social protection for the informals: transformation …...benefits, etc.) and labor relations...
TRANSCRIPT
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Social Protection for the Informals:
Transformation Challenges in the Philippines (FINAL Report, April 2014)
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Table of Contents
Introduction
A. Overview of the informal economy
Definitions and shades of meaning
Varying estimates
IE, poverty and inequality
Income generation
What the labor force statistics say
Inequality: massive and persistent
The establishment of the anti-poverty commission
B. A digression: Informalization of the formal labor market
Unionism on the retreat
From formal to informal
C. Identifying major workforce segments in the IE
Major segments of informal workforce
1. Landless rural poor
2. Home-based workers
3. Street vendors
4. Informal construction workers
5. Domestic workers
6. Informal transport workers
7. Semi-skilled general labourers
8. Unregistered home and personal service workers
9. Special segment: Casualized formals
Three-fold problems of IE workers:
Low incomes, job insecurity and missing social security
Numerous and complex problems facing each segment:
Illustrative case of Balingasa home-based workers
D. Labor law protection and the informals
Overview of the Labor Code of the Philippines
LCP’s labor relations and labor standards provisions:
Limited to regular formal sector workers
Efforts of DOLE to include IE in Labor Code coverage
Enactment of the Kasambahay law (RA 10361)
Applicability of protective labor laws
E. Government initiatives on social protection for the poor and the informals
Official definition of social protection
Problems in the delivery of social protection programs
F. Social and labor protection demands of IE organizations and CSOs
The formulation of DO 5
The rights-based approach to social protection
The MACWIE initiative
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The demand for integrated and comprehensive policy intervention
The PSPA framework
On labor law reforms
On general strengthening of social protection measures
On macro-economic policy coherence and social reforms
Varied TU/CSO initiatives on social protection
G. Coherence and Transformation
ANNEXES:
1. IE organizations and agencies consulted
2. Illustrative stories of IE workers
3. List of policy recommendations from IE organizations
REFERENCES
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Introduction
Under the Philippine Constitution, all workers are supposed to enjoy “full protection”
through “full employment”, “equality of employment opportunities”, and rights to self-
organization, collective bargaining, security of tenure, humane conditions of work and “a
living wage” (Sec. 3, Article XIII). The reality, however, is far different. The Labor Code of
the Philippines, promulgated in 1974, covers mainly the narrow formal sector of the
economy. Specifically, the laws on labor standards (wages, hours of work, employee
benefits, etc.) and labor relations (unionism, collective bargaining, dispute settlement, etc.)
apply largely to the formal sector workers because the enjoyment of such rights or
entitlements requires proof of the existence of formal employer-employee relations1.
This study is an inquiry on how workers in the huge informal economy (IE) can enjoy labor
and social protection under the law as envisioned and mandated by the Constitution. In
relation to this general objective, this study undertook the following:
✓ Analysis of the nature of employment in the informal economy. In particular, the
study tried to clarify the nature of work or livelihood or occupation pursued by key
segments of the IE because the appropriate policy response can only be developed in
relation to a) the character of the employment relations obtaining for those with
employer-employee relations, and b) the enabling market environment for those
managing micro or solo or family enterprises as self-employed informals or
unregistered entrepreneurs. Both categories are naturally affected by the
national/local policies, laws or rules established by the national and local
governments.
✓ Mapping of key labour issues confronting the IE in general and major IE segments of
the IE. The focus here is an inquiry on the labor and social protection concerns --
protection at work or workplace for workers and self-employed/micro business
operators, redress of grievances, voice in the workplace/market/business place,
job/income stability, social security, skills development, access to credit, etc.
✓ Compilation and documentation of existing legislative and administrative programs
and measures (including definitions and legal understandings) governing or affecting
1 Labor disputes in employment relations in the formal sector usually require a clarification of the existence of
formal employer-employee relations. Employers are able to escape or avoid obligations such as the payment of
minimum wages if they are able to prove that they are not the employers of the complaining workers; on the
other hand, unions and workers are able to claim compensation for unpaid benefits and the correction of any
abusive arrangement if they are able to prove that the erring employers are indeed their employers. Most of the
cases on the non-payment of employee benefits, non-regularization of workers (after the six-month probationary
period) and non-enrolment of employees in the Social Security System (SSS), or the non-remittance by the
employer of its share in the employee contribution to the SSS, involve a determination of the existence of
formal employer-employee relations. As a result, the Supreme Court has developed the four “tests” of the
existence of employer-employee relations, which essentially entail the determination of: 1) who hires the
worker, 2) who pays the worker, 3) who disciplines or imposes penalty on the worker for infractions of
company rules, and 4) who controls or supervises the worker in the performance of work. For more details and
illustrative cases, see Azucena, 2007.
