified in the “no union, no strike”policy in export processing zones supposedly to realize industrial peace.But, as Angeles (2003) pointed out, “genuine industrial peace throughbetter labor-management cooperation can only take place when workingand living standards are improved.” Hence, rather than being overly fixatedon the activities of unions, government and management should devotemore efforts to the improvement of such standards.

Moreover, the globalization of production has been increasinglycharacterized by the flexibilization of labor manifested in part-time,temporary, casual, and subcontracted work. The feminization of labor formspart of the flexibilization, which means that women are increasingly forcedout of the formal labor sector and are subjected to the disadvantages ofinformal employment. Although government still needs to enforcecompliance among companies to observe the lawful entitlements of workersin the formal sector, it should also be able to focus on the needs of those inthe informal sector. After all, the latter make up a substantial portion ofthose working in the garment industry. Besides the fundamentalrequirement of protecting their human and labor rights, otherrecommendations of the labor groups for those in the informal sector istheir inclusion in PhilHealth and Pag-IBIG coverage.

The effect of the footloose nature of capital due to globalization is seenin the recent closures of garment factories in the country, as companies


move to production sites more conducive to profit accumulation. Thesudden closures of factories has left hundreds of workers with unpaid wagesand benefits. Most of these owners have left the country and can no longerbe compelled to pay the workers’ entitlements. To address this problem,government should thus implement the suggestion of the labor groupsthat companies be required to put up a trust fund for the workers in theevent of sudden closure. A comprehensive assistance package for workerswho are suddenly unemployed should also be put in place. This assistancecan be in the forms of skills training, providing capital to start a business,and, later, product marketing. 27

In the face of the garment industry’s gargantuan problems, however,what can provide a glimmer of hope is the ever-activist stance of the laborsector. As shown in the study, their capability to organize and bring theirconcerns to government’s attention has led the latter to act on their issues.However, as earlier noted, those identified with the national democraticmovement are conspicuously absent in the initiatives discussed in the paper.It cannot be denied that the unity of labor groups can go a long way forthe advancement of the workers’ agenda, especially in the legislative arenawith the party-list representation. As it is now, because of ideologicaldifferences, some party-list representatives are expected to support onlythe agenda of labor groups with whom they share the same ideologicalthinking. Labor groups that do not adhere to the same political thinkingcannot expect support from differently minded party-list representatives.

It is also worth noting that as women are the ones mostly affected bythe problems of the industry, they have also been at the forefront of thecampaigns. As noted earlier, women comprise substantial membership ingroups that are in the forefront of the campaigns. Labor organizations arealso increasingly giving attention to the plight of informal workers. Therehave been efforts to organize the latter as part of the strategy of labororganizations to answer the needs of workers in the globalized setup (Viajar2004). In addition, their concerns are widely articulated in various laborgroups’ campaigns. Finally, the globalized setting has afforded the workersto take advantage of international networking. The expertise and assistance


of these international organizations have made possible the realization ofsome of the local labor groups’ advocacies.


1. This was pointed out by Rosalinda Pineda-Ofreneo in her review of my paper.2. According to Angelito Mendoza, lead convenor of the Garments, Textile and Allied

Industries Labor Council or GARTEX Labor Council, the tariff rates for importedgarments should be placed at 30 percent so as to provide protection for our localproducers. The biggest threat to our local producers are those coming from Chinawhose products mostly cater to mass consumers.

3. The extent of smuggling is described thus: “the volume of smuggled yarn, fabricsand garments was placed at 151,000 metric tons, or 51 percent of the estimated300,000 metric tons imported into the country (based on a per capita consumptionof four kilograms for an estimated total population of 75 million)” (Bacalla 2004).

4. Ideally, there should be a close association between the garment and textile industriesas our local textile industry should be the source of materials for garment production.Although in other countries the linkage between the two industries is well-established(especially in the case of successful garments exporters like China and South Korea),this is not the case in the Philippines (Austria 1994, 10).

5. In the early 1960s, the garment industry started to experience growth through theenactment of the Embroidery Act (RA 3137) in 1961. Companies registered underthe Act “were allowed to import raw materials free of duties and taxes” (Austria1994, 12). Other important legislation that led to the growth of the garmentsexport are: The Exports Incentive Act (RA 6135) in 1970, Act creating the ExportProcessing Zones (RA 5499 and PD 66) in 1972, and Executive Order 537 creatingthe Garment and Textile Export Board (GTEB) in 1979 (Pineda-Ofreneo 1989).The GTEB was in charge of integrating and rationalizing government policies andprocedures governing the Philippine garment industry (GTEB). However, themain bulk of the work of GTEB was the allocation of the MFA quota to contractors.Hence, with the abrogation of the MFA, the GTEB was also abolished.

6. However, some studies contend that the country will gain from the MFA phaseoutas it will “increase the market access of the country in the world market, particularlyin the industrialized countries” with the abolition of the quota restrictions (Austria1996, 29). The country could focus on products where it has comparative advantage.Moreover, our workers’ skills for detailed embroidery is another area where ourgarments industry could be globally competitive (Austria 1996, 20). Donald Dee,


president of the Philippine Chamber of Commerce and Industry (PCCI), said ourcurrent strengths are washed-out denims and high-end T-shirts.

7. In the discussion, it would be helpful to use a study conducted by the Third WorldStudies Center (TWSC) in framing the opinions of the respondents. The TWSCstudy examined the perspectives and positions of a particular segment of civil-society groups in the Philippines that have been critical or wary of globalization. Aportion of the study examined how the groups define globalization. Thecharacterizations given by the respondents of the study were grouped under thefollowing categories: economic, political, social, technological, and cultural (Frago,Quinsaat, and Viajar 2004).

Among the responses characterizing globalization that were grouped under theeconomic category are: neoliberalism, global capitalism, openness, interdependence,competition among developing and developed countries, and imperialism. Underthe political dimension, responses—such as mutual imposition of treaties,conventions and instruments by member nations of international bodies;marginalization of Southern countries; abdication of state responsibilities; andneocolonialism—were found. For the social aspect, the research elicited the followingresponses: threat to the poor and workers, solidarity of civil-society groups, andthreat to informal sectors. Under the technological dimension, the responses includeadvancement in technology; and worldwide spread of knowledge, ideas, andinformation. Homogenization, cultural aggression by the West/the US,counterdiversity, and cultural interchanges were found in the cultural dimension.

For this study, the economic, political, and social categories will be used tounderstand how globalization has affected the garment industry. In the ensuingdiscussion, however, the economic and political dimensions are combined toaccommodate overlaps in the responses of the respondents.

8. The data of GTEB, however, show that despite the closures there is net increase inthe number of factories setting up operation in the Philippines. Donald Dee,president of the Chamber of Commerce and Industry, nonetheless said that thesenewly opened factories will not stay long in the country as the owners are justassessing the situation in China before they finally move their operations there.

9. Describing the present composition of companies, Ofreneo wrote that they usuallymaintain a “shrinking force of regular workers and an expanding army of irregulars,variedly called by union organizers as casuals, contractuals, 5-5 workers” (2003,46). However, Cielito Habito in his written review of this book’s manuscript pointedout the benefits of subcontracting. He wrote, subcontracting “has been instrumentalin other countries in the promotion and development of the small and medium


enterprise (SME) sector by promoting the development of synergistic partnershipsbetween SMEs and large enterprises (e.g., the automobile industry in Japan).Ultimately, an enlivened SME sector resulting from these synergies that originate insubcontracting leads to further expansion in employment opportunities and workers’choices.”

10. Subcontracted worker is a general term used to cover a range of contractualarrangements for workers who are not permanent, formal economy workers (Lundand Nicholson 2003, 60).

11. It is estimated that about half of the total number of garment workers would beseriously affected by the expiration of the MFA (Dela Cruz 2004).

12. According to Rosalinda Pineda-Ofreneo, home-based workers are the mostaffected by computer-aided embroidery which took out jobs from communitiestoward factories. However, even factory workers today are threatened by thepresence of these computer-aided technologies. This was pointed out in herwritten review of my paper.

13. Clean Clothes Campaign was formed to “improve working conditions andto empower workers in the global garment industry, in order to end theoppression, exploitation and abuse of workers in this industry, most of whomare women.” It does this by: “1) putting pressure on companies to takeresponsibility to ensure that their garments are produced in decent workingconditions; 2) supporting workers, trade unions, and NGOs in producercountries; 3) raising awareness among consumers by providing accurateinformation about working conditions in the global garment and sportswearindustry, in order to mobilize citizens to use their power as consumers; and4) exploring legal possibilities for improving working conditions, andlobbying for legislation to promote good working conditions and for lawsthat would compel governments and companies to become ethical consumers”(Clean Clothes Campaign).

14. Among the aims of the ITGLWF are to: “assist unions in developing countries inorganizing workers and educating their members to play an active role in theirunion” and “lobby intergovernmental organizations and other relevant institutionsto ensure that the interests of workers in the sectors are taken into account indecisions made at the international level” (International Textile, Garment and LeatherWorkers’ Federation).

15. According to the International Labor Organization (ILO), most of the principlescontained in corporate codes pertain to occupational safety and health (25percent), nondiscrimination (25 percent), child labor (45 percent), wages (40


percent), forced labor (20 percent), and freedom of association (15 percent).However, according to the paper’s reviewer, Rosalinda Pineda-Ofreneo,

the monitoring of codes of conduct is problematic as workers, even iforganized, feel obliged to lie to save their jobs. This conclusion is furtherdiscussed in Lund and Nicholson (2003).

16. E-mail response of Roy Velez of the Kilusang Mayo Uno to my inquiry datedAugust 1, 2005.

17. In some countries in South Africa, the trade of secondhand clothing has led tothe collapse of their garment industries (International Textile, Garment and LeatherWorkers’ Federation).

18. Hutchison (2001) identified the following factors why subcontracting iswidely practiced in the Philippines. “First, the nature of the sewing technologyutilized in the industry—there is no integrated production line. After cuttingthe garment’s pattern, one worker can finish the whole work with the use ofa sewing machine. Sewing machines can also be easily installed at home orin production areas utilizing limited space… Second, sub-contracting ispracticed to reduce labor costs and/or to prevent the intervention of unions.Workers in small sub-contracting arrangements receive lower wages thanthose working in large factories. In addition, because regular workers arespared from rendering long hours of work to meet quotas and deadlines,manufacturers are therefore able to prevent possible complaints and demandscoming from unions.”

19. A number of the respondents nonetheless said that government should do serioushousekeeping to improve the economy and make more jobs available for theworkforce. Retraining the garment workers for other jobs is useless if alternativejobs are not available.

20. Some informal workers already avail themselves of PhilHealth benefits as indigentsor paying members. However, information about and access to PhilHealth benefitsare still extremely limited. This was pointed out by Rosalinda Pineda-Ofreneo in herreview of my paper.

In the Philippines, a substantial number of subcontracted workers do their workat home. The latter are also known as homeworkers. In the garment industry, womenmake up most of the workers in the informal sector. As informal workers, they workwithout secure contracts, worker benefits, or social security/protection (Lund andNicholson 2003, 15). Social security covers the core contingencies of: health care,incapacity for work due to illness, disability through work, unemployment, maternity,child maintenance, invalidity, old age, and death of a breadwinner (Lund and


Nicholson 2003, 17).21. Although the Bureau of Working Conditions conducts time and motion studies

to determine salaries of workers who are paid based on piece-rates, this is onlydone upon the request of the firms. If the owner does not initiate any suchrequest, then no study will be conducted (Soriano 2004).

22. This was pointed out by Rosalinda Pineda-Ofreneo, Angelito Mendoza, andTeresa Soriano.

23. Because they did not participate at all in dialogues with government, labor groupsidentified with the national democratic movement are not represented in the Clothingand Textile Industry Tripartite Council.

24. However, a number of the respondents admitted that the different politicalpersuasions of the labor groups may deter the formation of an industry-wideunion.

25. According to the civil-society respondents, prior to their conduct of rallies anddialogues, government has not made policy pronouncements on its plans for thegarment industry in the advent of MFA expiration.

26. According to Angelito Mendoza (2004), the Multi-Fiber Arrangement is also to beblamed for the underdevelopment of the textile industry as foreign companiescontracting out jobs to local producers prefer the use of imported textiles fortheir garments.

27. Aside from providing financial support as capital for the workers to start abusiness, government should also help the workers market their products.The case of Karayom workers illustrates government’s lack of comprehensivesupport for the workers. Karayom Garments Manufacturing, located inParañaque, Metro Manila, was illegally closed in January 2003 without thenecessary formal application for closure with a thirty-day notice. Thecompany, which was owned by Yusuf Suveyky, an American, produces solelyfor export to the US (Salidumay).

When workers from the Karayom garment factory found themselves jobless (withunpaid salaries and benefits) after their employer suddenly left the country,government gave the workers funds that they could use to start a business. Butbecause the funds were limited, the workers were reduced to sewing and sellingrugs. The income they earn from this venture is hardly enough to meet their dailyneeds and that of their families. One respondent pointed out that governmentsupport should have been more sufficient and comprehensive. Since the workersknew how to make sportswear and swimwear, government should have given thembigger financial support to enable them to buy the raw materials for the products.


Government should not end with the extension of financial support; it should alsohelp in the marketing and promotion of the products sewn by the workers. Itshould help launch campaign with the public to buy the “unbranded” productsthat are as good as the more expensive branded imported products (Arellano 2004).


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———. 1996. The effects of the MFA phaseout on the Philippine garmentand textile industries. Philippine Institute for Development StudiesDiscussion Paper Series No. 96-07, June.

Bacalla, Tess. 2004. Smuggling killing shoe, garments and textile industries.Philippine Center for Investigative Journalism. http://www.pcij.org/stories/2004/smuggling3.html.

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Clean Clothes Campaign. Frequently asked questions. http://www.cleanclothes.org/faq/faq02.htm.

Cororaton, Caesar. 1997. Productivity analysis in garment and textile. PhilippineInstitute for Development Studies Discussion Paper Series No. 97-09,February.

Dee, Donald (president, Philippine Chamber of Commerce; former president,Employers Confederation of the Philippines). 2004. Interview by Ma.Glenda S. Lopez Wui. Tape recording. November 22.

Dela Cruz, Roderick T. 2004. Life after quotas. [email protected], October28. www.abs-cbnnews.com/NewsStory.aspx?section=Focus&oid=62400.

Dela Cuesta, Lynly (senior tariff specialist, Philippine Tariffs Commission).2005. Telephone interview by Ma. Glenda S. Lopez Wui. July 26.

Espinola, Rhodz. [2005?]. Impact of AFTA on women workers in the garmentindustry. Unpublished.

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Fair Trade Alliance.Preservation and creation of jobs in the garments industry.http://www.fairtradealliance.org/campaigns-article3.htm.

Frago, Perlita, Sharon Quinsaat, and Verna Dinah Viajar. 2004. Philippinecivil society and the globalization discourse. Quezon City: Third World StudiesCenter.

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Lalata, Rommel, and Luige del Puerto. 2003. Garment workers drugged tostay awake for 3 days. Inquirer News Service, July 3. http://www.inq7.net/nat/2003/jul/03/nat_4-1.htm.

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Magadia, Jose. 2003. State-Society relations in a restored democracy. QuezonCity: Ateneo de Manila University Press.

Mendoza, Angelito (lead convenor, Garment, Textile and Allied Industries LaborCouncil or GARTEX Labor Council). 2005. Interview by Ma. Glenda S.Lopez Wui. Tape recording. April 15.

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Navea, Chodie (organizer of Public Sector Workers, Bukluran ng ManggagawangPilipino). 2005. Interview by Ma. Glenda S. Lopez Wui. Tape recording.March 3.

Ofreneo, Rene. 2003. Globalization and industrial crisis. In Fair trade not freetrade, 41-45. Quezon City: Fair Trade Alliance.

Ofreneo, Rene et al. 1996. Profile of the national capital region and the garmentand textile industry. Regional Tripartite Wages and Productivity Board,DOLE-NCR.

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Balancing Consumer andBalancing Consumer andBalancing Consumer andBalancing Consumer andBalancing Consumer andCorporate Interests in theCorporate Interests in theCorporate Interests in theCorporate Interests in theCorporate Interests in theTelecommunications IndustryTelecommunications IndustryTelecommunications IndustryTelecommunications IndustryTelecommunications Industry

Ronald C. Molmisa

As countries throughout the globe attempt to become economicallycompetitive, the Philippine government embarked on reforms toopen up the telecommunications industry in early 1990s. There

was a realization that the poor telecommunications infrastructure has beendragging the economy down (Shooshan and Temin 1999, 2). Overall,liberalization has affected the local industry in three ways—globaloperations, regional and multilateral agreements, and new global services(International Telecommunications Union 2002, 4). Almost all majortelecommunication companies (telcos) in the country have strategic foreignpartners and investors. Economic policymakers ascribed the country’stelecommunications sector improvement and competitiveness in the worldmarket to its participation in regional trading arrangements under theauspices of the World Trade Organization (WTO), the ASEAN Free TradeAgreement (AFTA), the Asia-Pacific Economic Cooperation (APEC), andthe International Telecommunications Union (ITU), among others, whichprovide policy assistance in addressing local industrial issues. Advancementin information and communication technology introduced new servicesin the market like mobile phone roaming, global satellite systems, andthird-generation (3G) services that industry players enhance and maximize.

155


The main problem, however, is that the sector was liberalized even beforethe basic need for telecommunication service was satisfied. This broughtserious issues, which industry players, especially the telcos, have to contendwith.

This paper is an exploratory research on state-civil society relations inthe Philippine telecommunications industry. It aims to accomplish threethings:

1)to describe and analyze the dynamics and means of interventionused by civil society organizations (CSOs) in engaging the state inthe context of liberalization.

2)to explain the factors that accounted for CSOs’ success in terms ofpolicy outcomes. By looking at political opportunity structures,this paper explores how civil society organizations are able tomaximize available internal and external resources and how thesetranslate to their success or failure (Kitschelt 1986).

3)to provide recommendations on how to strengthen state-civil societyrelations in the industry.

In order to accomplish the above-mentioned objectives, this paperis organized in three sections. The first part provides the structure ofthe industry before and after its liberalization, the current regulatoryframework, and a discussion of the evolution of telecommunicationpolicies in the country vis-à-vis the story of the monopoly of thePhilippine Long Distance Telephone Company (PLDT). The nextsection delves into the state-civil society relations in the industry.Apparently, the weaknesses of the National TelecommunicationsCommission (NTC) as an industry regulator reflect the vulnerabilityof the state in the face of liberalization. The lack of active civil societyorganizations in the industry augurs well for the strong involvement ofthe business sector in engaging the state in policy debates anddiscussions. The experiences of TxtPower and the Philippine InternetServices Organization (PISO) are discussed to demonstrate how civil-society groups operate amid political opportunities and constraints. The

Balancing Consumer and Corporate Interests in the Telecommunications Industry 157

third section synthesizes the discussions and offers recommendations onhow to increase civil society participation and how to make it more effective.Primary data gathering for this study was carried out through semistructuredkey informant interviews with industry stakeholders and actors. Secondarydata were culled from print media articles, Internet-based sources, academicstudies on the industry, and government sources including notes on publicforum and consultations, agency reports, memorandums, and otherissuances from August 2004 to January 2006.