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informal work and enterprises as well as pending legislative proposals such as the
proposed Magna Carta for Workers in the Informal Economy (MACWIE).
✓ Analysis of the appropriate labour protection framework for the IE given the results
from the foregoing as well as an assessment of comparable experiences of other
countries in dealing with informality at work and the challenge of developing labor
and social protection for the IE workers.
✓ Analysis of how social partnership and social dialogue can be nurtured in the IE in
the context of the ILO’s Decent Work Program. Focus is on how appropriate
consultation and dialogue mechanisms can be developed.
This study sought the views of IE organizers and CSOs advocating assistance to the IE
workers such as the Homenet Philippines, ambulant vendors’ associations and so on through
focus group discussions (FGDs). Interviews with key informants, e.g., leaders of these
organizations and government officials were also conducted.
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A. Overview of the informal economy
Definitions and shades of meaning
IE is used interchangeably with the term “informal sector” (IS) by advocates of social
protection in the Philippines. However, estimates of IE/IS vary given the absence of such
category in the labor statistical system as well as the varying level of appreciation by
estimators of what informal work means and who are the workers covered.
On the coverage of IE/IS, the sector is generally understood to cover collectively workers
who cannot find jobs in the limited and underdeveloped organized sector of the economy.
IE/IS work involves coping with the requirements of daily living, no matter how minimal the
income is from an informal economic undertaking, which includes hawking, home-based
production, unregistered repair services and so on.
The term “informal sector” or IS was embraced by the Department of Labor and Employment
(DOLE) in employment planning in the 1980s, courtesy of the Manila office of the
International Labor Office (ILO).2 The informal sector was then generally understood as
including any economic activity not registered formally with the government and, therefore,
not liable for taxes (see Ofreneo, 1994).
However, in 2002, the National Statistical Coordination Board (NSCB) adopted a more
nuanced definition of the informal sector:
The IS [informal sector] consists of ‘units’ engaged in the production of
goods and services with the primary objective of generating employment and
incomes to the persons concerned in order to earn a living. These units
typically operate at a low level of organization with little or no division
between labor and capital as factors of production. It consists of household
unincorporated enterprises that are market and non-market producers of
goods as well as market producer of services. This means these are owned or
operated by households engaged in the production of goods and/or services
that are not constituted as legal entities independent of the households or
household members that own them.
Labor relations, where they exist, are based on casual employment, kinship or
personal and social relations rather than formal or contractual arrangements
(cited in Labstat, 2008, pp. 1-2).
The NSCB classified “household unincorporated enterprises” into two categories: “informal
own-account enterprises” and “enterprises of informal employers.” For the Bureau of Labor
and Employment Statistics (BLES) of DOLE, this means the informal sector includes self-
employed or own-account workers without any paid employees, as well as unpaid family
workers. In a way, the informal sector is similar to another ILO concept of “vulnerable
2 ILO Manila shared the results of the ILO labor mission report on Kenya in the 1970s. The concept of
“informal sector” was propounded by Sethuraman (1981).
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employment,” which includes the unpaid family workers and non-employer own-account
workers.
Meanwhile, the ILO published a report entitled Decent Work and the Informal Economy,
which adopted the broader term “informal economy” to cover all economic activities by
workers and economic units that are—in law or in practice— “not covered or insufficiently
covered by formal arrangements” (ILO, 2002, p. 3). In the proposed House Bill 2295
providing for a “Magna Carta of Workers in Informal Employment,”3 the bill’s proponents
cites both the ILO and NSCB definitions of informal sector and the informal economy. HB
2295 includes a remarkably long list of workers considered to be in informal employment:
• Small farmers owning not more than three hectares, and rural and agricultural workers
serving as tenants, sharecroppers or laborers;
• Small fisherfolk/operators owning boats of three tons or less, and fisherfolk who have
no fishing equipment;
• Fish workers, porters and batillos (fish tub handlers);
• Home-based workers who are independent producers of goods or services;
• Industrial home-workers doing subcontracting work;
• Self-employed engaged by other contractors to do subcontracting work;
• Ambulant vendors or peddlers who ply their trades in search of buyers;
• Street vendors who sell their merchandise on streets and sidewalks;
• Vendors with stalls in public and private markets or with their own stores but with
operating capitalization of not more than a million peso (roughly US$23,000);
• Transport drivers, including “barkers,” fare collectors, dispatchers and other workers,
who share income with self-employed or unincorporated operators;
• Transport operators (of jeepneys, pedicabs, tricycles, taxis, etc.) whose capitalization
is not more than a million pesos;
• Unregistered and unprotected household domestic workers;
• Non-corporate construction workers, referring to those hired informally or through
subcontractors;
• Small-scale miners doing their own processing, including those with capitalization of
not more than a million peso,
• Workers of Barangay Micro Business Enterprises;4
• Non-corporate cargo handlers and allied workers;
• Waste pickers and recyclers;
• Workers engaged in producing seasonal products;
3HB 2295, now filed under the 16th Congress (2013-2016), was originally filed in the 12th Congress and re-filed
in the succeeding 13th, 14th and 15th Congresses. This means it has been languishing in Congress for over ten
years already given the three-year cycle of each Congress. However, advocates of the Magna Carta are
heartened by the adoption in February 2014 by the House Committee on Labor of the said bill and its supposed
submission to the House plenary meeting anytime in 2014-2015. In the February Committee deliberations,
House members proposing a similar Magna Carta agreed to have a consolidated bill based on HB 2295 authored
by Congressman Dan Fernandez.
4The BMBE law of 2002 seeks to promote the development of micro enterprises by exempting them from the
coverage of the minimum wage law and the application of tax on operations. BMBE stands for Barangay Micro
Business Enterprises.
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• Own-account workers doing repair and maintenance of equipment, appliances, etc.,
including beauticians, barbers and masseuses;
• “On-call” workers in the entertainment, movie and media such as bit players,
stuntmen, make-up artists, etc.;
• Volunteer workers in government receiving only allowances or honoraria such as the
barangay health workers and volunteers in non-government or people’s
organizations; and
• Unpaid family members, workers receiving allowances and seasonal workers in micro
enterprises and unincorporated household enterprises.
Interestingly, the above long list ends with a statement that states that the IE/IS includes:
“Other similar economic activities that are “not illegal, criminal or life threatening in
nature.”
Varying estimates
The IE/IS is huge and complex. However, estimates vary given the absence of formal-
informal categorization in the labor statistical system5 and the differences in the
understanding by different estimators of who are covered or not by IE.
The BLES-DOLE gives an IS estimate of about 41 per cent of the total employed of 36
million for 2010 (see table 1). This is also the BLES-DOLE figure for the ILO’s “vulnerable
employment”, defined as the total of the non-employing self-employed and the unpaid or
contributing family members. However, the estimate of the Employers Confederation of the
Philippines (ECOP) is much higher – a whopping 77 per cent of the employed, or 25 million
out of the 36 million employed in 2006 belong to the informal economy (see table 2)! The
higher ECOP estimate is due to the inclusion in their IE total of the “underemployed”, who
are assumed to be workers in the huge galaxy of micro, small and medium (MSME)
enterprises. As shown in Table 3, the micro enterprises (with 1-10 employees) account for
91.3 per cent of the establishments based on an NSO survey in 2005, contributing roughly
two million in employment. It is also important to note that the data shown in Table 3 is
limited to registered enterprises only; there are hundreds of thousands of unregistered micro
enterprises in the country.
Note that the BLES-DOLE estimation excludes the wage workers in all sectors and tends to
deviate from the broader official definition adopted in 2002 by the NSCB. The BLES-DOLE
estimation also excludes the informal “industrial workers”, for examples, those sewing
garments at home subcontracted by some garments exporters and manufacturers, production
and packaging of confectionaries and native delicacies at home, etc.
5 The National Statistics Office (NSO) carries out a quarterly sample survey of the labor force based on the
usual classification of the labor force – by employment (employed, unemployed and underemployed), by class
(paid, unpaid and own-account), by hours of work and by sector (industry, agriculture and services). Each
sector has sub-sectors, for example, industry has the following sub-sectors: manufacturing, construction, mining
and quarrying, and electricity, gas and water. However, there is no category called informal employment.
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Table 1.
BLES-DOLE count of formal and informal sector in the total employed, 1980-2010
FORMAL
SECTOR INFORMAL SECTOR
Year Wage & Salary
Workers
Own Account
Workers
Unpaid Family
Workers
Total Informal
Sector
1980 42.4 36.9 20.7 57.6
1985 43.8 39.7 16.5 56.2
1990 45.5 38.8 15.7 54.5
1995 46.2 39.0 14.8 53.8
2000 50.7 37.1 12.2 49.3
2005 50.4 36.9 12.7 49.6
2010 51.8 29.8 11.7 41.5
Source: BLES, DOLE.