TTTTTelecommunications Industry Overviewelecommunications Industry Overviewelecommunications Industry Overviewelecommunications Industry Overviewelecommunications Industry Overview

For more than seventy years, the telecommunications sector wasgoverned by the private sector under a virtual monopoly structure. Withthe lack of competition and limited capital, the industry hardly grew. Thiscondition was once criticized by former Singapore Prime Minister LeeKuan Yew who once commented that “99 percent of Filipinos are waitingfor a phone line, while the other one percent are waiting for a dial tone”(cited in Cabanda 2002). This dismal condition can be summarized asfollows (Patalinghug 2004):

1) Only 16 percent of the total land area are being serviced.2) Only half a million installed lines were utilized.3) Poor quality of service of the major telecommunication

company.4) Unbalanced distribution of service between rural and

urban areas.5) Outdated infrastructure and inadequate interconnection

of telecommunication facilities.

Liberalization of the industry introduced significant benefits not onlyto the public but also to small market players. It engendered an excitingmulti-operator environment characterized by competition,1 mergers,strategies, and counter-strategies of key players (Alonzo and San Pedro


1997). Although PLDT is still a market giant to contend with, it no longerpossesses the same market clout it enjoyed before liberalization. Prior toderegulation, PLDT owned at least 85 percent of the country’stelecommunications infrastructure. It has exercised virtual monopoly overlocal, national, and overseas calls because it owns the country’s onlytelecommunications backbone facilities (Serafica 1998).

Foreign technology, financing, and expertise were made accessible,leading to improved services and more foreign direct investment, mainlydue to foreign partnerships with local companies. Foreign partners of localcompanies include First Pacific Group of Hong Kong (a major shareholderof PLDT), Singapore Telecoms and Deutsche Telekom (Globe), NewTelecom (Digitel), Korea Telecoms (partner of Capwire), Shinawatra ofThailand (Islacom), Cable and Wireless (Eastern Telecoms), Millicom(Extel-com), Nynex (ICC), Comsat USA (Philcom), and Nippon Telegraphand Telephone Corp. (Smartcom). In 1999, foreign direct investments(FDI) in the industry increased by over 480 percent to PHP 524.7 billionfrom PHP 90.2 billion in 1992 (National Economic and DevelopmentAuthority [NEDA] 2001). The service sector, which comprises about 48percent of the country’s total GDP, increased by 3.23 percent in 2004mainly due to the telecommunications sector.2 A study reveals that theinvestments in the telecommunications sector salvaged the ailing economyof the country during the early period of liberalization in 1994-1997(Abrenica 1999). At present, the telecom industry serves as one of thecountry’s vibrant economic sectors. Table 1 shows the current structure ofthe sector.

Government requirements for industry players during the early yearsof deregulation caused the upward trend in the telephone density andmobile phone subscription. Landline telephone density (number oflines per 100 people) improved from the meager 2.01 in 1995 to 9.05in 2000 (table 2). Although the figures nosedived from 2001 to 2003,positive growth was registered in 2004 when subscription of fixed linetelephones grew by 4.52 percent, with 6.53 million installed lines rolledout by PLDT and 1.5 million by Innove Communications Inc., a whollyowned subsidiary of Globe Telecoms Inc. (Bautista 2004).


Table 1. Telecom industry structure

2000 2001 2002 2003 2004

Local exchange carrier service 77 74 73 73 73

Inter-carrier carrier service 11 14 14 14 14

International gateway facility 11 11 11 11 11

Radio mobile

• Cellular mobile telephone

Subscriber 7a 7b 7c

• Public trunk repeater service 11 11 11 10

Radio paging service 11 11 11 8

Value-added service

With networks

• Coastal 12 12 12 13 18

• Broadband 19 19 19 19

Without networks 156 186 186 249 292Sources: National Telecommunications Commission Reports, NEDA, and other sources.a BayanTel and Digitel are not yet operationalb BayanTel and Digitel are not yet operationalc Only BayanTel is not yet operational

Table 2. Philippine telephone density index (1998-2003)

Year Installed lines Subscribed lines

(million) (percent)

1998 9.08 3.44

1999 9.12 3.87

2000 9.05 4.01

2001 8.88 4.26

2002 8.70 4.17

2003 8.09 4.07

2004 8.03 4.52

Source: NTC 2002-2004 Annual Reports.


The DOTC released in December 1992 Department Order 92-269,formally opening the mobile phone industry to new market players.Afterward, the most influential business groups started to occupy the entiresector. New competing telcos realized they have no chance in competingagainst PLDT in the landline market, thus they went into newer marketsincluding the cellular phone business. A PLDT subsidiary, the PilipinoTelephone Company (Piltel), was the first company to be granted authorityto deliver cellular mobile telephone service in 1991. ExpressTelecommunications Co. (Extelcom) also launched its service in the sameyear. Three years later, Smart Communications (Smart), IslaCommunications Inc., and Globe Telecoms joined the competition.

Since 2000, cellular and mobile telecommunication services (CMTS)have been exhibiting phenomenal growth (table 3). A total of 2.85 millionmobile subscriptions were registered in 1999, which increased by 126percent in 2000. The entry of SunCellular, the GSM brand of Gokongwei-owned Digital Telecommunications Philippines, Inc. (Digitel), in March2003 further increased the number of subscribers. In the same year, therewere already 22.5 million mobile phone subscribers under the six majorCMTS players. Mobile phone subscription grew to 33.40 million in 2004,a 48.54 percent increase from the 2003 figure (Bautista 2004). It waspredicted that before year 2005 ends, half of the 84 million Filipinos willhave access to cell phones. This is because although 55 percent of the totalcities and municipalities have fixed-line services, people still choose to utilizemobile phones due to its affordability.3 There was a maximum utilizationof short messages service (SMS) or “texting” in many parts of the country.The mobile company Sony-Ericsson even dubbed the Philippines as thetexting capital of the world because of the 175 million average number oftext messages being sent by 33 million Filipinos daily. Not surprisingly,the country’s two largest mobile phone companies have benefited immenselyfrom the popularity of texting. In 2002, Globe Telecoms registered a netincome 59 percent higher than that of the previous year, while the netincome of Smart Communications, a unit of PLDT, skyrocketed by 51percent in the first nine months of the same year.


Table 3. Mobile phone subscription (1992-2004)

Year Subscription Percent increase

1992 56,004

1993 102, 400 83.00

1994 171, 903 68.00

1995 493, 862 187.00

1996 959,024 94.00

1997 1343,620 40.00

1998 1,733,652 29.00

1999 2,849,880 64.30

2000 6,454,359 126.00

2001 12,159,163 88.80

2002 15,383,001 26.50

2003 22,509,560 46.33

2004 33,400,000 48.54

Source: National Telecommunications Commission 2002-2005.Annual Reports.

Institutional Framework

The Department of Transportation and Communications (DOTC)used to be the sole executive agency tasked to formulate, plan, program,coordinate, implement, regulate, and administer the country’stelecommunication policies. Until recently, Executive Order (EO) 269,issued by President Macapagal Arroyo in January 2004, established theCommission on Information and Communication Technology (CICT)which functions as the primary ICT policy, planning, coordinating,implementing, regulating, and administrative entity of the executive.4 TheNEDA assists the CICT by providing assessment and policy guidance oninfrastructure development in the ICT sector.

The DOTC has two attached agencies: the Telecommunications Office(Telof ) and National Telecommunications Commission (NTC). On one


hand, the Telof is one of the four sectoral offices of the DOTC tasked toprovide basic communication services in almost all the localities in thecountry. It was called the Bureau of Telecommunications when it wasestablished under EO 94 approved in 1947. Its name was changed toTelecommunications Office when EO 125 called for the comprehensivereorganization of the government in 1987.

On the other hand, the NTC is a quasi-judicial office that acts as theregulatory arm of the DOTC and was authorized to be the principal overseerof the provisions of RA 7925 or the Philippine Telecommunications Actof 1995. The NTC was created in 1979 pursuant to President Marcos’sEO 546. It was later attached to the DOTC in 1987. The NTC is mandatedto regulate the entry of qualified service providers and to adopt a pricingpolicy that would generate sufficient returns. It establishes rates and tariffsthat provide for the economic viability of telecom entities and a fair returnon their investment, considering the prevailing cost of capital in thedomestic and international markets. In principle, the NTC does notinterfere as far as market and pricing issues among telecom players areconcerned. The commission allows them, on their own initiative, tonegotiate and enter into interconnection agreement subject to technical,commercial, and operational rules (Heceta 2004). In cases of refusal tonegotiate or failed negotiation, the commission, upon the complaint ofany interested party or upon its own initiative, intervenes and assumesjurisdiction and sets the terms and conditions it may find appropriate forthe case. In case of mediation, the NTC, on its own initiative at any stageof negotiation, can intervene and mediate between parties. Any agreementreached by parties should be submitted to the commission for approvalwithin ten days from the execution of the agreement. Insofar as its quasi-judicial functions were concerned, the orders and decisions of the NTCwere final, except when appealed to the Supreme Court of the Philippines.

Legal Framework

Understanding the failure of the government to demonopolize theindustry during the pre-liberalization period must be anchored on the


story of the seventy-year reign of the Philippine Long Distance TelephoneCompany. The company was nurtured and pampered by twoadministrations.5 Marcos’s protectionist regime stalled the necessary policiesto revitalize the telecom sector. It is widely known that Marcos and hisassociates benefited immensely from the ownership and control of someof the country’s telecommunication companies including PLDT. Duringthe Martial Law years, presidential decrees and other executive issuancesconsciously groomed the PLDT to be a natural monopoly. It operated ina market of limited competition, leading to telephone shortage and higherservice rates (Hudson 1997). The company had the first pick of profitableservice areas and cities while smaller operators, mostly members of thePhilippine Association of Private Telephone Companies (PAPTELCO),were relegated to service less profitable areas (Obien 1998, 40). To furthereliminate competition, PLDT acquired the smaller players including thesecond-largest telephone provider, Republic Telephone Co. (Retelco), whichwas ordered to merge with the firm in 1981. To raise the equity of PLDT,Marcos signed the institution of PLDT’s subscriber investment plan whereall PLDT clients buy preferred shares in the company so that they cantheoretically become owners. At present, subscribers’ shares still comprise75 percent of the company but voting rights are only reserved to the 25percent shareholders. The NTC further enhanced PLDT’s dominance byissuing Ministry Circular 82-046 providing for the single, integratednational backbone for voice, telegraph, telex, and data transmission, all ofwhich were installed by PLDT (Coronel 1998). The Government TelephoneService (GTS), which had its own national backbone, was integrated tothe trunklines of PLDT.

The revolutionary government of Corazon Aquino (1987-1992) starteda new wave of telecom reforms. Aquino was politically bound to resolvethe telephone crisis because majority of landline phone applicants belongto the class which brought her to power—urban, middle-class professionalsand businesspersons (Kim 2003,120). In 1987, the DOTC releasedMemorandum Circular 87-188 to guide the telecommunicationsdevelopment in the 1990s. A year later, Presidential Memorandum Order


163 created the National Telecommunications Development Committee(NTDC), a joint state-industry committee composed of top-level decisionmakers, chaired by the secretary of the DOTC. The NTDC was chargedwith the development of strategies for rationalizing the fragmented industrystructure. This was followed by the signing of the Municipal TelephoneAct of 1989, requiring installation of public calling stations in allmunicipalities, especially in rural areas. It provides for the installation,operation, and maintenance of public telephones in each and everymunicipality in the Philippines with the “Telepono sa Barangay” (Telephonefor the Barrio) as its flagship program. The Act was amended and upgradedin 2000 by establishing the Municipal Telephone Projects Office underthe DOTC. In 1990, the DOTC issued the National TelecommunicationsDevelopment Plan (NTDP) as the agency’s overall blueprint and policiesfor the communications sector through the year 2010. The NTDP isapparently on hold because the DOTC is waiting for the resolution of theCongress on the proposal to create a Department of Information andCommunication Technology (DICT).

The Aquino administration did not vigorously push for the industry’sdemonopolization for obvious reasons. Then PLDT President Antonio“Tony Boy” Cojuangco was the president’s first cousin. PLDT was amongthe first companies sequestered by the Philippine Commission on GoodGovernment (PCGG), a commission established to probe Marcos’s ill-gotten wealth. Just weeks later, PCGG lifted the sequestration order.PLDT’s political and economic clout made it difficult for new marketplayers to secure a legislative franchise. Many of them who were denied alicense have either opted to buy stocks of major telcos or form mergers.Although the liberalization process commenced in 1987, it was only in1989 that new licenses were granted to international gateway facilities(IGFs), cellular mobile telephone system providers (CMTS), paging, cableTV, and other telecom services.

At present, dominant players still obstruct the entry of other players.The Aquino government failed to discipline PLDT on various occasions.During the term of Commissioner Jose Alcuaz, the NTC compelled the


company to interconnect with cellular phone provider ExpressTelecommunications Co. (Extelcom). It not only disregarded theinterconnection order but also questioned in the Supreme Court the validityof the Extelcom franchise. When the decision came out in favor of Extelcom,PLDT simply bought into the company. In another case, when Digitelwon the bid to operate the government telephone system in Luzon inSeptember 1991, PLDT attempted to block its operations by preventingDigitel from leasing its phone networks (Coronel 1998, 130). In anotherincident, major telcos opposed the entry of Connectivity UnlimitedResources Inc. (CURE) and Multimedia Telephone Inc. to be a CMTSplayer and maintain a 3G digital network (Today, March 29, 2004) althoughthe House of Representatives earlier approved CURE’s legislative franchise.

Major policy breakthroughs transpired during the term of PresidentRamos (1993-1998). Consistent with his “Philippines 2000” agenda,Ramos accelerated the liberalization thrust through his landmark executiveissuances. The president signed two unprecedented executive orders thatdrastically transformed the landscape of the industry: EO 59 issued onFebruary 24, 1993, calling for the compulsory interconnection ofauthorized public telecommunications carriers, and EO 109 issued on July12, 1993, which outlines a policy designed to improve local exchange carrierservice to be accomplished through the Service Area Scheme (SAS). EO109 compelled CMTS operators to install 400,000 telephone lines in threeyears and 300,000 lines for IGF operators within five years. EO 109introduced the Service Area Scheme and the three-year Basic TelephoneProgram (BTP) which ended in June 1998. Through the SAS, the countrywas divided into eleven geographic areas, where CMTS operators arerequired to operate both in served and underserved areas. Eight carrierswere authorized to operate in these areas while IGF operators were alsomandated to install a rural exchange line for every ten urban local exchangelines. PLDT was not required to install new lines. Bayantel, Digitel, GlobeTelecom and Smart satisfied the rollout requirements while Piltel, Islacom,PT&T/CAPWIRE, and ETPI failed to meet their target lines. Severalreasons were raised, including the peace and order problems and poor


business environment in assigned areas. As of year 2000, six operators—Digitel, Globe, Bayantel, PLDT, Smart, and Piltel met the required numberof local lines and rural deployment but were deficient in covering therequired areas. To further prove that the government was serious in itsdemonopolization project, Ramos gave majority of seats of PLDT’s Boardof Directors to government officials, appointing six of its eleven boardmembers (Cabanda 2002). When PLDT felt that the entry of new marketplayers was inevitable, it embarked on a nationwide installation of landlinephones through its Operation Zero-Backlog program (Smith 1995).

Ramos’s EO 59 and EO 109 were not without flaws. While the SASattracted investments, the government failed to set realistic terms for thetelecom players. EO 109 forced the new carriers to allocate half of theirinvestment in areas where there are unpredictable returns. Installing landlinefacilities in rural areas did not become an efficient enterprise due to lack ofmarket. Often, the government is the one that spends people’s taxes toinstall operational lines. To make matters worse, the proactive involvementof the DOTC as an operator in unprofitable areas gave industry playersthe notion that they were not obligated to provide service in such areas.New players also had difficulty complying with SAS due to the huge fundingrequirement and the short period of completion. Half of the new carrierswere not able to meet their obligations. The target of 87 percent coverageby 1998 was not met. As of December 2000, only 2.8 million of the total6.8 million available lines have been subscribed, which stood at 4.26 millionin 2001. In 2001-2003, total subscribed lines still stood at 50 percent ofthe total lines installed. The number of subscribed lines in December 2002was 3.310 million, a drop from the previous year’s 3.315 million.Distribution of the facility was ill-managed with overprovisioninghappening in urban areas. Telecom services are concentrated in the NationalCapital Region (NCR) and the urban centers of Region 4, comprising 65percent of all phone lines installed from 2001 to 2003 (NEDA 2001). Torectify the shortcoming of SAS, the DOTC is currently intensifying itsefforts to set up Community e-Telecenters to areas where people cannotafford to subscribe for a telephone line.


On February 20, 1995, President Ramos enacted Republic Act 7925,the Public Telecommunications Policy Act of the Philippines (supportedby NTC Memorandum Circular 8-9-95 as IRR), to further liberalize theindustry. The Act, however, appeared to be a countermeasure against theRamos administration’s preliminary initiatives. It contains provisions thatundermine the reforms initiated by EO 59 and EO 109. The reduction of“rollout” period to three years from the original five years made it moredifficult for the new players to raise capital and meet their commitments.RA 7925 also mandates for the principle of mutual agreement about theinterconnection and tariff rates among the concerned parties. This reducedthe role of NTC as a market regulator. This provision means that the ninecompanies installing landlines in eleven service areas would have to forgeagreements with the other eight, with state intervention as a last resort. Itwas later confirmed that the presence of more players did not ensure theattainment of universal access due to interconnection disputes betweenand among telecom carriers. PLDT has been accused, time and again, ofdeliberately delaying interconnection. The common trend was thatnondominant carriers were compelled to interconnect with the dominantcarrier owing to the latter’s wide base of subscribers. The dominant carrierwas not always willing to interconnect unless its conditions are met. Themantra of the major telcos is that small carriers tend to “piggyback” on itsfacilities and wider network.

State and Civil-Society ActorsState and Civil-Society ActorsState and Civil-Society ActorsState and Civil-Society ActorsState and Civil-Society Actors

Globalization engenders new challenges that could impinge on thenormal functioning of states. Some scholars even claimed their “end and/or retreat” mainly because they have lost their role as a fiscalizer and regulatorof the market (Ohmae 1994; Strange 1996). This study takes the contraryposition by viewing the state as a significant actor in a liberalized market.For one, the entry of more telecom players elicits a more widespreadinvolvement of states to monitor and resolve market issues. State regulationis imperative during a transition from a monopolistic market into acompetitive one. The great challenge, however, is how to put in place


adequate regulatory framework that will ensure industry growth as well asprotect consumer welfare (Aldaba 2000; Lee 2002, 1). The state’s domesticcapability is a good yardstick to determine its strength or weakness. Astrong state can “penetrate society, regulate social relationships, extractresources, and appropriate or use resources in determined ways” (Migdal1987). It can insulate itself from external forces that may affect theimplementation of coherent and effective policies. The character of theregulatory agency that exists has a major influence on the state-civil societyrelations. The succeeding discussions describe the strengths and limitationsof the NTC in managing the market and how these shape the interactionof industry actors.

The Weak (Regulatory) State

The NTC as a regulatory body suffers from a split character. On onehand, it exhibits a proactive role in resolving market issues. On the otherhand, it falls short of its expected role as a regulator. The NTC’s strengthcan be seen in its effort to implement measures to combat mobile textfrauds,6 which according to the Anti-Money Laundering task force, haveripped about PHP 5 million from the victims in 2003 (Today, April 16,2004). In October 2004, NTC instructed all mobile phone service centersengaged in the repair, servicing, or maintenance of mobile phone units toregister their businesses and acquire a permit from the office (MC 08-08-2004A). This is to control the proliferation of illegal repair shops wherecloning of SIM cards and altering of fifteen-digit International MobileEquipment Identifiers (IMEI) of mobile phones are being performed. Dueto numerous complaints, the NTC released a memorandum on March16, 2005, regulating unsolicited commercial text messages (Today, January19, 2005). It mandates that “commercial and promotional advertisementsand other broadcast or push messages shall be sent only to subscribers whohave prior consent or have specifically opted-in to receive said messages.”

The government desires to sustain growth by creating a competitive,private-sector-driven telecom industry. Although the NTC was vested byRA 7925 with broad regulatory powers— facilitate the entry of qualified


service providers; assure the quality, safety, reliability, security, compatibility,and interoperability of telecom facilities and services; mandate a fair andreasonable interconnection of services; protect other telecom entities andthe public from unfair trade practices; promote consumer welfare; manageradio and television broadcasting, particularly licensing and spectrumusage—they were counterbalanced by the agency’s four major limitations.These handicaps are laid down in a consultative document released by thecommission on December 16, 2005 (NTC 2005, 22-27). These constraintsconcern meager resources, legacy of past lapses, limited regulatory powers,and asymmetry of information between the NTC and the regulatees. First,the NTC executives reasoned out that regulatory oversight requires aconsiderable number of professional staff, modern equipment, and adequateinformation database which the NTC has yet to achieve. The commissionsolely depends on the annual appropriations approved by the Congress.

The performance of the agency has been hampered by past regulatorylapses and policy flaws. The Consultative Paper admits that “[i]n the past,the Commission has taken a mediatory stance on most issues brought toits attention. Some stakeholders have viewed such response as inadequatefrom a regulator whom they expect to check against abuses of market power”(NTC 2005, 23). The NTC must be fashioned as an effective and genuinelyindependent regulatory body. It remained practically “toothless” allthroughout the Marcos and Aquino years (Coronel 1998, 124-25). Itcontinues to be affected by partisan politics. At present, the term ofappointment of commissioners depends on the confidence of the presidentof the country. The Congress can also determine its annual budgetappropriations (Esfahani 1994). Influence-peddling and rent-seekingactivities become a serious problem especially in securing a legislativefranchise. In fact, the country has been falling short of the WTOrequirements as written in its Telecommunications Regulatory ReferencePaper. The document calls for transparency of the franchising process bysetting a maximum time required to reach a decision (sections 2.1 and2.2) and providing information on the process to the public (sections 2.3and 2.4). Although the Arroyo administration’s Medium-Term Philippine


Development Plan (MTPDP) for 2004-2010 calls for the fixing of theterm of commission members to “insulate them from political and otheroutside pressures” (NEDA 2004, 21), there are still no measuresimplemented toward this goal.

Previous issuances and statutory powers of the NTC are now seen aslimited and outdated in the face of the advancement of information andcommunication technologies (ICTs) and recent industry developments.The lack of technology-specific rules often frustrates the government’s desireto promote competition and level the playing field. The narrow andprescriptive policies that guide the industry must be reviewed to cope withthe advancement in ICTs (i.e., VoIP, Wi-Fi/Max) and adapt to currentmarket realities. Often, the agency’s “wait-and-see” disposition in resolvingmarket conflicts can be ascribed to the lack of implementing guidelinesand policies. What was considered as a value-added service (VAS)7 fifteenyears ago is now considered either as a basic telecommunication service ora dead technology (i.e., pagers). One big step to this end is to amend RA7925 and review the National Telecommunications Development Plan(NTDP) that DOTC created in 1990 for them to provide a fresh visionfor the industry. Drafting a regulatory framework for ICT-enabled industriescould resolve the current technological dilemmas. At present, there is nogovernment agency that regulates the Internet, particularly its contents(e.g., pornography, gambling, sale of illegal firearms and drugs, and terroristactivities). As such, President Arroyo’s issuance of EO 269 creating theCommission on Information and Communication Technology is a gooddevelopment. Another obstacle concerns NTC’s lack of pertinentinformation on the operations of the industry players. The dependence ofthe agency mostly on the information being supplied by the regulateesbrings serious issues because not all of them comply with reportorialobligations. At present, the agency does not have a database system ofindustry trends and reports that would facilitate decision making.

The operation of the Web-based texting-service company Chikka AsiaInc. was questioned by the NTC because of its provision of cheaper textingservices for the public. The company’s website, www.chikka.com, has


become popular among mobile phone subscribers who have access topersonal computers. Chikka offers computer software that can bedownloaded from its website. This can enable a mobile phone subscriberto send text messages from the Web for free instead of paying the usualPHP 1.00. However, a PHP 2.50 charge will be deducted from the mobilephone credits of the person who “text back” through the chikka network.The NTC released a memorandum on February 9, 2005, stating that thecompany has been illegally operating as a VAS provider because of itsfailure to register with the agency since its operations in 2002 (Bautista2005). The commission, however, cannot provide sanctions to the operatorsof the website because RA 7925 does not provide sanctions for VASviolators. If a company does not register as VAS provider, the NTC cannotrun after the business entity directly, but only indirectly by ordering thePublic Telecommunication Entities (PTEs) to assist the agency in haltingthe company’s financial collection (Disini 2005). To discipline a VASprovider violator, the NTC can only order the telcos to stop chargingsubscribers who receive messages from Chikka. It still needs to coordinatewith the concerned PTEs to enforce its regulatory powers.

To achieve viable competition, the NTC must ensure that other smallplayers must also have a good share of the market. Market competitionproblems could be minimized if Congress could come up with generalmarket competition laws (e.g., anti-trust laws) that will provide clear rulesfor the industry and establish a competition oversight office. Althoughseveral RA 7925 provisions and executive orders were passed calling forthe compulsory interconnection among telcos, they were not entirelyimplemented due to the NTC’s oversight and lack of guidelines (Fajardo1999, 3).8 Assuming a proactive regulatory stance on competition issues isimperative in this regard. Although the NTC can compel the two networksto restore linkup, there were no specific rules and sanctions on the unilateralmoves of some carriers to disconnect other players from their networks.Deadlock in negotiations or noncompliance would constrain the NTC totake appropriate actions. One interconnection crisis took its toll in 1999when Globe Telecom’s 850,000 subscribers were not able to connect to the


1.7 million fixed lines of PLDT, and vice versa. The dispute was highlightedby the unilateral move by BayanTel to cut off 200,000 of its subscribersfrom Smart. This was followed by the disconnection of Globe Handyphonesubscribers from PLDT networks. PLDT argued that it was due tocomputer glitch while Globe ascribed the incident to sabotage. Islacomalso complained of its interconnection problems with the IGFs of PLDTdespite the former’s repeated requests for linkup. President Joseph Estradaneeded to summon the telco executives in November 16, 1999, to anemergency meeting to resolve the interconnection mess.

Status of the Civil Society

This paper takes a non-statist “inclusionary” view of civil society as a“public sphere where autonomous groups and individuals interact witheach other on matters of collective concern” (Ferrer 1997, 13). This paperhas identified major civil society organizations that have been engagingthe state concerning industry issues (table 4).

Apparently, mass-based civil-society groups can be described asspontaneous, temporary, and exhibiting power only during certain periods(Kim 2003,122). They merely provide a backdrop of the political processbetween the political and business interest groups. When RA 7925 wasbeing deliberated in Congress, no social movement organized against theAct’s contentious provisions. It needed the initiative of the Ramosadministration for the social sector to be mobilized, mainly to providelegitimate support for the state’s liberalization agenda (Coronel 1998).9

Since telecommunications issues are nontraditional areas of engagement,there is a dearth of social movements active in the industry.

Philippine League for Democratic Telecommunications (PLDTi)President Jonathan Domingo explained that the weak social movement isa function of the nature of issues emerging and being discussed in thesector. Telecom concerns have not been priorities of ordinary Filipinossince there are more basic and immediate issues that they have to deal with(e.g., food, shelter). Telecommunication services are perceived as meansand not an end. Further, matters concerning telephone pricing, Internet,


Wi-Fi, and online privacy are considered highly technical matters thatordinary people cannot easily appreciate. Sensitive social and political issuesare often the ones that reach the congressional halls, press rooms, and theattention of the public. The mobile phone text-tax issue reached its heightbecause texting has been increasingly regarded as a basic necessity amongordinary Filipinos, especially in the National Capital Region.

The expected prime mover and forerunner of CSOs in the industry—the consumer movement—is either lethargic or nonexistent. History issummoned to show that there are no strong and sustainable consumergroups in the country. Emerging organizations have been sector- andproduct-specific, which could best explain the fragmented nature of massactions. The issue of increasing oil prices should have been a concern byordinary consumers, but transportation groups and labor unions have been

Table 4. Civil-society groups in the telecommunications industry

Type of civil-cociety group

Consumer advocacy groups

Research advocacy organization

Business groups/stakeholders

Organization

1. Philippine League for Democratic

Telecommunications, Inc. (PLDTi)

2. TxtPower

Foundation for Media Alternatives (FMA)

1. Philippine Association of Private

Telecommunications Companies (PAPTELCO)

2. Philippine Cable Television Association (PCTA)

3. Philippine Chamber of Telecommunication

Operators Inc. (PCTO)

4. Philippine Electronics and Telecommunications

Federation (PETEF)

5. Philippine Internet Services Organization (PISO)

6. Telecommunications Users’ Group of the

Philippines (TUGP)


the ones that seize the issue by default. Further, consumer groupsdisintegrate whenever companies pay off and/or pacify erring complainants.Rep. Gilbert Remulla (second district, Cavite) (2004) perceives thedeficiency in consumer groups as unfavorable to any legislation that aimsto protect telecom consumers. In the Thirteenth Congress, he filed HouseBill 2452, entitled “Truth in Mobile Telephone Billing Act,” requiring thesix-pulse rate and billing per-second breakdown of the call usage of mobilephone subscribers seven days after the expiration or consumption of theirprepaid cards. In August 24, 2004, a press conference on the proposal wascovered by the broadcast media but it was not recognized in the printmedia. Remulla attributed the incident to the economic influence of telcos,which he described as the largest advertising customers of broadsheets andtabloids. Another problem is the absence of a critical mass that could rallybehind his proposal. He asserted, “There are no big consumer groups andyou don’t see them massing on the street rallying. You can only see them inthe media saying to boycott for one day and that’s all.”

The Philippine League for Democratic Telecommunications Inc. is aconsumer advocacy group that emerged as a response to the PLDT meteringproposal and rate balancing in early 1999. PLDTi vehemently opposedthe measure and argued that telephone metering should be merely optional,alongside the current flat-rate system, if ever it is to be allowed. Todemonopolize the industry, the organization once proposed that thegovernment must consider breaking the PLDT into its component servicesas well as into several regional companies, just like what the US did withthe AT&T. Dividing the industry behemoth could provide a level playingfield to all market players. When the metering issue subsided, PLDTicontinued its function as an industry watchdog. The organization, alongwith four other individuals, filed a case in 2001 against the telcos concerningthe reduction of free texts in prepaid cards. Although a Quezon CityRegional Trial Court judge dismissed the complaint on September 14,2001, saying that it has no jurisdiction over the case, the drastic text-reduction plan failed. The NTC earlier said that text is a value-added service,hence deregulated.


The Foundation for Media Alternatives (FMA), a research-basedorganization, contributes to the development of scholarship on ICTfor development in the country. As the sole research organization inthe country focusing on ICT issues, FMA concentrates “on continuoustheorizing and paradigm-building in relation to issues and concernssurrounding the emerging Information Society, by systematicallygathering data for public dissemination and for the use of other ICTfor development stakeholders”. FMA finished in 2003 a baseline surveyon ICT use of the country’s nongovernment organizations. As anadvocacy group, FMA actively participates in national and internationalICT policy development processes. It represents the civil society sectorin the Commission on Information and Communication Technology.The organization takes a lead role in representing the network of Asiancivil society organizations to the World Summit on the InformationSociety (WSIS) held in Geneva in 2003 and Tunis in 2005.

Supplementing the lack and inactivity of civil society organizations inthe sector, private business organizations (PBOs) and associations fill inthe gap. They actively interact with the government in matters directlyaffecting the industry. Market players often voice their concerns as part ofa bigger organization and/or coalition. Since the Marcos administration,PBOs have been considered as valuable partners and stakeholders to thecountry’s overall development (Tigno 2004, 44). They are dynamic actorsof civil society, although there is lingering doubt on the level of their socialconsciousness. The typical view is that they have been unaccountable,exploitative, socially irresponsible, mainly driven by profit, and are aliento prevailing social realities (de Castro 1997, 221-42). These qualitiescontradict the major purposes of civil society organizations—to promotepublic good and benefit the society in which they function (Milner 2001,30; O’Connel 2000, 471-78). Sectoral business organizations, nonetheless,can give voice to their constituents. They can serve as political brokers thatcan influence state policies in the public interest (Fukuyama 1995, 1; Shills1991, 3).


State-Civil Society Interaction: Case StudiesState-Civil Society Interaction: Case StudiesState-Civil Society Interaction: Case StudiesState-Civil Society Interaction: Case StudiesState-Civil Society Interaction: Case Studies

In a liberalized industry, the state must ensure that free-marketprinciples work properly and protect the public from any arbitrary behaviorof industry actors. Unfortunately, neither state institutions nor marketforces can guarantee that it can uphold public interests. This is the reasonsocial and business sector groups emerge to serve as countervailing forcesagainst the excesses of the state and the abuses of other market players. Thefollowing are empirical descriptions of the strategies of civil-society groupsin engaging the state and the outcomes of the process. Outcomes aremeasured in terms of the state’s response to civil society’s demands andagenda. Two groups are selected as case studies: TxtPower on its crusade toprotect the welfare of mobile phone subscribers and the Philippine InternetServices Organization on its struggle for a deregulated VoIP that will offeran alternative and cheaper telephone voice service for the public.

Txtpower and Mobile Phone Issues

TxtPower is one of the organizations that actively participated intoppling the Estrada administration during the EDSA 2 Revolution. It isa loose organization of different progressive organizations, mostly led byyouth leaders and middle-class professionals. The group was founded onAugust 27, 2001, when Smart and Globe abruptly reduced their free-textallocations for prepaid subscribers without due consultation with theconsuming public. The group believes that Short Message System (SMS)should be considered as a built-in feature of cellular phones thus shouldnot be charged with extra costs (TxtPower 2004b). The group’s actionsachieved partial success after delaying the plan of Smart and Globe toreduce free text. Globe continues to provide a minimum of thirty-five textmessages for every PHP 300 prepaid load while Smart cut down its freetext by 33 percent.

As of January 2006, the active convenors of the organization includeAnthony Ian Cruz, a net-activist; Giovanni Tapang, chairperson of thescientists’ group Agham (Advocates of Science and Technology for thePeople), and a physics professor at the University of the Philippines;


Raymond Palatino, vice president of the Anak ng Bayan Youth Party; EmilCinco, leading member of the Computer Professionals Union (CPU); TrixieConcepcion, Philippine coordinator of the Earth Island Institute andAgham secretary-general; Gerry Kaimo, net-activist and webmaster ofPLDT.com; Atom Araullo, media personality and student leader; andEderic Eder, editor of youth e-zine Tinig.com. Past convenors include UPprofessors Tonchi Tinio and Roland Tolentino, triathlete Sandra Araullo,campus journalists Len Olea and Rey Asis, and visual artist Emil Mercado.TxtPower considers itself as the first consumer group that represented thecause of mobile phone users. Affiliated groups include Agham, Gabriela,Anak ng Bayan, Computer Professionals Union (CPU), Migrante, CollegeEditors Guild of the Philippines (CEGP), National Union of Students ofthe Philippines (NUSP), Bagong Alyansang Makabayan, among others.

When President Arroyo signified her intention to impose taxes on textmessaging in her 2004 State of the Nation Address (SONA), TxtPowerimmediately responded by holding a media event titled “P1 Billion FunRun” on August 1, 2004, at the controversial President Diosdado MacapagalAvenue10 as a symbolic act of protest against text tax and governmentcorruption. The campaign was supported by Overseas Filipino Workers’Laban sa TextTax (OFWLaST), arguing that the tax on text messages willcertainly have adverse social effects on them. Many OFWs have been usingSMS to get in touch with their children, husbands, wives, and relatives inthe country. A week after, a text protest barrage was performed calling forall text users to relay the following message after receiving:

Txtrs, REVOLT! B part of history, join 2day’s cyber-rally. Snd NO 2 TXT-TAX 2 d ofc of speakr JdV 0917-8101226! Join TxtPower piket @ 2pmoutsyd congrs. Pls pas. (Texters, Revolt! Be part of history. Join today’s cyber-rally. Send NO to Text Tax to the office of Speaker JDV [Jose De Venecia],0917-8101226! Join TxtPower picket at 2 p.m. outside Congress. Pleasepass.)

Afterward, House Speaker Jose de Venecia issued a statement that hewill oppose any kind of tax on text (Albano 2004). President Arroyo


affirmed the speaker’s position when she released a statement supportingTxtPower’s call to junk text cuts and review the telecom deregulation policy.

TxtPower enlisted the support of House party list Bayan Muna,particularly Rep. Teodoro Casiño who also leads the Alliance of Legislatorsagainst Regressive Taxes (ALERT), an association of legislators aimed tostall and destroy plans by the government to impose anti-people regressivetaxes. On October 24, 2004, twenty-seven House of Representativesmembers, mainly from the opposition, signed a resolution filed by SorsogonRep. Francis Escudero expressing their collective stance that “there shallnot be a tax measure, bill or enactment that shall be submitted or passed thatwill impose the tax on Short Message System (SMS) or ‘text messaging’ duringregular or special sessions of the 13th Congress.” On May 24, 2005,TxtPower convenors spoke with legislators and submitted to the HouseCommittee on Information and Communication Technology its positionpaper on House Bills (HB) 717, 1485, 2452, 2654, 3407, and 3475, all ofwhich deal with the protection of the rights of mobile phone subscribers.

The Arroyo administration’s alternative proposal to tax the windfallprofits of telcos (franchise taxes) was perceived by TxtPower as another“creative way” of Malacañang to increase the cost of mobile communications(TxtPower 2004a). On March 16, 2005, the group launched the so-calledSecond Texters Revolt, a campaign against the VAT law in general and thetelcos franchise tax in particular. All texters were encouraged to at leastbombard Senator Franklin Drilon’s number with the following message:Pls stop d vat r8 hike. We r watching u n we wil not 4get! Texters n peopler now in revolt! (Please stop the VAT rate hike. We are watching you andwe will not forget! Texters and people are now in revolt!) A “one-minuteringtone protest barrage” was launched during the rallies at Mendiola Bridgeand the Senate grounds.