Table 2. ECOP’s estimation of the
Number of IS workers, 2006 (in ‘000).
Indicator 2006*
Underemployed
Underemployment Rate
7,467
22.7%
Own-Account Workers
Employer
Self-Employed
% of employed
12,134
1,467
10,667
32.3%
Unpaid Family Workers
% of employed
4,038
12.3%
TOTAL
As % of Employed
25,151
77%
Source: Sergio Ortiz-Luis, Philippine Employer, May 2008. *Annualized average of labor force surveys.
Table 3.
List of establishments, 2005.
Number of
employees
Capitalization
(in million
Php)
Establishments Employment
Number % Share Number % Share
Micro 1 – 9 Less than 3 714,675 91.3 2,057,388 37.6
Small 10 – 99 3 – 15 62,811 8.0 1,363,007 24.9
Medium 100 – 199 15 – 100 2,851 0.4 384,295 7.0
Large 200 & above 100 & above 2,643 0.3 1,674,607 30.6
Total 782,980 100.0 5,479,297 100.0
Source: National Statistics Office.
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Overall, the BLES-DOLE estimate is an underestimation, while the ECOP’s figure appears to
be more realistic. However, one problem with the ECOP estimate is that it equates
underemployment, generally defined by the NSO as someone employed and yet still looking
for additional work, with informality at work. Of course, it is not difficult to assume that
majority of the underemployed are looking for additional work precisely because of the
marginal nature of work and income in the IE.
There is, however, a third estimate, this time calculated by Rosario Manasan and Aniceto
Orbeta of the Philippine Institute for Development Studies (PIDS). The study of Manasan
and Orbeta (2012) gives the highest IE estimation – 89 per cent of the total employed! They
arrived at this figure by using the non-existence of a written employment contract and the
non-application of labor regulations in the payment of benefits as the main criteria in
measuring informality, especially in relation to the wage workers. This approach is closer to
the 2002 ILO and NSCB definitions, which emphasize insufficient formality in work
relations. The data on the absence of employment contracts and the non-application of labor
regulations for the wage workers were estimates given by the National Statistics Office
(NSO) to Manasan and Orbeta. The following are interesting figures based on the study of
Manasan and Orbeta:
• About 91.0 per cent (9.2 million) of the self-employed (10.07 million) are informal;
• About 68 per cent of the employers are informal (2.4 million out of 3.5 million);
• As to the wage workers, per survey of the NSO, 40 per cent of 17.7 million wage and
salary workers in 2008 had only verbal contracts and an additional 23 per cent had no
contract at all. Hence, more than 76 per cent of the wage workers were informal.
Combining the above figures all together, Manasan and Orbeta concluded that the number of
informal sector workers constitute as much as 29.8 million (89 per cent) of the 33.5 million
employed workers in 2008 (Table 4).
The huge informal economy, whatever estimate (DOLE, ECOP or PIDS) is used, is a
clear reflection of mass poverty and limited job opportunities in the country. The
magnitude of poverty and the informal economy can be gleaned from the NSO data on
the labor force, particularly unemployment and underemployment. In 2010, the labor
force participation rate was registered at 64.3 per cent, meaning 39.9 million out of the
62 million working age population are in the active labor force (LF). About 37.1 million
(or 92.9 per cent) of the LF are employed, meaning the remaining 2.8 million are
unemployed or have no jobs (see table 5). The statistics also show that there are 7.1
million underemployed, or with jobs but are still actively looking for additional jobs.
There are 3.97 million “unpaid” family workers. And there are 12.65 million who are
working at less than 40 hours a week. In sum, more than half of the employed do not
actually have adequate and decent work.
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Table 4.
Employed persons by status of
employment and informality, 2008
TOTAL
Formal
Informal
Other
(‘000)
33,535
2,611
29,830
21,095
(Per cent
100.0
7.8
89.0
3.0
Self-Employed
Informal
Other
10,067
9,161
2 906
100.00
91.0
9.0
Employers
Informal
Other
3,545
2,356
1,189
100.0
68.5
31.5
Employees
Informal
Formal
Other
Domestic Helpers
Informal
Formal
17,725
13,553
2,600
2,189
1,572
1,561
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100.0
76.5
14.7
13.9
8.9
8.8
0.3
Unpaid Family 4,200 100.0 Source: Manasan and Orbeta, 2012
Table 5.