Representative Casiño argued that the proposed franchise tax asembodied in HB 1469 authored by Rep. Eric Singson and HB 1560 byRep. Danilo Suarez, as well as the DOF’s own proposal for an excise tax, isworse than the original text tax proposal because it covers not only textingbut voice calls, multimedia messages, WAP, GPRS, internet services,


landline calls, even radio and television broadcasting. This will be eventuallypassed on to all kinds of services provided by telecommunicationscompanies (Casiño 2004). Major telcos favored more the imposition ofan expanded value-added tax and not a franchise tax or text tax (Reyes2004).11 After a close-door meeting with telco executives, President Arroyowas convinced not to impose the franchise tax. Malacañang instead push aVAT system on telecom providers that will be raised from current 10 percentto between 12 and 14 percent (Cabacungan and Pablo 2004).

TxtPower confronted other burning concerns. It initiated debates andmass actions on the issues of 1) drop calls (i.e., some subscribers beingcharged with calls they were not able to make), 2) the limited periodimposed by telcos for the use of prepaid load credits (i.e., Smart and Globeprepaid credits must be consumed three months starting the day it isloaded), and the 3) subscriber identity modules (SIM) card listing proposalof Rep. Joseph Santiago (National People’s Coalition–Catanduanes) duringthe Twelfth Congress. While the SIM card listing proposal was watereddown by the lawmakers when it was first deliberated in the HouseCommittee on Human Rights, judging the measure as impractical,unrealistic, and unachievable, the other issues are currently being deliberatedin the House Committees on Information and Communication Technologyand Trade and Industry.

The government provided several avenues to accommodate the group,but not all of them have been useful. Convenors were invited to committeehearings, formal dialogues with legislators, and government-sponsored forabut they had modest success in achieving their targets through these avenues.The group explained that agency executives offered delayed responses tothe recommendations they laid down, not to mention some policydigressions politicians commit in the actual policy drafting andimplementation. But as far as the convenors are concerned, the biggeststumbling block to their mission is the state’s refusal to recognize the rightsof consumers due to its flawed policies of deregulation, privatization, andliberalization. Hence, the organization sees itself as having virtually nopower, no recourse in the law. One of the convenors lamented that if they


would file a case against a government agency, they would not surely winit because the government has hands-off policy even on issues of consumerrights. More so, there are no institutional mechanisms to protect theconsumers. Any interaction with government will prove useless in theprocess. Overall, the organization calls for the repeal of the law deregulatingthe telecommunications industry, which it calls as anathema to people’swelfare.

The lack of resources and formal organizational hierarchy, althoughnot vital problems, still hampers the expansion of the organization.Problems arose when convenors have prior campaign schedules, makingthe all-present representation in mass action almost impossible. Nonetheless,TxtPower’s loose organizational setup is advantageous. It enables quickdecision-making, action, and consensus in the group. The broad andmultisectoral composition of the coalition facilitates the easy recognitionby the government of its presence and campaigns. Intra-organizationallinkages offer logistical assistance among members of the network, whichcome in the form of meeting venues, studies, focus group discussions, andlaunching of mass actions and campaigns. The group is looking forwardto wider memberships in the next few years. A wider and bigger networkcan make TxtPower’s operations more comprehensive and responsive tothe clamor of the mobile phone users even outside the National CapitalRegion. It has already established chapters in major cities of the countryand one in Hong Kong.

Public campaigns using text, Internet, and the broadcast media areconsidered the most effective means to contest state policies and solicitsupport from the public. The mass media was used to popularize the issueand inform the people of their communication rights. As people becamemore aware of the issue, they started to air their discontent with thegovernment’s lack of protection for consumers. Hence, protest rallies ofTxtPower against “text tax” received overwhelming support from mobilephone subscribers. In addition, the Internet is being maximized to propagatecampaign text messages through e-mails and e-groups within a relativelyshort period. The group is being technically supported by the Computer


Professionals Union and Agham in hosting its websites: http://txtpower.cp-union.org and www.txpower.org.

PISO and the VPISO and the VPISO and the VPISO and the VPISO and the VoIP QuestionoIP QuestionoIP QuestionoIP QuestionoIP Question

Recent developments in Internet technology have made Voice overInternet Protocol (VoIP) a promising alternative to more expensivetelephone calls. Simply put, VoIP is a technology that allows transmissionof data and voice using an Internet protocol without having to pass throughpart or all of the facilities of Public Telecommunication Entities. Aspecialized form of VoIP is called Internet telephony in which a regularvoice telephone call is transmitted via the public Internet, thus bypassingall or part of public switched telephone network (PSTN); hence the cheaperrates for its service. Many have discovered Skype, which offers downloadablesoftware from its website to make VoIP calls. All calls made through thewebsite are free, while those made by nonsubscribers can be as low as USD0.03 a minute. It can occur between computers, between a computer anda phone, and between phones (NTC 2004, 3-4). PLDT subsidiary NetvoiceOperations Manager Joseph Concio (2004) revealed that telcos have beenusing the technology since early 1990s. Long-distance calls by the companyare partly, if not entirely being done through the VoIP system.

The Internet service provider (ISP) Mosaic Communications(MosCom) president, William Torres (2004), explained that the historyof the VoIP issue commenced between 2000 and 2001 when US-basedVoIP providers started to charge fees for the formerly free technology.Developments in the US and other countries in classifying the VoIP havebeen monitored by the NTC. They coincided with the campaign of thenow-defunct Information Technology and Electronic Commerce Council(ITECC) to lower the cost of outgoing calls from the Philippines to UScities. It was initiated by then Trade and Industry Secretary Mar Roxaswho reinvigorated the call center industry in the National Capital Region.

In November 2003, the Department of Transportation andCommunications granted the telcos the exclusive right to offer VoIP servicesas provided by RA 7925. The Act classifies Internet service providers (ISPs)


as value-added-service providers. Hence, they must first seek a legislativefranchise from Congress (which is a law) and appropriate certification andpermits from the NTC before they can offer the VoIP technology. Theyshall be allowed to “competitively offer their services and/or expertise, andlease or rent telecommunications equipment and facilities necessary toprovide such specialized services, in the domestic and/or internationalmarket in accordance with network compatibility.” This was affirmed byNTC draft memorandum released in January 2004 stating that only “publictelecommunications entities (PTEs) may offer voice over internet protocol(VoIP) for compensation.” The draft, prepared during the term of NTCCommissioner Armi Jane Borje stirred up serious scrutiny and commentsespecially from VAS providers. Five months later, the memorandum wasdiscarded when the agency released a more comprehensive discussion paperon July 23, 2004, presenting the nature and scope of the VoIP technology.The first public hearing was held at the NTC office in November 2004,which was attended by representatives of major telcos, ISPs, and individualstakeholders. Noticeably, the meeting was filled by telcos’ legal expertswhile small consumer groups were not represented. Congressional hearingson the issue were started earlier in March 2005 in the House Committeeon Information Technology headed by Cebu Representative and formerNTC Commissioner Simeon Kintanar. Representative Clavel Martinezsubmitted to the committee HB 3476 entitled “The Philippine VoIP Actof 2005,” first read on December 15, 2004.

PISO vs. Telcos

The Philippine Internet Services Organization was established in 1996and comprised of Internet access providers and businesses engaged inInternet-related services such as web design, domain registration, andwireless and software development. The organization include BrochiereOnline, Compass Internet, Convergence Solutions (CSI), Easy CallPhilippines, Email Company (EMC), Evoserve, Imperium Technologies,Infocom Technologies, InfoBahn, MailStation, Mindgate Systems, VirtualAsia, WebLinq, WebPhilippines, Pacific Internet, Philippines Online


(Philonline), Weblink Philippines (WebPhil), Tridel technologies (I-Manila), Mosaic Communications (MozCom), and Philippine NetworkFoundation (PhNET). As posted on its website, the organization is “engagedin several advocacy initiatives to help promote the Internet services industryas well as play an active role in reshaping the local business and regulatoryenvironment from one that turns a blind eye on monopolistic and anti-competitive practices to one that encourages entrepreneurship, faircompetition, innovation and cooperation.” Due to industry reconfigurationand competition, membership decreased to twenty-one. Many of theoriginal members either merged with other ISPs or lost their market shareand went bankrupt.

PISO first gained the attention of industry players when it collidedwith PLDT in early 2000 concerning the increased pricing of E1R2 leasedlines by PLDT.12 The group saw the measure as the grand strategy of PLDTto increase the raw cost of ISPs and monopolize even the value-addedservices industry (Tabingo and Casiraya 2004). PLDT’s MyDSL servicewas originally priced at PHP 2,500 and can only be offered through thetelcos’ own brand or its affiliated ISP. However, ISPs cannot compete withthe pricing because their raw and resale value of the service is already atPHP 2,700. “PISO ISPs do not offer MyDSL because the terms are notgood. The system is designed [so] that we have become just a reseller,”PISO Director Jayson Yu (2004) said in an interview.

The group was also dismayed over the NTC’s ruling on the Wi-Fiissue. The group argued that the initiative to regulate the Industrial,Scientific and Medical (ISM) frequencies (e.g., 2.4 GHz and 5 GHz) goesagainst the International Telecommunications Union’s ruling that they are“unregulated frequencies” to be available for public and private use withoutthe need for government regulation and franchises. The Wi-Fi technologyshould be “practically free,” especially on hot-spots area (but regulatingthe maximum power of the base device), the local area network, and thecampus area network, which operate wireless technology.

On the issue of the VoIP, PISO maintained that it should be consideredas a value-added service and not as a normal telecommunication voice


service. There is consensus among ISPs and similar business groups thatpreventing the growth of the VoIP industry is detrimental to the publicwho should reap the benefits of emerging technologies. J.J. Disini (2005)of the UP College of Law wrote that any failure to deregulate the technologywould provide opportunities for foreign players to dominate the industry.Further, local business entities and players must be given an opportunityto use the technology in minimizing the costs of their operations.

Telcos were silent on the VoIP issue when it first surfaced in 2001.When ISPs started to assert their collective position, the telcos commencedtheir fight mostly by hurling legal arguments at the NTC and the VASproviders. Local telcos are understandably anxious that VoIP technologycould render their usual circuit-switching networks obsolete. PLDT, forinstance, has launched in early 2005 its PHP 10 unlimited calling (landlineto mobile phone and vice versa) to maximize the use of its switchingnetworks. Although majority of telcos support the classification of VoIP asa telecommunication service, they have variegated ways of justifying theargument. In a forum organized by the Telecommunication Users Groupof the Philippines (TUGP) on March 31, 2004, at Mandarin Hotel, MakatiCity, May Sto. Domingo, Philcom assitant vice president for businesssolutions, said that VoIP is already in itself an “opportunity to bring backwhat revenues are currently being lost by telcos because of the emergingtechnology.”

The Philippine Chamber of Telecommunication Operators Inc.(PCTO)—composed of BayanTel, Capwire, Digitel, Extelcom, Globetel,Innove, PAPTELCO, Piltel, PHILCOM, PLDT, SMART, and TTPI—contends that any process that relays and receives voice is atelecommunication service irrelevant of the means it is being transmitted.Although VoIP is a mix of voice and data technologies, the application isstill voice in nature. PLDT submitted a separate position paper sayingthat the VoIP has always been a telecommunication service, citing the1995 landmark case between PLDT and NTC–EasternTelecommunications Philippines Inc. Bell Telecoms supports this positionsaying that only telcos must be allowed to offer VoIP to the public. In a


statement made by Edgardo Reyes, chairman and CEO of the company,he explained that LEC services are still the most expensive part of telcos’operation; hence the need to first recover the investments of telcos in puttingup their facilities. This cannot happen when VAS providers and ISPs willcompete in the process. Eastern Telecoms offered a compromise. It statedthat operators should be allowed to offer VoIP to the public forcompensation, provided that they will only be agents or resellers of telcos’services.

Meanwhile, the Philippine Electronics and TelecommunicationsFederation (PETEF), an organization of industry suppliers, proposed aslow but sure approach. Government should create a transition programbefore implementing a full-blast policy on VoIP. PETEF particularlyrecommends the categorization of Internet data applications as eitherregulated or nonregulated. The group is cautious in endorsing the fullderegulation of the technology because it foresees that only the big telcoswill reap the benefits of liberalization. Likewise, ISP Global Reach ebusinessagrees to the statement that regulation will scare investment in VoIPbusiness. Any regulation, according to the company, “must be for thepurpose of effectively supporting the needs of the public and theconsumers.” Veering away from the debate, the Philippine Cable TelevisionAssociation (PCTA), an organization of companies serving 90 percent oflocal cable subscribers, stated that VoIP should be classified as a uniquetechnology. In a similar vein, the Telecommunications Users Group of thePhilippines (TUGP)—composed of big companies such as ABS-CBN,San Miguel Corporation, and major banks in the country—contends thetechnology should be treated neither as a traditional voice nor as a dataservice.

Under the leadership of Commissioner Ronald Solis, the NTC hasbeen projecting itself as a democratic institution that strives to provide atripartite solution which will be fair and just for the ISPs, telcos, and thelarger public. BayanTel’s VoIP Service Manager Theopatrick Ferrer (2004)shares this observation, saying that the current NTC leadership is moreresponsive to the concerns of telcos compared with previous


administrations. On March 30, 2005, the NTC released a draftmemorandum classifying VoIP as a VAS. It states that the VoIP is primarilyan enhanced telecommunication service provided by telcos (NTC 2004,4-6). After substantial consultations, the agency finally ruled out on August16, 2005, that VoIP is a value-added service. NTC Deputy CommissionerJorge Sarmiento asserted that VoIP was classified as a VAS in the spirit ofRA 7925. Sarmiento explained that the law has become outdated andmust be amended. The move was also premised on the fact that differentcountries have been pressuring the country’s technology executives to classifyVoIP as a VAS, the most prominent of which is the US-basedcommunications service giant AT&T Corp. Earlier, then-NEDA SecretaryRomulo Neri (2004) revealed that the push for a liberalized VoIP isintegrated in the “microeconomic thrusts” of the Arroyo administrations’Medium-Term Philippine Development Plan for 2004-2010. Manyindustry players, including PISO, have lauded the NTC’s rules, effectivelyfavoring the deregulation of the budding VoIP sector.


This paper presented an empirically-grounded analysis of state-civilsociety relations in the telecommunications industry. One prominentobservation is that liberalization has a direct impact on the way civil societyengages the state and the market actors. State’s weaknesses to effectivelycontrol the market pose serious challenges to CSOs. This means that theydo not only have to engage the government (to rectify its shortcomingsand failures) but also have to contend with industry players, which havemore resources and political clout. The weak force of mass-based civil-society groups can be gleaned from their inability to participate in importantfora and debates. With the lack of representation, state agencies obtainonly the opinions and demands of dominant market groups. This explainswhy the business sector groups influence more policy outcomes.

Both TxtPower and PISO utilized formal and informal means ofintervention. To some extent, their perception of the state determined thestrategies they utilized. Confrontation defined the relationship between


the state and TxtPower because of the latter’s negative perception of theformer as the protector of the interest of the dominant, elite class. TxtPowerrecognizes its limitation in influencing the government’s deregulationpolicies. In fact, it sees itself as virtually having no power in the context ofa deregulated telecommunications industry. Resorting to indirect, informalintervention like mass actions is deemed more effective in gaining politicalsupport. Political leaders are often enticed to support advocacies that evokewide public support. Street protests, petition signing, mass education infora and seminars, public consultation talks, media press conferences, andnetworking with legislators are essential in achieving this end. On theopposite, cooperation characterizes the interaction among the ISPs, telcos,and NTC officials in resolving the VoIP question. This can be attributedto the common goal of the government and industry stakeholders to endthe legal impasse that has hampered the development of the VoIPtechnology for more than a decade. Stakeholders, especially the telcos,actively participated in public consultations with the view of influencingthe NTC’s ruling on the issue.

Discerning the right venue of engagement is crucial in the success ofany campaign. TxtPower first organized the public for a concerted action.This was facilitated by forging alliances with various groups in differentsectors. Upon having the critical mass of supporters, TxtPower began tolobby politicians and policymakers in Congress. Simultaneous actions tomobilize the public through massive education and active engagement ofthe state provided more impetus for ongoing campaigns. In the samemanner, PISO constantly participated in public discussions and forainitiated by the NTC and industry organizations.

The two case studies have shown how internal and external resourcescould produce successful state-civil society engagement. PISO’s technicalknow-how helped justify the VAS nature of the VoIP technology anddebunk the legal arguments of the telcos. TxtPower, with the support ofthe Computer Professionals Union (CPU) and other like-mindedorganizations, maximized the use of the Internet to disseminate informationand expand the reach of its campaigns. TxtPower did not find it difficult


to organize campaigns because its coalition members already have theirown constituents to be mobilized. Both organizations maintain a widerange of membership where they can extract resources. Externalopportunities facilitate the effectiveness of the two groups especially inmaximizing state institutional openings for policy influence. The NTCunder Commissioner Solis has shown deep interest in democratizing thepolicy making process by holding numerous consultations on importantindustry concerns. TxtPower benefited from having political allies in theSenate and the House of Representatives. Attendant events provided forthe immediate response of the government. Malacañang was compelled topull out the plan to tax the SMS technology because it created significantpolitical pressure on the president. Support from the public was easilygained because of the widespread use of mobile phones. The prevailingnotion is that imposing a tax on what has already been considered as abasic necessity must be blocked. Similarly, the NTC took a proactive rolein resolving the VoIP question because of the mounting pressure fromindustry players to end the legal dilemma. There was a growing recognitionthat VoIP could offer an alternative means to cut the cost of doing businessin the country, as expressed by exporters, ISPs, and other market players.Debates on the VoIP issue also coincided with the Arroyo government’splan to liberalize the industry more as written in the Medium-TermPhilippine Development Plan for 2004-2010.

Overall, there is a need for a sustained capacity building of civilsociety as a first step in establishing a reform coalition that would notonly be reactive to emerging issues but would also offer long-term andstrategic solutions to major industry concerns. The government mustprovide an environment for this initiative to develop. One significantstep is for people’s organizations (POs) and consumer groups to berepresented in advisory councils of regulatory bodies. In this way, CSOscan intervene in or assist the DOTC, the CICT, the NTC, and otherrelated agencies in formulating plans that are responsive to the needsof the public. State-civil society relations can also be strengthened inthe area of technical cooperation. This is to provide government leaders


not only a working knowledge but also a deep appreciation of theevolving nature of information and communication technologies.Academic institutions are good venues to initiate policy debates amongthe civil society, private sector, and the government. The theoreticalfoundations of the telecom reforms discourse must be cultivated toelevate the consciousness of the public and bring about a comprehensivetelecommunications reform agenda.


1. Major telcos compete in providing the cheapest service in the market. Digitelbrand SunCellular first offered in 2004 its unlimited call plan (24/7) to Sun-to-Sun mobile phone numbers. Globe started in March 2005, through its TouchMobile brand, its thirty-day promo of unlimited one-month Touch Mobile toTouch Mobile calls and texts for PHP 300 and PHP 50 for five days of unlimitedtext messaging. PLDT’s two wireless units, Smart Communications Inc. andPilipino Telephone Corp. (Piltel), launched its unlimited call scheme (dubbed25/8) in March 2005 to counter SunCellular’s and Innove’s mobile phonesubscription plans.

2. See Pulse/PNA 2005.3. One major reason is that mobile subscription costs only around PHP 300 a

month through a prepaid card with text messaging service, compared to theminimum PHP 600 monthly subscription to a fixed telephone. Cellular phoneusers also enjoy the luxury of mobility and a personalized number, which theycan change anytime just by purchasing a SIM card.

4. The chairperson of the CICT is part of the DOTC leadership. He/she directlyreports to the president about ICT matters and to the DOTC secretary for his/her agency responsibilities.

5. PLDT’s predominance can be traced to the adoption of the American colonialgovernment’s model of natural monopoly. By the virtue of the 1928 PhilippineLegislature Act 3436 passed on November 28, 1928, PLDT was first given afifty-year franchise to develop the telecommunications infrastructure of thecountry. The franchise was extended until 2028. The Marcos government helpedRamon Cojuangco, the first PLDT president, and his associates acquire controlover PLDT while the Aquino administration nurtured the company by placingindividuals in the company who could safeguard the interests of the Cojuangcofamily.


6. Under the text scam, hoax messages are being sent to the unsuspecting victimsusing the name of the Bangko Sentral ng Pilipinas, the Philippine CharitySweepstakes, the Philippine Amusement and Gaming Corporation and otherinstitutions advising the victims about winning a huge amount of prize. Theswindlers often instruct their prey that the latter should first deposit a considerablesum of money to the former’s bank account, allegedly for tax payments andother fees, as a requirement to getting the prize.

7. VAS is defined as enhanced services beyond those ordinarily provided for bylocal exchange operators, inter-exchange operators and overseas carriers, includingInternet services. A VAS provider does not set up its own network and reliessolely on the transmission, switching and local distribution facilities ofenfranchised telephone companies. Hence, it does not need to secure a franchisein order to operate but only a registration with the NTC (RA 7925, article 1,section 3h).

8. Interconnection guidelines can be found in 1) RA 7925 (article 2, section 4g;article 3, section 5c; article 4, sections 8d, 9a, 11b; article 6, section 18), 2) EO59 (section 56), and 3) EO 109 (article 5, sections 22 and 28).

9. With the help of his topnotch technocrats, former president Ramos utilized thesocial sector to further his demonopolization project. They formed the groupMorePhones to assail PLDT’s inefficient service. MorePhones accentuated thedistrust of the people toward the inefficient service of PLDT. The campaignlasted for about three months and was characterized by anti-PLDT press releasesand numerous fora and press conferences.

10. The road was named after a former Philippine president and father of PresidentGloria Macapagal Arroyo. The government spent PHP 1 billion to construct theone-kilometer avenue.

11. Telcos are already paying a 10 percent VAT on all services, 32 percent incometax, 10 percent overseas communication tax, and other various fees and chargesfor licenses to the National Telecommunications Commission.

12. An E1/R2 is a leased line composed of 30 lines that can accommodate 30simultaneous calls at 56 kilobytes per second (kbps). PISO filed four chargesagainst PLDT. First, for its unreasonable and discriminatory pricing of E1/R2lines. Second, for its involvement in predatory pricing in order to eliminatecompetition. Third, for its delayed action on the request of PISO on access to itsDSL infrastructure which is tantamount to denial of access. And fourth, for itsdenial of access regarding the request of PISO to access its VIBE Service fordomestic dial-up Internet service.



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Conclusion: Palliatives forConclusion: Palliatives forConclusion: Palliatives forConclusion: Palliatives forConclusion: Palliatives for“Globalization with a Human Face”“Globalization with a Human Face”“Globalization with a Human Face”“Globalization with a Human Face”“Globalization with a Human Face”

Teresa S. Encarnacion Tadem

In determining whether globalization has indeed brought about positiveor negative outcomes in the concerned industries—vegetable, hog,garment, and telecommunications—the case studies initially looked

into the state of these industries before trade liberalization.1 The nature ofstate-civil society engagement during this period was also examined. Amongthose studied, the Philippine vegetable industry, prior to liberalization,had generally been the most underdeveloped and lacking in governmentsupport, although it had survived as it held a monopoly on its targetdomestic market. The situation is different for the garment industry, whichexperienced growth in the past three decades on account of the Multi-Fiber Arrangement (MFA) whose quota system assured local garmentmanufacturers overseas markets for their products. Garments became amajor dollar earner for the country through the MFA, even as the industrybenefited from the state’s export-led industrialization policy. Similarly, thehog industry, though not export-driven, profited much, buoyed by theFilipinos’ penchant for pork. Though industry players have expressed theirapprehensions regarding the importation—and smuggling—of meatproducts, profit from hog raising can still be realized. As for thetelecommunications industry, the absence of market competition beforeliberalization had left it in dire straits. The introduction of new players in

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the market, however, spelled more effectiveness and efficiency, as well asoptions for the consumers.

Globalization and the Nature ofGlobalization and the Nature ofGlobalization and the Nature ofGlobalization and the Nature ofGlobalization and the Nature ofState-Civil Society EngagementState-Civil Society EngagementState-Civil Society EngagementState-Civil Society EngagementState-Civil Society Engagement

The case studies focus on civil society engagement in the vegetable,garment, and hog industries, which are struggling against the ill effectsof trade liberalization; and the telecommunications industry, whichprofited from globalization. Civil society consists of the stakeholderswho are directly affected by the problem and may entirely benefit orsuffer from the outcomes of the engagement in terms of policy response.Based on the discussion in the introduction, those that can becategorized as profit civil-society organizations (CSOs) are the farmers’/peasant organizations in the vegetable industry, and the owners of thegarment factories and their workers. The hog industry has at least sevenmajor stakeholders; the case study focuses on the hog farmers and thefeed millers, as well as other players outside the hog industry, i.e., themeat processors, slaughterhouse operators, and the hog and meatdealers. The telecommunications companies’ (telcos) civil societyincludes the Internet service providers (ISPs). The consumers, whoplayed an important role in the telecommunications industry, may alsobe considered part of CSOs.

The nonprofit CSOs in the vegetable industry consisted of politicalblocs, nongovernment organizations (NGOs), coalitions, and thechurch. These groups not only took on commodity-specific engagementof the state but also tackled issues concerning agricultural tradeliberalization or even the Philippine economic framework in itsentirety; thus, on some occasions, these groups were actuallyadvocating for policy reforms that they believe would benefit the entireagricultural sector and not exclusively the vegetable industry. GlobalCSOs, on the other hand, were found in the garment industry as theworkers linked up with global CSOs engaged in protecting workers’rights.

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The researches recognized the role of consumer groups in theseindustries, but with the exception of the telecommunications sector,these groups did not figure prominently in the debate on the positiveor negative impact of globalization in relation to the industries beingstudied. These include the major consumer groups in the Philippines,such as the Consumer Union of the Philippines (CUP), one of thebiggest consumer organizations in the country; the ConsumersFederated Groups of the Philippines Inc. (CFGP), a private organizationthat works for the welfare and protection of consumers; and the Citizens’Alliance for Consumer Protection (CACP), which has been part of aworldwide social movement since its founding days in the late 1970s(Directory of Consumer Organizations). These consumer groups eachhave different advocacies. The CUP, for example, focused on oppositionto electric rates and airline and other transportation fares. It alsocampaigned against the importation of sugar and rice, and the need totest products and assure their quality. The CFGP is mainly concernedwith monitoring prices and quality of prime commodities, and assistingconsumers in seeking redress for their complaints. The CACP, on theother hand, made its mark in protesting oil price hikes during theMartial Law period and called for the promotion of locally producedgoods. It was also concerned with exposing questionable goods andservices and opposing institutions that were harmful to consumers(Directory of Consumer Organizations).

Other consumer groups were established for even more specificreasons. The Coalition for Consumer Protection and Welfare (formerlyCoalition 349), for instance, was organized as a result of the Pepsi“Numbers Fever” marketing scandal in 1992, which was characterizedby “changing the rules while the game was being played.” TheNationwide Association of Consumers Inc. (NACI), on the other hand,was “born out of the need to protest illegal pyramid schemes” (Directoryof Consumer Organizations). No prominent consumer groups emergedout of the impact of globalization on the garment, hog, and Benguetvegetable industries, i.e., for cheaper garments, pork, and vegetables,respectively. Most probably, the consumers found themselves benefiting


from the cheaper products in these industries, and so, why protestagainst trade liberalization?

Before Trade Liberalization:CSOs’ Bargaining Leverage vis-à-vis the State

For the vegetable and hog industries, trade liberalization began duringthe country’s ascension to the World Trade Organization’s (WTO) rulesand regulations, which had a direct impact on these two industries.

During the same period, in the Ramos administration, thetelecommunications monopoly was broken up beginning in 1992.

Trade liberalization for the garment industry, on the other hand, beganin the 1970s under Marcos’s martial law regime, when the state pursuedan export-oriented industrialization program under the auspices of theWorld Bank and the International Monetary Fund (IMF). Therefore, state-civil society relations in the industry was discussed within the context ofthe shift from an authoritarian to a democratic regime, i.e., in 1986. Onemay also consider this period as the “pre-neoliberalism” period in thegarment industry, in which the authoritarian state had a heavy hand indetermining the industry’s development thrust. A major question thatemerged during the period was whether the process of democratizationhad a distinct impact on state-civil society relations.

The Benguet vegetable farmers before trade liberalization exercisedlittle political clout to gain state support for their industry despite itsimportance to the province’s economy. The weakness in their bargainingleverage may have stemmed from the lack of demand for vegetables. Butbecause these farmers enjoyed a sort of market monopoly, there had beenno need for them to engage the state. Also, vegetable farming is a high-riskenterprise, providing farmers very little incentive. Furthermore, vegetableis not a political (or major) crop in the Philippines insofar as the numberof farmers, the total area planted/harvested, and its contribution to theeconomy (GDP, gross-value added, etc.) are concerned. In the era ofglobalization, instead of fighting for government support, the farmerssimply considered alternative means of livelihood.

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The same cannot be said of the garment and hog industries. As one ofthe country’s top dollar earners, the garment industry’s captains enjoyed aprivileged position, particularly with the MFA and the demand forPhilippine exports as facilitated by the boom in garment industries in theFirst World. But state-civil society engagement in the garment industryhad differential impact on the stakeholders. That is, the owners/employershad the bargaining leverage vis-à-vis the state because they were the oneswho profited from the earnings. However, the same could not be said ofthe industry’s laborers. As pointed out in the case study, workers have beenexploited not only in terms of low wages but also in terms of inhumanworking conditions. This had been exacerbated by the political dispensationat the time, i.e., the Martial Law period, in which political and civil rightswere curtailed. Thus, for example, the workers could not strike. Strippedof their political rights, the workers, like the vegetable farmers, also didnot have the economic clout to engage the state. But unlike the vegetablefarmers, the garment workers benefited from the labor unions, particularlythose organized by the militant Left movement, i.e., those identified withthe Communist Party of the Philippines (CPP), which strengthenedparticularly during the Martial Law period. The broadening protestmovement against Marcos’s repressive regime provided the workers thepolitical opportunity to organize and demand for higher wages and betterworking conditions. One, therefore, had a situation in which profit CSOswere allied with nonprofit CSOs. It was unfortunate that, first, the Leftdid not organize the workers in a sectoral manner, i.e., attention was givento the sector in general and not the specific demands of each sector. Second,workers’ rights were integrated into the overall revolutionary struggle, sothat the Left was more concerned with what the workers’ movements couldcontribute to the overthrow of the government and the establishment of arevolutionary society rather than what kind of reforms could improve theworkers’ conditions. And lastly, even at the height of its organization, only10 percent of the workers were organized.

The hog industry apparently saw no need to engage the state since ithas always been a profit-making venture. And even if it had to, it had theeconomic clout to pursue such an engagement.


As for the telecommunications industry, because of the decades-oldmonopoly of the Philippine Long Distance Telephone (PLDT) Company,there was also no pressing need to engage the state. This was especially sowhen it was taken over by the government during the Martial Law period.During the Aquino administration, the PLDT was perceived as “protected”from other sources of competition as then-President Corazon Aquino’srelatives had interest in the company.

These “pre-trade liberalization”/“pre-neoliberalism” experiences revealthat in terms of state-civil society engagement, those with economic clout,such as the garment industry, can engage the state and gain favorablepolicies, helped by the world demand for garment exports. On the otherhand, the hog and telecommunications industries found no reason to engagethe state because the former was doing well on account of the domesticdemand, and the latter enjoyed a monopoly.

The garment workers engaged the state through the labor unions, andthe demands were framed not in terms of industry reforms but the needfor radical change in society.

Arguments for or against liberalization

The assessment of the impact of liberalization on the sectors studiedduring the globalization period shows similarities and differences inperspectives. Liberalization’s positive effect is best seen in thetelecommunications industry, which saw new players in the market andtherefore more options for the consumers. Foreign investors forgedpartnerships with local companies; more phone lines were installed; and,since 2000, there has been a phenomenal growth in cellular and mobiletelecommunication services (CMTS). There has also been maximumutilization of the short message service (SMS) or “texting” in many partsof the country. Healthy competition among industry players, favoring theconsumers and other local players outside the industry, has also been anotherpositive impact of globalization.

Liberalization meant something else for the hog industry: cheaperimports not only of pork but also of other low-priced meat—beef, buffalo

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meat, and poultry—could bring about a shift in consumption patterns,thus keeping other local players from having a complete monopoly.

On a wider sphere, globalization has also opened up spaces fortransnational movements to bond for a common cause. For example, thegarment industry has links with local and global networks to upholdworkers’ rights, such as the Clean Clothes Campaign.

Losing out to cheaper imports

One major negative impact for the industries, however, is the loss ofprofits for the producers in the vegetable, garment, and hog industries onaccount of tariff reduction as directed by the WTO and the government’sunilateral action.

Impacts differ, however, across the industries, even as their mainconcerns have to do with tariff, import, and quota. For example, since theratification of the WTO agreement, the Philippines has consistentlyimported less pork and poultry meat than what the minimum access volume(MAV) agreement stipulates. This means that the threat of imports to thedomestic hog industry has not yet fully materialized (Habito 2002).

Despite the closure of several factories because of cheaper imports, thegarment industry continues to be one of the country’s dollar earners.However, it is heavily dependent on imported raw materials—about 95percent of its fabric and textile requirements are imported because theprice of local textiles is relatively higher than the prevailing world price.Also because it is dollar-dependent export, it is vulnerable to fluctuationsin the world market and the protectionist policies of importing countrieslike the US and the European community.

Sadly for the Benguet vegetable industry, globalization has driven thelast nail on its coffin.

The class bias

That globalization is favoring the rich is also seen in the experiencesreported in the four case studies. For example, cheap labor and long workinghours characterize the garment industry, in an effort to compete with other


garment-producing countries. This situation is epitomized by the garmentsubcontracting industry wherein the workers are not given the opportunityto unionize. Furthermore, there persists the practice of part-time, temporary,and casual work. Women, who comprise the majority of the industry’sworkforce, are the biggest victims. Capital for garment industries has movedto production sites that offer better opportunities for profit accumulation,i.e., lower wages.

Class bias: An issue of governance or philosophy of development?

At the industry level, the four case studies reveal that the state supportsliberalization in industries where the players are “weak,” as in the vegetableand garment industries, and allows for monopolistic behavior in an industrywhere the players are “strong,” e.g., the telcos. The state has been passiveon the issue of telecommunications market services. It has even encouragedmonopolistic behavior by protecting strong ties with telco executives onaccount of their contribution to the national treasury.

Are these more of an issue of governance or the philosophy ofdevelopment, i.e., neoliberalism? What emerges in the case studies is thatthis is neither an either/or question nor are they mutually exclusive.Neoliberalism breeds a particular form of governance, which makes itdifficult to address socioeconomic inequalities. That is, it is not concernedwith the redistribution of wealth. It argues that a market economy underthe auspices of liberalization will bring about the trickle-down effect.

But as critics of globalization have pointed out, and what has emergedin the case studies as the class bias, globalization has witnessed the richerstates becoming richer and the poorer nations becoming poorer. Moreover,within the respective societies, the rich are becoming richer while the poorare becoming poorer. What is seen particularly in telecommunications isthe elite’s capture of the state whereby the state has allowed for monopolistictendencies. Although globalization is viewed as a means to end the“patrimonial state,” which is captured by patronage politics and is lackingthe “vision, autonomy, and bureaucratic capacity necessary to implementa development program,” this is really not the case (Budd 2005).Globalization has even aggravated socioeconomic inequalities because of

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the unequal competition in a country where there is a wide gap betweenthe rich and the poor. Thus, it seems that globalization has facilitated theelite capture of the state. The powerless in the person of the Benguetvegetable farmers and the garment workers have asked for state interventionin the form of safety nets. But this also goes against the very tenet ofneoliberalism, which demands no state intervention. Neoliberalism statesthat if you cannot compete, you wither away. Thus, there is actually noroom for governance as neoliberalism sees a minimal role for the state. Asargued by Jomo (2006): “The ‘retreat of the state’ in much of thedeveloping world in recent decades has involved a generally reducedrole for government, including the capacity to lead and sustaindevelopment, as well as its progressive social interventions.”

The reality, therefore, is that globalization falls short of pushing thedemocratization process in a country where socioeconomic inequalitiesprevail. Thus workers in the garment industry, for example, are exploitedeven more now because worldwide cutthroat competition has become moreintense. If they do not allow themselves to be exploited, they lose theirjobs as their factories fold up upon failing to compete.

The same argument could also apply to the intensification ofsmuggling with globalization. One can argue that this is a governanceconcern and cannot be blamed on globalization. But this brings againthe reality of the elite capture of the state, which allows for smuggling.The only way to end this is to address the income inequalities in societyto empower the majority to put an end to the corruption of the elites.Neoliberalism as a philosophy of development, however, does notaddress this concern. Worse, the state is hostage not only to the elitesbut also to international financial institutions (IFIs) that pressure thePhilippines, for example, to adhere to further liberalization in exchangefor much-needed loans and economic assistance.

Favoring the majority at what cost?

Globalization is also seen as favoring the “interests” of the majority(e.g., the consumers) vis-à-vis the stakeholders (e.g., the farmers in theBenguet vegetable industry and the workers in the garment industry). But


at what cost? The cost lies in the aspect of the sustainability of an economythat can no longer compete with foreign goods, resulting in the ultimatedeaths of key industries, i.e., vegetable, hog, and garments.

Based on the case studies, local producers argue that globalization doesnot provide an environment conducive to the creation of politicalopportunities for long-term development, particularly in the developmentof a domestic market for local products. With globalization’s class bias,even if the imported vegetables, pork, and garments are cheaper, who canafford to buy these? Certainly not the Benguet vegetable farmers and thegarment workers who have been laid off because their industries can nolonger compete with their foreign counterparts on account of liberalization.There is need, too, to disaggregate the consumers, particularly with regardto those who can actually afford to eat three meals a day and those whocannot. Certainly these are not the farmers, the workers, and their familieswho have lost their sources of livelihood.

The Objectives of Engagement

State-civil society engagement has to do with how the industries’stakeholders adversely affected by globalization, particularly with regardto the profits they earn, attempt to address the issue politically. Politicshere is defined as “a process whereby a group of people, whose opinions orinterests are initially divergent, reach collective decisions which are generallyaccepted as binding, on the group, enforced as common policy” (Miller1991, 390). For the stakeholders, the arena for intervention is the state.The framework used is the liberal-relational approach to state-civil societyengagement, which looks at the possibilities of forming alliances with stateelites.

At the microlevel, there is the call for safety nets in the vegetable andgarment industries to keep these industries from dying. There is also a callfor state regulation as a necessary countervailing force against market power,as exemplified by the telecommunications industry, in which there mustbe a fair distribution of market power parallel to the creation of anenvironment that discourages monopolistic behavior. For example, the

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telcos did not want the independent ISPs to provide the Voice over InternetProtocol (VoIP), claiming that this fell under their jurisdiction. ISPs couldprovide this service at a cheaper rate, but this would pull away profits fromthe telcos. The situation required a strong and neutral state regulator toassure upfront competition.

Engagement also seeks the participation of the affected sectors in policymaking. As pointed out in the Benguet vegetable industry, the Philippinegovernment has created a political environment hostile to civil societyadvocating reforms in trade policies that are deemed threatening to thefull realization of its economic orthodoxy. And for the garment industry,the policy challenge is for civil society to link the issue of the workers withthe bigger rubric of pushing further the democratization process that woulduphold the workers’ rights. Another challenge for these industries is howto modify state policies that put them at a disadvantage if the government’shands are already tied by agreements it has signed.

Moreover, it is also necessary to prioritize the needs of the industriesalong with those of the consumers and to determine what would be bestfor the public good. Should the country, for example, continue importingvegetables to satisfy the consumers in exchange for the death of the Benguetvegetable industry? On the other hand, the hog raisers, despite being apowerful business lobby group, are prevented from exercising a completemonopoly because of competition from other powerful players like themeat processors and the corn and grain feeders. The state’s entry intoagreements for liberalization has also basically tied its hands with regard tofully supporting the interests of the hog industry.

In all of these, the question is, under what political conditions cancivil society engage the state to address the impact of trade liberalization,which is a by-product of government’s submission to market forces?

Again, solutions in the form of safety nets for the Benguet vegetablefarmers and garment workers and more participation in decision makingcan be dismissed as an issue of governance. But this is not the case with aphilosophy of development that diminishes the role the state can play inthe economy. Furthermore, the diminished role of the state comes at a


time where there persists a big gap between the rich and the poor. Thus, ifever stakeholders could participate in decision making, these would be thewell-off, as can be seen in the telecommunications and hog industries.One witnesses, for example, the state’s inability to regulate the telcos becauseit has been captured by the elite.

Political Opportunity StructuresPolitical Opportunity StructuresPolitical Opportunity StructuresPolitical Opportunity StructuresPolitical Opportunity Structuresat the Domestic Levelat the Domestic Levelat the Domestic Levelat the Domestic Levelat the Domestic Level

Factors facilitating the actions taken by civil society can be viewedwithin the internal and external dimensions of the political environment.Notably, state-civil society engagement is happening in a period ofdemocratization, i.e., not under the repressive political environment ofthe Martial Law period, which was the context of state-civil societyengagement during the pre-trade liberalization period of each of theindustries, with the exception of the garment industry. The case studiesshow that civil society also made use of institutional openings to dialoguewith the relevant government agencies. This has been made possible bythe expanding space for democratic and consultative processes evident inpost-EDSA governments.

Engaging the State Institutions

The general willingness of the post-Marcos Philippine state to engagecivil-society actors in designing its policies and in implementing itsprograms—thus conferring on its actions a constant veneer of democraticlegitimacy—has benefited civil society as it explicitly opened spaces forparticipation of non-state ators in regular politics. Such participation isfacilitated by laws, such as the Republic Act (RA) 8435 or the Agricultureand Fisheries Modernization Act (AFMA) of 1997, which recognizes thatcivil-society actors will play a key role in its effort to modernize agriculture,and that the state would set the rules on such partnership. There were alsoinstitutionalized mechanisms such as those embodied in the LocalGovernment Code, which also facilitated civil society engagement at thelocal level, particularly seen in the experience of the Benguet vegetable

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industry stakeholders. Another is through the creation of agencies, whichallows for participation of various sectors in the decision-making processas seen in the government-sponsored National Tripartite Conference thatgathered representatives from major labor organizations, management, andgovernment experts on the garment industry (Magadia 2003, 67-68). It ismainly through agencies like these that labor groups formally engage theexecutive branch. Civil-society engagement also focused on the establishedinstitutions of the bureaucracy, the legislature, and the judiciary.

The garment industry, for example, engaged the bureaucrats when itheld formal and direct dialogues with relevant government officials fromthe Garments and Textile Export Board (GTEB), the Department of Tradeand Industry (DTI), and the Department of Labor and Employment(DOLE), among others. Issues the garment industry raised had to do withthe case of displaced workers in factories that have closed; a comprehensiveplan on how to save the garment industry; and preparing the workers forthe MFA phaseout. Civil society in the garment industry also focused itsefforts in reforming the Bureau of Customs. Corruption in the bureau hasmade it easier for smuggled garments to enter the country. Labor groupsin the garment industry likewise engaged the judiciary through the filingof cases against employers.

Political opportunity structures also presented themselves at thelegislative and judicial levels. The Philippine Congress, for example, wasused as a venue for articulating the grievances of the Benguet vegetablefarmers, particularly through the party-list system, which has made possiblethe representation of the marginalized and underrepresented in thelegislative process. In filing cases against their employers, labor groups inthe garment industry made use of the judiciary.

Mobilizing allies

Equally important in engagement is the identification of key allies ingovernment institutions. The Benguet vegetable industry, for example,found a major ally in then-Department of Agriculture (DA) UndersecretaryErnesto Ordoñez, who endorsed the actions of the vegetable traders,


allowing them to penetrate the Bureau of Customs. In some cases, allieswere also formed not on the basis of principle but because of certainindividual’s self-serving interest. For example, former DTI Secretary andnow-Senator Manuel “Mar” Roxas III, an advocate of consumer-orientedglobalization and thus opposed to an increase in tariff rates, changed hisposition because the vegetable stakeholders played on his electoral ambitionsto appeal for the protection of the vegetable industry. Roxas’s case is notunique as electoral politics provides an opportunity for policy advocacy inexchange for votes. In the telecommunications industry, Senator Roxasalso emerged as a crucial ally. He supported the interests of ISPs when hefiled a resolution in Congress calling for the Senate to remove all obstaclesto the full commercialization and development of VoIP as a cheaperalternative to international calls.

Such a situation reveals that although stable aspects of politicalopportunity structures are fixed and regarded as givens (Tarrow 1994),for example the strength of state institutions or the party system, thereare precarious elements that shift with events and policies, and areessentially “matters of contention in which movements participate”(Gamson and Meyer 1996). This could be seen in the case of electionsand the manner in which the Benguet vegetable industry framed itsconcerns whereby “these volatile features are conceived as processualrather than structural and entail perception or framing of such politicalopportunities by movement participants in order to influencemobilization” (Tarrow 1994; Gamson and Meyer 1996; McCarthy,Smith, and Zald 1996). Furthermore, in the case of engaging the stateinstitutions, “importance is attributed to points of access and inclusionin policy making. It is said that mobilization is strongest when thepolitical system is in the process of opening up to movement demands,rather than when access is completely closed or when the regime hasfully met the movement’s demands” (Tarrow 1994).

Local allies are found not only in the national bureaucracy but also inthe local government. This was the experience of the Benguet vegetablefarmers when civil society was able to mobilize the local government because

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of its huge stake in vegetable farming. The farmers’ allies were the Benguetlocal government officials who were running during the elections, openingdoors for civil society’s advocacy in the vegetable industry. Moreover, thefarmers also mobilized nonstakeholders by making the issue part of thelarger campaign against agricultural trade liberalization.

As for powerful allies at the level of the local government, this wasfound in Benguet local officials such as Fongwan, Kim, Molintas, Sacla,and Uy. Some alliances were also formed because some of these local officialswere formerly vegetable traders themselves and thus could commiseratewith the plight of the Benguet vegetable industry players. They are referredto as “institutional activists,” being government officials formerly associatedwith civil-society advocacy groups.

Civil Society Engaging the Private Sector

The battle among the players in civil society was most evident inthe telecommunications sector: the ISPs versus the telcos that foundsupport from telephone companies such as Bell Telecoms with regardto the VoIP. There was also the involvement of big US telephonecompanies such as AT&T Corp., which urged the Philippinegovernment to classify VoIP as a value-added service (VAS), i.e., notwithin the control of the telcos, which will ultimately liberalize theindustry. Thus, deregulation of the industry would be good for thepublic as it would prevent foreign players to easily capture a portionof the market. Civil-society groups emerged, like the PISO, which isthe voice of the small ISPs. In March 2005, the NationalTelecommunications Commission (NTC) classified VoIP as a VAS, thusbreaking the monopoly of telcos as the sole provider of VoIP services.Thus, in the battle of these two profit-making enterprises, public goodwas served with the triumph of the ISPs.

While liberalization, i.e., deregulation, frees the market for moreplayers, there is still need for a strong regulatory body that would preventa monopoly. While the telcos and consumers checked the governmenton the tax on text messaging, the consumers seemed to be powerless


with regard to the government’s and telcos’ collusion on a franchisetax. The government and the ISPs, in turn, checked the telcos’ monopolyof the VoIP service. This highlights the issue of whether thereshould be a strong regulatory state in place before liberalization occurs.The more structural issue, however, is whether liberalization canwork in a society characterized by a big gap between the rich and thepoor.

Complementing Domestic Political OpportunityComplementing Domestic Political OpportunityComplementing Domestic Political OpportunityComplementing Domestic Political OpportunityComplementing Domestic Political OpportunityStructures with Resource MobilizationStructures with Resource MobilizationStructures with Resource MobilizationStructures with Resource MobilizationStructures with Resource Mobilization

The domestic political opportunity structures that civil society couldtake advantage of were also made possible by the resources at their disposal.One of the more important ones was their ability to form alliances withother like-minded players. In the case of the Benguet-vegetable civil society,for example, it tapped alliances at the national level, such as the Fair TradeAlliance (FTA), a middle-class movement; and the Kilusang Magbubukidng Pilipinas (KMP) and the Alyansa Dagiti Pesante iti Taeng Kordilyera(Alliance of Peasants in the Cordillera Homeland [APIT TAKO]), whichare part of the lower-class movement. It also forged alliances with politicalblocs, e.g., Akbayan and Bayan Muna, which carried their advocacycampaign. Notably, the KMP was an organization that emerged duringthe Martial Law period while the leadership of Akbayan and Bayan Munaconsists of personalities who were active during the anti-dictatorshipstruggle. Thus, the Benguet civil society benefited from political movementsestablished in the past as well as newly created ones like the FTA and theAPIT-TAKO.

A similar experience is also shared by civil-society campaigns in thegarment industry wherein civil society formed alliances to determine acourse of action upon the MFA’s expiration. Among these organizationsare the BMP-Almagate (Bukluran ng Manggagawang Pilipino–Alyansang Manggagawa sa Garment at Textile), the Labor Forum Beyond MFA,and the GARTEX Labor Council (Garments, Textile, and Allied IndustriesLabor Council). The latter is spearheaded by the FTA and comprises

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eighteen labor federations. Thus, the FTA is one network whose concernscut across sectors, in this case, the concern of the vegetable and garmentindustries vis-à-vis liberalization.

The hog industry could also rely on its strong organizational andbusiness networks and its prior experience in building cooperatives. Thisis seen in its ability to lobby members of the legislative and executivebranches of the government through formal dialogues, letter-writingcampaigns, and attendance in hearings and sectoral consultations as wellas in the use of the media to air their concerns. Its strength has been furtherreinforced with the formation of alliances such as the Agricultural SectorAlliance of the Philippines (ASAP) in 2001, which include feed millers’and hog raisers’ associations and cooperatives.

The civil-society network in the telecommunications industry involvedmainly the players who had direct stakes in the industry and the consumers(who did not figure at all in the vegetable industry). The tax issue, specificallythe so-called text tax, brought the players to a confrontation. Thegovernment along with some legislators framed the issue by arguing thatthe text tax will raise government revenue that can provide for more socialservices. Civil society, which did not agree, framed its argument by saying:1) there is no need to tax, if the government spent public money correctly;2) to impose taxes on text messaging is antipeople; and 3) governmentshould just run after the big tax evaders. Civil society found allies inlegislators, church groups, and overseas Filipino workers (OFWs), amongothers. The telcos also supported civil society on the issue, saying that thecost would merely be passed on to the subscribers. In the end, the presidentraised the VAT system on telecom providers from 10 percent to between12 and 14 percent instead of the franchise tax, which could translate intohigher cost of service. Thus, one had a case of the telcos and civil societycoming together vis-à-vis the government.

Networks and alliances in the telecommunications sector were alsoformed because of a common cause. The tax issue, for example, provideda political opportunity for civil society to continue to rally around concernsfor more affordable and efficient cellular phone service. One of these groups


was TxtPower, a loose organization of different progressive organizations.One of the issues they raised was the telcos’ reduction of the free-textallocations for prepaid subscribers without due consultation with theconsumers. Others were the drop calls, i.e., calls charged to subscriberswho did not make the calls. The group also questioned the limited periodimposed by telcos for the use of prepaid load credits. Civil society remainedvigilant vis-à-vis the government’s apparent penchant for creating new taxesand/or increasing current rates.

Rallies and protest actions

Protest actions also characterized the political environment. This wasseen when the garment industries held rallies and demonstrations to expressworkers’ grievances in the workplace and the illegal closure of factories. Itis equally important for the garment industry to target internationalinstitutions in its campaign to improve the industry as it engages the state.Such a strategy is not new as labor groups were particularly involved inseveral antigovernment mobilizations during the Marcos regime; well-known among these mobilizations is the welgang bayan (people’s strike).In fact, after President Corazon Aquino’s ascension to power, one of herfirst acts was to address industrial labor relations in recognition of thelabor movement’s contribution to the downfall of the dictatorship. Alongwith the workers’ utilization of the formal venues are the informalengagements that they launch occasionally (usually through rallies andpickets) to air their grievances.

Protest actions, however, were not limited to holding rallies. In thehog industry, there was the “meat holiday,” i.e., the nondistribution ofmeat products to the public markets in protest of the rampant smugglingof meat products. This was led by the Agricultural Sector Alliance of thePhilippines.

The use of the media

The media, for example, gave the Benguet vegetable industry crisiswide coverage. In a society where the media often set the agenda, it was

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reasonable for the civil-society actors to count on the institution for formingand influencing public opinion. The garment, hog, and telecommunicationsindustries also used the media to talk about their problems. Thus, themedia’s openness to social movements, although these are often excludedin the standard operationalization of political opportunity, is in itself animportant component of political opportunity structures, which has bothstructural and dynamic elements (Gamson and Mayer 1996). As seen inthe case studies, the content of media coverage may radically influence theprospects for mobilization of challenging demands and movements, as itaffects public awareness and perceived importance of a particular issue(McCombs and Shaw 1993). Mass media’s agenda-setting function,therefore, has progressed from the classical assertion that the news merelyinforms the public. The selection of objects for attention and frames forinterpreting these objects shape the manner in which news is construed(McCombs and Shaw 1993).

Other resources for mobilization

Civil society in the telecommunications industry, coming from theupper and middle classes, also had the resources and the capacity to launchmassive public education, organizing and mobilizing consumers, reinforcingmedia activities, and lobbying with sympathetic lawmakers and governmentofficials. Public campaign through SMS, Internet, and the broadcast mediawas also used. Civil-society groups also visited colleges and schools, markets,churches, government offices, and communities to gather signatures fortheir petition against measures that they felt went against the publicregarding telecommunications. The nature of their organization, i.e., theloose structure, enabled them to move effectively and forge inter-organizational linkages to accommodate more resources in their campaign.Civil-society groups also forged alliances in Congress. Their effectivenesswas seen when the text-tax issue died a natural death and civil-society groups,like TextPower, already had the capability to involve themselves in othertax issues and link up with others, like the anti-VAT groups. They framedthese issues in relation to those affecting the telecommunications sector,


such as the franchise tax, which will affect a broader range oftelecommunication services.

Such resources for civil society to engage government and the publicwere not seen in the Benguet vegetable industry whose constituency comesfrom the middle and lower classes. However, civil society’s knowledge ofthe issue was reflected in its strategy and policy proposals. Also favorableto the advocacy campaign of civil society was the division of labor amongthe federations of peasant political organizations, i.e., some focused on thedefense of resources and land reform while others tackled the issue ofvegetable importation.

As for the garment industry, the ability of the workers to engage informal (e.g., dialogue with government) and informal (e.g., pickets)strategies to gain government attention has much to do with theirorganizational skills and technical knowledge.

Civil society’s advocacy work in the garment and the Benguetvegetable industries has gained government recognition as well asappreciation of their political and economic importance. An evidenceof this is that the Benguet vegetable industry is represented in pertinentPhilippine trade agreements with other countries. Moreover, grassrootsorganizing and advocacy have increased social awareness of the industry’splight and have held government accountable to the community. Thishas also opened up opportunities for others to address similar concernsvis-à-vis government and society in general. Some refer to this as “state–social movement coalition,” whereby state actors use their resources toenhance the objectives of the social movement. This is very much inthe mode of the liberal-relational approach in understanding state-civilsociety engagement. Such an alliance happens when the concerns ofcivil society adversely impact on the locality, which local and nationalgovernment officials cannot ignore.

Political Opportunities at the External LevelPolitical Opportunities at the External LevelPolitical Opportunities at the External LevelPolitical Opportunities at the External LevelPolitical Opportunities at the External Level

Political opportunities at the external level were best seen in theformation of transnational alliances. For example, the garment industry

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forged alliances at the global level, which differentiated it from the Benguetvegetable industry whose alliances were limited to the local level. This isbecause transnational actors could relate to the issue of human rights, whichwas raised vis-à-vis the garment workers in the context of globalization.The loss of livelihood for the vegetable farmers, on the other hand, did notgenerate much sympathy from transnational actors. There was alsotransnational civil-society support for the garment workers because theyare better organized, unlike the small-vegetable farmers. This enabled thegarment-industry groups to network with overseas organizations, whichallowed them to learn from the campaigns taken by other groups andeventually apply these at home. These campaigns usually center on thecorporations’ social responsibility, with specific focus on theirresponsibilities toward their workers. The Clean Clothes Campaign, forexample, was formed to improve working conditions and empower workersin the global garment industry. Local chapters of international organizationswere also established in the Philippines. Moreover, because of theinternational networking of trade unions in the Philippines, they can reportto multinational companies the violations committed by local contractors.

Civil-society groups are not the only ones making use of suchcampaigns. Governments, for example, have also used these to instill socialresponsibility among local manufacturers. Agreements forged through theefforts of international institutions have also been very useful in settingthe directions of the country’s laws with regard to the protection of workers.For the garment industry, therefore, external political structures were utilizedto protect the workers’ rights rather than stopping the flow of cheapergarment imports to the country.

As for the telecommunications sector, an external political opportunitywas for them to draw in the OFWs in their campaign to ban the text tax.The external environment in which the neoliberal ideology dominates asperpetuated by the international financial institutions, e.g., the World Bankand the IMF, has brought more positive rather than negative results. Thisbrings out the fact that neoliberalism discourages too much stateintervention even as it does not dissipate the state power to tax. The


“Washington Consensus” even stipulated that a country should have astable exchange rate and a balanced government budget. This can beaccomplished through proper tax collection alongside less spending.

Factors Hindering the Action of Civil SocietyFactors Hindering the Action of Civil SocietyFactors Hindering the Action of Civil SocietyFactors Hindering the Action of Civil SocietyFactors Hindering the Action of Civil Society

Factors that hindered the action of civil society could be seen withinthe context of the limitations in the political opportunity structures bothat the domestic and international levels, and with regard to the resourcesthat could be utilized. In the Benguet vegetable industry, for example,there were key government officials who were not supportive of the vegetablefarmers like then-DA Secretary Arthur Yap. Yap epitomizes governmentofficials, particularly technocrats, who are shielded from political pressuresin their pursuit of the neoliberal ideology because they carry no politicalambitions. Although there may be a façade of openness to consultation asseen in the engagement of government agencies, the reality is that theseinstitutions are insulated from popular pressures. Aggravating the situationat the national level, the perspective of the bureaucracy with respect tocivil-society participation differs from one unit to another. A reason forthis is that while it is easy to tap local government officials as allies, gettingallies at the national government level is much more difficult because theagencies they are part of are more reflective of the interest of corporations.Thus the elite capture of the state, which neoliberalism does not address.

There were also limitations in the hog industry, one of which wasgovernment’s sheer ineffectiveness. This was seen in the foot-and-mouthdisease (FMD) incident in which the hog industry had to rely ongovernment to control, e.g., through the importation of FMD vaccines,vigilant policing of hog and pork traffic, imposing quarantine measures,and massive information campaign on FMD, among others. Civil societycriticized the government for corruption with regard to withholding moneyallotted for FMD. An important concern was the government’s refusal toact. Stakeholders in the hog industry, for example, linked the issue of meatimports with FMD—that is, to stop FMD was to stop the importation ofmeat, particularly carabeef, which had flooded the meat market. They also

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pointed out that the smuggling and excessive importation of meat wouldultimately lead to the collapse of the local hog industry. No decisive action,however, was taken by the government despite the fact that the ASAP heldprotest actions and declared a meat holiday, among others. They evendemanded the resignation of government officials who they believed wereinvolved in smuggling, but this was also to no avail.

In the Benguet vegetable industry, the strategy of civil society to focuson the executive branch rather than the legislature also seems to have beenflawed. For one, executive orders served only as temporary measures withvery short-term impact. The executive can also issue a policy that maybenefit the Benguet vegetable farmers but only to be negated by anotherpolicy. For example, the government is in partnership with the vegetableindustry to stop smuggling but it will not accede to lowering the tariffrates on imported vegetables. The legislature also has its limitations as anarena for engagement. These include the very low awareness of policy makersof international trade; the high rate of absenteeism, which may indicatelack of interest or little knowledge of the issue; the long-winded process oflegislation; and the parochial disposition of Congress as an institution.Changes in policy, therefore, are not based on principles but on realpolitikor quid pro quo. Furthermore, at the end of the day, the executive is taskedto implement the trade policies mandated by Congress.

In the case of the telecommunications industry, the legislature generallyplayed a supporting role either to the state (e.g., the NTC) or to the civil-society players (i.e., the telcos, the ISPs, and the consumers). The telcoshave more resources; they are able to translate these to political influence.The reality, therefore, is that the state must address the adverse effects ofglobalization, despite the fact that neoliberalism calls for the state’sdiminished role.

To reiterate what Mittelman (2002, 10) said, globalization as manifestedby its major conveyors, the intergovernmental organizations (IGOs) likethe WTO, tends to fragment the national political system and leaves winnersand losers. Among the winners, as very well seen in the case studies, are theexecutive and the bureaucracy, which conduct negotiations and provide


the representatives to IGO meetings; they therefore occupy pole position(Hague and Harrop 2004, 27). The losers, on the other hand, include thelegislature and the political parties. The former may only learn of aninternational agreement after the government has signed it. The latter mayhave lost ground under the pressure from IGOs. This may explain why inthe case studies, political parties do not seem to play a role at all in state-civil society engagement (Hague and Harrop 2004, 28). This is certainlymost unfortunate for civil-society groups as the legislature and the politicalparties are the institutional vehicles of representation for the citizenry.

Furthermore, despite the inroads, such as the institutionalization ofNGOs’ and traders’ participation in the antismuggling operations ofgovernment agencies and task forces in the Benguet vegetable industry,the government response has been minimal. In this context, state accessionto civil-society demands is seen as a mere rhetoric or a means to legitimizestate policies, e.g., the antismuggling program. In this light, changes inpolitical opportunity structures as brought about by the democratizationprocess are only capable of facilitating civil society’s entry into the policy-making arena and its advocacy of modest policy reforms. The long-termbut still-elusive solution, therefore, is for civil society to craft a feasiblealternative economic paradigm that serves as the foundation for its policyadvocacy on agriculture in general and the vegetable industry in particular.This would also prevent the government from treating the concerns of thevegetable industry as issue-specific rather than comprehensively.

Therefore, the adverse effects of globalization cannot be fully confrontedas long as there are impediments in the democratization process. Theseimpediments, on the other hand, cannot be addressed when socioeconomicinequalities pervade in society, a reality which neoliberalism has failed toaddress.

Limitations in the political opportunity structuresat the international level

At the international level, the major stumbling block was the state’ssubmission to external forces, i.e., market forces, over which it had no

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control. Nevertheless, civil society in the Benguet vegetable industry soughtto remedy this by engaging the state.

As for the hog industry, the government could not stop the importationof meats because it had already signed agreements that opened up thecountry for liberalization. Importation has had different impacts on thevarious sectors directly or indirectly linked with the hog industry. Forexample, it led to the loss of profits for the hog industry unless thegovernment reduced production costs by lowering tariff on corn andsoybeans, primary components of hog feeds. This meant that pursuing theinterest of hog industry players would go against civil-society advocates ofthe producers of these commodities, such as the corn farmers. This wasalso seen in the case of the call to stop the importation of carabeef fromIndia, which benefited the hog industry but not the meat processors whowere benefiting from carabeef imports. Thus, although the governmenthas attempted to address the interests of the different affected sectors, ithas failed to come up with a win-win solution.

Only the garment industry workers could take advantage of linkingup with transnational movements fighting for a similar cause. Unlike thevegetable and hog industries, these movements are more focused on workers’rights rather than livelihood issues.

Limitations in resources for engagement

One of the factors that went against the Benguet vegetable industrywas the lack of organization among the farmers, which kept them fromany meaningful participation. The highly technical nature of discussionsduring public hearings and consultations also alienated groups that werenot conversant with the different aspects of tariff policy. This was aggravatedby the lack of pertinent information and data, thus making it difficult toestablish the validity of the case through hard facts and, in the process,undermining civil society’s credibility vis-à-vis the policy makers.

In the formal approach to state engagement, there was also the issue ofmisrepresentation. Traders, for example, misrepresented themselves asfarmers and their approach, i.e., of carrying out the antismuggling drive,


was not approved of by other civil-society groups that believed this to bethe task of the government. There was also resistance among vegetablefarmers to political organizing for fear of being manipulated to advance aparticular dogma. Misrepresentation also benefited the traders, creating agap between them and the farmers. Furthermore, the Benguet vegetableindustry, unlike the hog industry, could not take advantage of RA 5435whereby the state recognizes state and civil-society partnership indevelopment.

For the telecommunications industry, it was very clear whatorganizations the civil-society members belonged to, i.e., whether theywere with the telcos, the ISPs, or the consumer groups. The same could besaid for the civil-society players in the hog and garment industries.

As for the labor movement in the garment industry, questions thatarise include why the labor movement, one of the oldest movements in thePhilippines, is unable to assert itself with regard to the workers’ conditionin a period of democracy. One view is that the labor movement has notbeen sector-specific, i.e., attention has not been given to the nuances ofeach of the sectoral needs of the workers. Also, subcontracting has made itdifficult for workers to organize since they are diffused.


These studies have shown globalization’s different effects within andacross domestic industries as well as the multiple strategies of engagementbetween civil society and the state. The impact on the stakeholders in theBenguet vegetable, garment, and hog industries has been negative. Theimpact was most severe in the case of the Benguet vegetable industry, whichbarely survived despite its pre-trade liberalization monopoly of the industry.

The garment industry, despite being among the top export earners, showsthat globalization in a time of democracy has brought about profit lossestranslating into the closure of several factories and the layoff of hundredsof workers. The expiration of the MFA will only make matters worse.

Globalization has brought in cheaper meat, but this hardly threatensthe hog industry.

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For the telecommunications sectors, however, globalization has beenpositive as the entry of more players encouraged greater competition.

In all these, the consumers are the ones who supposedly benefit themost as globalization provides them with cheaper products. However, thiscomes at the expense of the industries that clearly cannot compete. Thereis therefore a need for reforms that could be implemented vis-à-visdevelopmental outcomes arising from economic liberalization in specificsectors. Prioritization as well as safety nets are most urgent if communitiesare to survive the adverse impact of globalization. In other words,globalization should not be adopted wholesale but on a case-to-case basis,with preference for the more marginalized sectors.

Another important lesson from these case studies is that the state cannotafford to treat the adverse impact of globalization on a piecemeal basis,i.e., being issue-specific. Civil society, on the other hand, also has to do itshomework to provide a feasible alternative with regard to their specificsectoral concern vis-à-vis what unbridled neoliberalism has to offer. Moreimportant, there is a need to come together to put these concerns withinthe bigger framework of development.

The upside is that the situation provides political opportunities forcivil society to engage the state at both the local and national levels. Thiscan be best attributed to the current democratic dispensation, which, despiteits shortcomings, has provided the space for state-civil society engagement.Such an engagement is best seen in the context of the liberal-relationalapproach that views civil society as not just any nonstate and nonmarketactor or that civil society is in opposition to the state (Hearn 2001, 342).What emerges is a civil society construed “as part of what links the state tosociety more broadly, and as providing the channels through which peopleinfluence their states, and states cultivate legitimacy” (Hearn 2001, 340).This interaction “reinforces democracy by encouraging and entrenchingthe pursuit of sectional interest through generally agreed norms” (Friedman2003, 10).

Such a situation was best exemplified in civil-society engagement ofthe local government unit and the local government officials as well as


their engagement of the state at the national level, i.e., engaging the executiveand its bureaucracy, the legislature, and the judiciary. The nature ofengagement is formal and direct, e.g., through committees on tariffinvolving NGOs, as well as informal and direct, e.g., lobbying governmentofficials. Political opportunities are also present for civil society to engagethe state in an informal and indirect manner, e.g., the use of the media aswell as demonstrations.

The state is not monolithic. While industry players may tap key alliesin government, there will always be state functionaries who are insulatedfrom the pressure to provide for safety nets to industries, as in the case ofthe Benguet vegetable and garment industries. The allies may come fromlocal government officials whose communities are at risk because ofglobalization, or allies who are ideologically against globalization killingoff industries, or those who see that supporting the antiglobalizationmovement would mean electoral votes. These combinations were, forexample, seen in the Benguet vegetable industry, where “rifts among elitescould provide movements occasions to influence policy making” and “thepresence or absence of influential allies, such as the elite, could also havedirect impact on the movement’s actions.” This is mainly because “eliteallies possess resources and political influence that movements lack andcould serve as indirect channels of access in the system” (Tarrow 1994) aswas seen in the case studies.

The study also reveals that the industries that have more resources,e.g., the hog and telecommunications industries, are in a better position toengage the state because of the profits they bring to the economy. This iswhere the state has to come in to provide the balance by, for example,leveling the playing field. One consolation, though, for the marginal playersis that the competition between big industry players who are in conflictwith one another has provided a check and balance as seen in the hog andtelecommunications industries. Ironically, the check and balance does notcome from the state because of its patrimonial character, i.e., dispenser ofpatronage politics, which can be attributed to the elite capture of the state.In all these experiences, one witnesses not the retreat of the state but the

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state as a major actor of contention for the different civil-society playersaffected by globalization.

Nevertheless, the state is still the major arena of contention toconfront the adverse effects of liberalization. But despite the importanceof the state, it also has its limitations, as seen in its helplessness in theface of the FMD outbreak. Executive orders as well as the competenceof legislators also have their limitations. Furthermore, as the case studiesalso reveal, the hands of the state to go against the tide of liberalizationare tied, particularly in situations where it had already signed agreementsto open up the country’s economy. One, therefore, has to acknowledgethe presence of “exogenous factors that enhance or inhibit prospectsfor mobilization, for particular sorts of claims to be advanced ratherthan others, for particular strategies of influence to be exercised, andfor movements to affect mainstream institutional politics and policy”(Meyer and Minkoff 2004, 1457-58). And as for situations in whichglobalization brings about a positive effect as seen in thetelecommunications industry, the reality is that state regulation alonecannot provide the necessary countervailing force against market power.What is needed, therefore, is a fair distribution of market power parallelto the creation of an environment that discourages monopolisticbehavior. This can only be attained once socioeconomic inequalitiesare addressed, which will lead to the empowering of the majority.

Where does that leave civil-society players? As earlier noted in thegarment industry, much is to be gained from exploring political opportunitystructures at the international level, and this may also be true for the othersectors, which can learn from the experiences of others that have sufferedor will suffer the same fate. Transnational activism is on the rise and assuch, some issues, e.g., workers rights, have been mainstreamed intointernational policy making. There is also still much to be desired inempowering the stakeholders not only in terms of the need to organize butalso in terms of the resources available.

The anchor of all of these is the push for further democratization, i.e.,the enlargement of the space that would allow not only state-civil society


engagement but also state-civil society cooperation vis-à-vis the onslaughtof globalization.

Such engagement and cooperation have to take into consideration thesimilarities and differences in the impact of globalization on the varioussectors. The success of civil society in engaging the state has much to dowith taking advantage of the political opportunities and in mobilizingavailable resources in advocating what they perceive to be the best for thepublic good. Thus, much of the role of civil society is to monitor thechanges in political opportunity structures and to determine which amongthe various situations encourage or discourage their advocacy and, most ofall, discern when or how struggles could lead to actual reforms (Tarrow1994). As can be gleaned from the case studies, their success may meanincremental gains not only for their specific sectors but for the advancementof the country’s development and democratization process.

The long-term objective of all of these is to come out with analternative philosophy of development that does not separate theeconomic from the political as what neoliberalism does. The challengeis to come up with a philosophy of development that will not only beconcerned with bringing about a “trickle-down effect” of the fruits ofdevelopment but will immediately pour in the much-needed economicbenefits to the majority of the population. That is, it will have a biasfor the poor. This will come about only when one can be assured thatelite capture of the state will be eliminated and that economic policieswill be determined democratically with the participation of all thoseconcerned. All of these will be made possible not by the state and theadvocates of globalization but by a vigilant civil society, i.e., those whoare marginalized by neoliberalism, who against all odds have not losthope to bring about a just situation in which winners should always bethose who have less.

Because of the positive experience in the telecommunicationsindustry, can all these therefore be attained through “globalization witha human face,” i.e., “tackling the abuses of an unregulated capitalismwithout the need to alter its fundamentals” (Amin 2004, 221), or is

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this merely a transition phase to a move for “de-globalization,” if theexperiences of the vegetable, hog, and garment industries areuncontrollably replicated in the rest of the country’s industries? Thereseems to be some ambivalence on the part of civil-society players inthese three industries, and for as long as such a situation prevails, thestate will be the final arbiter between civil society and the forces ofglobalization. Such uncertainty also impacts on state-civil societyengagement, e.g., whether there should be more state regulation ornot. But what remains certain is, despite the ambivalence, merepalliatives will not be acceptable, and engagement will be pursued foras long as the adverse impact of globalization is felt, until there are nolonger excuses.

NoteNoteNoteNoteNote

1. Trade liberalization in the Philippines is defined as “lowering tariffs and liftingquantitative restrictions on hundreds of goods (notably, not rice); removing capitalcontrols to allow capital to flow unimpeded in and out of the country; andopening previously restricted sectors and industries to foreign ownership”(Abinales and Amoroso 2005, 245).


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IndexIndexIndexIndexIndex

229

AAAAAABS-CBN, 185Adiong, Blo Umpar, 41, 55Adviento, Annie, 133Advocates of Science and Technology

for the People, 176-77, 180AFTA-Common Effective Preferential

Tariff, 56, 84-86Agreement on Agriculture, 28, 31Agricultural Competitiveness

Enhancement Fund, 32, 46Agricultural Sector Alliance of the

Philippines, 94, 102, 105, 213-14

Agricultural Tarrification Act of 1995,also RA 8178, 28, 38

agriculture, 31, 86-87Benguet, 1, 20-24, 31, 37-38, 40,

44-46, 51, 56, 200, 209farmers, 22, 39, 42, 209

Agriculture and FisheriesModernization Act of 1997, alsoRA 8435, 39, 92-93, 208

Akbayan, 40, 212Aklan, 105Alliance of Legislators against

Regressive Taxes, 178Alliance of Progressive Labor, 136Alyansa Agrikultura, 40Alyansa Dagiti Pesante iti Taeng

Kordilyera, 27, 37-38, 212Alyansa ng mga Manggagawa sa

Garment at Textile (ALMAGATE),136

Amnesty International, 8

Angara, Edgardo, 101-2Anti-Dumping Act of 1999, also RA

8752, 31, 127Anti-Smuggling Bill, 55Anti-Smuggling Intelligence and

Investigation Center, 43Anti-Sweatshops Project, 122Aquino administration, 29, 94, 125,

163-64, 169, 202, 214Arroyo administration, 29, 52, 58, 103-

4, 125, 161, 169-70, 177-79, 188Arroyo, Mike, 103Association of Southeast Asian Nations

(ASEAN), 26, 74, 85, 112ASEAN Free Trade Area (AFTA),19, 74, 85-86, 119, 155

Asian Development Bank, 2Asian financial crisis, 6Asia-Pacific Economic Cooperation,

155Asis, Rey, 177Associated Labor Unions of the Trade

Union Congress of the Philippines,136

Atienza, Victor, 98

BBBBBBad-ayan Buguias Development

Multipurpose Cooperative, 44Bagong Alyansang Makabayan, 177Bagsakan Traders Association, 43bargaining, 1, 75Basic Telephone Program, 165Bataan, 98Batangas, 97, 105, 116


Bayan Muna, 35, 40, 126, 178, 212BayanTel, 165-66, 172, 184Bell Telecoms, 211Benguet, see agricultureBenguet Cold Chain Project, 41, 56Benguet Farmers’ Federation Inc., 37,

45Benguet Vegetable Commission, 37Benguet Vegetable Council, 37, 53Benguet Vegetable Distributors’

Cooperative, 36, 42Bilateral Textile Agreement, 117bonded warehouses, 103Briones, Nicanor, 102Bukluran ng Manggagawang Pilipino-

ALMAGATE, 125, 131, 134, 212Bulacan, 97, 102, 105, 116Bureau of Agricultural Statistics, 76,

100Bureau of Animal Industry, 98, 100,

103Bureau of Customs, 27, 42-43, 48, 53,

103, 106, 126, 137, 140, 142, 209Bureau of Labor and Employment

Statistics, 121Bureau of Plant Industry, 27, 40-42Bureau of Telecommunications, 162

CCCCCCabinet Oversight Committee on Anti-

Smuggling, 43Calimlim, Carlito, 100call center industry, 181Capiz, 105carabeef, 100-103, 105, 221Casiño, Teodoro, 178Cavite, 116cellular and mobile telecommunication

services, 160, 165, 202cellular mobile telephone system

providers, 164Central Luzon, 76Chikka Asia Inc., 170China, 26, 56, 112, 121-22Cinco, Emil, 176

Citizens’ Alliance for ConsumerProtection, 199

civil society, 1-3, 9-11, 20-21, 33-34,39-59, 73-74, 82, 91-94, 100,103, 105-6, 108, 123, 137-38,156, 167, 172, 175-76, 186, 198,202, 208, 211, 213, 215-16

class bias, 203-4Clean Clothes Campaign, 122, 203,

217Clothing and Textile Industry Tripartite

Council, 135, 141Co, Nemesio, 101-2Coalition for Consumer Protection and

Welfare, 199Cojuangco, Antonio “Tony Boy”, 164College Editors Guild of the

Philippines, 177Commission on Information and

Communication Technology, 161,170, 175, 188

Communist Party of the Philippines,201

Computer Professionals Union, 177,180, 187

computerization, 127Concepcion, Trixie, 177Concio, Joseph, 181confrontation, 186Congress, 28, 31, 38, 41, 48, 53, 102-3,

164, 169, 171, 187, 209, 215, 219Congressional Oversight Committee on

Agriculture and FisheriesModernization, 46

Connectivity Unlimited Resources Inc.,165

Consumer Union of the Philippines,199

Consumers Federated Groups of thePhilippines Inc., 199

contractualization, 119-20Convention on the Rights of the Child,

123Convergence Solutions, 182cooperatives, 38

Index 231

Cordillera, 52Cordillera Administrative Region, 21,

37, 97Cordillera Peoples Alliance, 27Countervailing Act of 1999, also RA

8751, 31

DDDDDdemocratization, 207-8, 220Department of Agriculture, 22, 37, 40,

43, 47-48, 53, 83, 95, 96Department of Labor and

Employment, 120-21, 129, 131,133, 139, 209

Department of Trade and Industry, 37,43-44, 49, 53, 131, 133, 139, 209

Department of Transportation andCommunications, 160-62, 166,170, 188

deregulation, 158, 179, 213developing countries, 115development, 28dialogue, 1, 75, 93, 176, 212Digital Telecommunications

Philippines, Inc., 158, 160, 165-66, 184

Disini, J.J., 183division of labor, 115domestic market, 142Domingo, Jed, 172Drilon, Cesar, 103Drilon, Franklin, 178

EEEEEEarly Bird Traders Association, 43Early Harvest Program, 56Earth Island Institute, 177Eastern Telecoms, 158, 185electronics, 117elite, 224

political, 51Escudero, Francis, 178Estrada administration, 29, 101, 172,

176e-Telecenters , 166

Evoserve, 182Executive Order 197, 45Executive Order 241, 29Executive Order 246, 29Executive Order 269, 16Executive Order 470, 94export processing zones, 115Express Telecommunications Co., 158,

160, 165, 184

FFFFFFair Trade Alliance, 40, 43, 118, 134,

142, 212farm-to-market roads, 22fast-food chains, 101Federation of Free Workers, 136feed millers, 81, 94, 213flexibilization, 143Fongwan, Nestor, 50, 210foot-and-mouth disease, 73, 96-100,

218foreign debt, 33foreign direct investments, 5, 111, 158Foundation for Media Alternatives, 175free trade, 27free-market economy, 5, 9free-trade zones, 115

GGGGGGabriela, 126, 177Galang, Loretta, 99garment industry, 1, 112-13, 116-17,

128, 133-34, 142-43, 197, 201,207, 209

Garment and Textile Export Board,123, 130,133, 138-40, 209

Garment and Textile Industry TripartiteConsultative Body, 131

Garment and Textile Industry TripartiteCouncil, 131

Garment and Textile Labor Council ofthe Philippines, 127

Garment, Textile and AlliedIndustries Labor Council, 125,134, 212


General Agreement on Tariffs andTrade-Uruguay Round, 19, 28, 34,37, 39, 46, 56, 87

Gintong Ani for the High-ValueCommercial Crops, 22

Giugni, Marco, 8global satellite systems, 156Global System for Mobile

Communications, 160globalization, 1, 5-10, 12, 43, 59, 74-

75, 81-82, 91, 94, 106-7, 117,126, 142-43, 167, 197, 203, 205,209, 216, 223, 220

Globe Telecoms Inc., 158, 160, 165-66,172, 176

governance, 205graft and corruption, 28, 126, 211, 216gross domestic product, 158

HHHHHHabito, Cielito, 3, 87-88High Value Crops Development Act of

1995, also RA 7900, 22hog industry, 1, 9, 73-76, 79, 81-82,

93, 96-97, 99, 103, 107, 197, 200,212, 221

hog raisers, 74, 91, 94, 97, 105, 207House of Representatives, 188House Resolution 834, 45House Resolution 879, 45House Resolution 894, 45House Special Committee on

Globalization, 46human resource management, 120hybrid seeds, 22IIIIIIloilo, 105Iloilo Hog Farmers Multi-Purpose

Cooperative, 93Imperium Technologies, 182importation, 20, 27-28, 41, 45, 74, 75,

96, 100-104, 197garments, 112-18pork, 84, 197vegetables, 23, 24, 36

Indigenous Peoples Rights Act, 39Industrial, Scientific and Medical

frequencies, 183industrialization, 197InfoBahn, 182Infocom Technologies, 155, 170, 182Information Technology and Electronic

Commerce Council, 181Innove Communications Inc., 158,

184Institute of Labor Studies, 120interconnection, 157, 162, 165, 167,

169intergovernmental organizations, 4,

220international financial institutions, 205,

217international gateway facilities, 164-65International Labor Organization, 123International Mobile Equipment

Identifiers, 168International Monetary Fund, 7, 33,

119, 217International Telecommunications

Union, 155, 183International Textile, Garment and

Leather Workers’ Federation, 123,133, 139, 141

internationalization, 115Internet, 170-72, 180-81, 215Internet service providers, 181-82, 185,

188, 206, 210, 219Isla Communications Inc., 158, 160,

165KKKKKKababaihan Laban sa

Kontraktwalisasyon, 126Kilusan para sa Pambansang

Demokrasya, 35Kilusang Magbubukid ng Pilipinas, 40,

212Kim, John, 38, 42, 50, 210Kintanar, Simeon, 182

LLLLL

Index 233

La Trinidad, 38La Trinidad Anti-Smuggling Task Force,

36La Trinidad Booth Holders Association,

43La Trinidad Trading Post Association,

36, 42-43La Trinidad Vegetable Supreme

Council, 43labor flexibilization, 120Labor Forum Beyond MFA 125, 131-

34, 141, 212labor

groups, 138, 140relations, 124sector, 136unions, 201

Lacson, Panfilo, 51Laguna, 97landlines, 167Lee Kuan Yew, 157letter-writing campaigns, 93, 212liberalization, 6, 9-10, 155-58, 162,

179, 201, 211-12Lim, Albert Jr., 100-102Limcoma Multipurpose Cooperative,

93, 102livestock, 79Livestock Association of Pandi, 102Livestock Development Council, 83local government, 36, 39-40, 51, 56,

59, 98Local Government Code, 208Lorenzo, Luis, 41, 103-4MMMMMMagsaysay, Ramon Jr., 46, 102MailStation, 182Malacañang, 104, 179, 188Marañon, Alfredo, 102Marcos administration, 29, 91, 163-64,

169, 175Margins of Preference, 87Martial Law, 21, 163, 201-2, 208Martinez, Clavel, 182Marxist-relational approach, 11

meat, 79, 83canned, 75imports, 88, 100poultry, 95processed, 75products, 96

Meat and Hog Dealers Association ofthe Philippines, 94, 104-5

meat holiday, 94, 102, 104, 214media, 134, 214

mass media, 180, 215media advocacy, 54

Medium-Term Philippine DevelopmentPlan, 29, 169, 186, 188

Mercado, Emil, 177Migrante, 177Millicom, 158Mindgate Systems , 182minimum access volume, 32, 88, 94-

96, 108, 203minimum wage, 143Ministry Circular 82-046, 163mobile phone roaming, 156mobile phone service centers, 168Molintas, Raul, 36, 50-51, 210Montemayor, Leonardo, 40-41, 50Mosaic Communications, 181-82most favored nation, 28Mountain Province, 24, 38, 44, 97Multi-Fiber Arrangement, 112-13, 117,

122, 125, 130, 137-38, 140, 209Multimedia Messaging System, 178multinational corporations, 6, 123Municipal Telephone Act of 1989, 164Municipal Telephone Projects Office,

164MyDSL, 183

NNNNNNational Anti-Smuggling Task Force,

43National Commission on the Role of

Filipino Women, 125National Conciliation and Mediation

Board, 129


National Confederation of Labor, 136National Economic and Development

Agency, 48, 161national elections, 44National Federation of Hog Farmers

Inc., 93, 95, 100, 104-5National Federation of Hog Raisers, 93,

101National Hog Raisers Group Inc.,

99National Labor Relations Commission,

125, 129National Meat Inspection Commission,

97National Statistics Office, 23National Telecommunications

Commission, 156, 161-62, 168-71, 182-88, 211

National TelecommunicationsDevelopment Committee, 164

National TelecommunicationsDevelopment Plan, 164, 170

National Tripartite Conference, 125,208

National Union of Students of thePhilippines, 177

National Vegetable Summit, 37National Wages and Productivity

Commission, 125nationalism, 128Nationwide Association of Consumers

Inc., 199Navea, Chodie, 131negotiation, 1, 75Negros Occidental Hog Raisers

Association, 100neoliberalism, 5, 28, 32-33, 39, 54,

204-5Neri, Romulo, 186Nippon Telegraph and Telephone

Corp., 158“no union, no strike” policy, 143nongovernment organizations, 7, 34,

40, 75, 82, 198Novelty Philippines, 131

Nynex, 158

OOOOOOffice International des Epizooties, 100Olea, Len, 177Ordoñez, Ernesto, 41-42, 50, 209overseas Filipino workers, 177, 213,

217Overseas Filipino Workers’ Laban sa

TextTax, 177Overseas Workers Welfare

Administration, 125

PPPPPPabi-GATT, 34Pag-IBIG, 129, 144paging, 164Palatino, Raymond, 176Pambansang Ugnayan ng Mamamayan

Laban sa Liberalisasyon ngAgrikultura, 38

party-list system, 125patronage politics, 204, 225people’s organizations, 188permit to import, 40Philcom, 158, 184Philippine Association of Broiler

Integrators, 95Philippine Association of Hog Raisers

Inc., 93, 102Philippine Association of Meat

Processors, 105Philippine Association of Private

Telephone Companies, 163, 184Philippine Cable Television Association,

185Philippine Chamber of Telecommunication

Operators, 184Philippine Constitution, 28, 91-92Philippine Economic Zone Authority,

129Philippine Electronics and

Telecommunications Federation,185

Philippine Internet Services

Index 235

Organization, 156, 176, 211Philippine League for Democratic

Telecommunication, 172-74Philippine Left, 126Philippine Long Distance Telephone

Company, 156-66, 172, 201-2Philippine Network Foundation, 182Philippine Peasant Institute, 34, 40Philippine Transport and General

Workers Association, 136Philippine VoIP Act of 2005, 182Philippines, 3, 7, 19, 23, 28-29, 56, 85,

87-88, 114, 116-17, 120, 124, 128,economy, 7, 10government, 29, 33, 47-48, 57, 96

“Philippines 2000”, 165Philippines Online, 182pickets, 139Pilipino Telephone Company, 160,

165-66, 184Plant Quarantine Law, 27political opportunity structure, 12, 212,

214, 220pork, 81, 95-96, 197

consumption, 79, 82, 99Presidential Commission on Good

Government, 164privatization, 5, 179public opinion, 218Public Telecommunication Entities,

171, 181Public Telecommunications Act of the

Philippines, also RA 7925, 167,171-72

QQQQQquantitative restrictions, 19, 27-28Quezon, 97Quick Response Teams, 131, 136

RRRRRrallies, 139Ramos administration, 29, 33, 49, 98,

165, 167, 172, 200ready-to-wear, 116Regional Wage and Productivity

Boards, 125Remulla, Gilbert, 174Republic Telephone Co., 163Reyes, Edgardo, 184rice, 21, 199Riverdale Biological Laboratories,

98root crops, 44Rosales, Loretta, 45, 50Roxas, Manuel “Mar”, III 43, 181,

209

SSSSSSacla, Wasing, 38, 50, 210Safeguard Measures Act of 2000, also

RA 8800, 31“Salad Bowl of the Philippines”, 21San Miguel Corporation, 185Santiago, Joseph, 179Sarmiento, Jorge, 186sectoral consultations, 93Securities and Exchange Commission,

102Senate, 95, 188, 210Senate Resolution 258, 45Senate Resolution 464, 45Service Area Scheme, 165-66service providers, 169Shinawatra, 158short message service, also “texting” or

text messaging, 160, 171, 178,188, 202, 215

Singapore Telecoms, 158Singson, Eric, 178Slaughterhouse Operators Association

of the Philippines, 94, 104-5Smart Communications, 158, 160,

165-66, 172, 176, 184smuggling, 26-27, 32, 36, 41-45, 55,

58, 74, 83-84, 96, 100-103, 137,142, 197, 205

Social Accountability International,123

Social Action Center, 38-39social relations, 36


Social Security System, 129, 137,140

Solidarity of Labor for Rights andWelfare, 126

Solis, Ronald, 185, 188Sony-Ericsson, 160Soriano, Teresa, 120Soro-Soro Ibaba Development

Cooperative, 93South Korea, 117Southern Luzon, 76state, 13, 50, 58, 75, 92-93, 186, 198,

200engagement, 9institutions, 208-9regulation, 167, 206state-civil society relations, 1, 10-

11, 20, 24, 55, 73, 75, 91,106, 124, 156, 168, 188,197, 220

State of the Nation Address, 177Stop the New Round Coalition-

Philippines, 35, 43Suarez, Danilo, 178sugar, 95, 199Supreme Court, 162, 165Swine Information Network, 79, 83

TTTTTTaiwan, 117Tañada, Wigberto, 40, 50Tapang, Giovanni, 176tariff, 27-28, 31, 44, 84

rates, 38, 43-45, 84, 209reduction, 26, 29, 51, 86, 118,

203reforms, 94

Tariff and Customs Code, 55, 84Tariff Commission, 41, 44, 46, 49, 53,

119, 127Tariff Reform Program, 29Tariff-Related Matters, 44, 49Tarlac, 102Task Force Blue Collar, 42technical cooperation, 188

Technical Education and SkillsDevelopment Authority, 128,140

telcos, 156, 164, 171-72, 178-79, 181-82, 184-85, 206, 211, 219

Telecommunication Users Group of thePhilippines, 184

telecommunications industry, 1, 10,155-57, 198, 215, 223

Telecommunications Office, 161-62“Telepono sa Barangay”, 164textile industry, 128, 134, 203

see garmentthird-generation (3G) services, 156,

165Torres, William, 181trade liberalization, 5, 19-20, 26, 31,

33-35, 44-45, 52, 55, 91, 118,197-200, 207

traders, 40-43, 56, 220, 221transnational corporations, 115, 143TxtPower, 156, 176-80, 186-87,

213

UUUUUukay-ukay, 113United Nations Development

Programme (UNDP), 2UNDP Bureau for Resources and

Strategic Partnership, 2United Nations Food and

Agricultural Organization, 73, 76United Nations Universal Declaration

of Human Rights, 123United States, 95, 114, 117United States Agency for International

Development, 7United Swine Producers Association,

100urbanization, 79Uy, Gabby, 102Uy, Johnny, 36

VVVVVvalue-added service, 170, 184-86, 211

Index 237

value-added tax, 213vegetable industry, 1, 19-22, 26- 28,

31-32, 34, 37, 40- 42, 44-45, 49-50, 55-56, 197-200, 205, 207, 215

Vicariate of Baguio-Benguet, 38Virtual Asia, 182Voice over Internet Protocol, 170, 176,

181-88, 206, 210

WWWWW“Washington Consensus”, 217welgang bayan, 124, 214Wi-Fi/Max, 170, 173, 183women, 204World Bank, 2, 7, 29, 33, 116, 200,

217World Summit on the Information

Society, 175World Trade Organization, 6-7, 26-29,

31, 33, 43, 46, 84, 87, 95, 112,

117, 119, 123, 127, 155, 169,200, 203

Worldwide Responsible ApparelProduction, 123

YYYYYYap, Arthur, 41, 218Yu, Jayson, 183

About the Authors

MMMMMa. Ga. Ga. Ga. Ga. Glenda S. Lopelenda S. Lopelenda S. Lopelenda S. Lopelenda S. Lopez z z z z WWWWWuiuiuiuiui is assistant professor at the Faculty of Education,University of the Philippines Open University, and formerly universityresearcher and deputy director of the UP Third World Studies Center.

TTTTTerererereresa S. Eesa S. Eesa S. Eesa S. Eesa S. Encarnacion ncarnacion ncarnacion ncarnacion ncarnacion TTTTTademademademademadem is associate professor at the Department ofPolitical Science, University of the Philippines Diliman, and director ofthe UP Third World Studies Center.

SSSSSharharharharharon M. Qon M. Qon M. Qon M. Qon M. Quinsaat uinsaat uinsaat uinsaat uinsaat is university researcher at the UP Third World StudiesCenter.

JJJJJoel Foel Foel Foel Foel F. Ariate Jr. Ariate Jr. Ariate Jr. Ariate Jr. Ariate Jr. . . . . is university research associate at the UP Third WorldStudies Center.

RRRRRonald M. Monald M. Monald M. Monald M. Monald M. Molmisa olmisa olmisa olmisa olmisa is a fellow and formerly university research associateat the UP Third World Studies Center.

people, profit, and politics - state-civil society relations in the context of globalization

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