Select labor force statistics, 2010
Number Percentage
Working age population (15 years
old and above)
62 million
Labor force 39.9 million 64.3% of working age
population
Employed 37.1 million 92.9% of labor force
Unemployed 2.8 million 7.1% of labor force
Underemployed 7.1 million 19.1% of employed
Unpaid family workers 3.97 million 10.7% of employed
Working less than 40 hours a week 12.65 million 34.1 % of employed Source: National Statistics Office
IE, poverty and inequality
Most of the IS workers and families are people living on the margin. A few with special skills
who render unique but unregistered business services to different homes such as electricians
and plumbers are compensated well; however, the overwhelming majority of the informals –
self-employed, unpaid family workers and non-formal wage workers – are poor. The poorest
among them end up as “informal settlers”, who build makeshift houses (around 2x2-meter)
made of light materials on vacant private and government lands and dangerous spaces such as
river embankments, canals, etc. They have even developed communities of the living in
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public cemeteries. The Climate Change Congress of the Philippines or CCCP (2011)
identified the following among the poorest households:
• “kariton” households (people living on push carts, which double for informal
economic activities such as scavenging),
• Seawall households,
• Under-the-bridge and footbridge households,
• Dumpsite households,
• Hillside and mountaintop households,
• Cemetery households,
• Luneta households (Luneta is a big national park in Metro Manila) and
• Varied street households, which move from one alley to another.
The informal settler households constitute one-third of the Metro Manila population, per a
study by the Presidential Management Staff (Abad, 2011). However, the other two-thirds are
not necessarily well-off. Many are poor apartment dwellers, with the family living or
occupying small 3 x 3 meter homes or less.
Income generation
In terms of income generation, the CCCP identified the hagdaw households among the
poorest. These are families who come in after a harvest, i.e., glean or clean up leftovers such
as fallen rice stalks. The poorest also include the alm-seeking households, the slash-and-burn
farming households (usually in hillsides of public lands), charcoal-making households based
in remote hills and mountains, and the small-scale mining households, or those who do either
gold panning in mineralized rivers or “camote” (rootcrop) mining in hilly mining sites.
The CCCP also observed that many of the informal workers are mobile, meaning they move
from place to place in search of odd jobs on a seasonal and even day-to-day basis. For
example, the landless rural poor, who have no land rights and no fixed or regular jobs, maybe
seasonal agricultural workers one day (hired during planting and harvesting), coastal/river
fisherfolk another day, and construction aides in the cities in still another day. The landless
rural poor happen to be the most numerous in the countryside.
Similarly, the urban poor with no regular jobs also keep moving from one job to another, or
from one place to another in search of jobs. They are ambulant peddlers one day,
construction workers another day, and cargo handlers still another day.
A big group of informal workers are the home-based workers such as those who produce
handicrafts, toys, processed food, household accessories and numerous other products right at
home. During the heyday of the export-oriented garments industry in the 1980s and 1990s,
more than half a million workers were estimated to be home-based workers doing
subcontracted embroidery work or assembly of garments parts (Ofreneo, 2009).
In general, majority of the informal workers are engaged in varied forms of service provision
or delivery, e.g., domestic home work, backyard repair services, physical cargo handling,
hawking, sidewalk retailing, informal construction services, etc.
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What the labor force statistics say
Another way of examining poverty and informality is looking at the data of the NSO on the
labor force, particularly on unemployment and underemployment. DOLE and the
International Labor Organization (ILO) usually examine these data in relation to poverty.
As shown in Table 5 earlier, in 2010, the labor force participation rate was registered at 64.3
per cent, meaning 39.9 million out of the 62 million working age population are in the active
labor force (LF). About 37.1 million (or 92.9 per cent) of the LF are employed and the
remaining 2.8 million, unemployed or have no jobs. Some trade unionists are puzzled
because they consider the rate of unemployment still relatively low in relation to what they
know on the ground. The question, however, is: Are the jobs generated decent, adequate,
regular and of high quality?
In this connection, the statistics show that there are 7.1 million underemployed, or with jobs
but are still actively looking for extra jobs. There are 3.97 million “unpaid” family workers
and 12.65 million who are working at less than 40 hours a week. What all these figures tell is
that about 64 per cent of the employed do not actually have adequate and decent work. On
the other hand, majority of the fully employed are not regulars or have permanent job status!
Many are on short-term hiring arrangements, hired as either contractual or casuals provided
by recruitment/placement agencies (see discussion in next section).
Also, in the last 30 years, the unemployment situation has worsened rather than improved.
From a low unemployment rate of 4.9 per cent in 1980, it increased to 7.3 per cent in 2010. It
even soared at 11.2 per cent in 2000. It was reduced to a single digit in 2005, when the NSO
survey question was made terribly taxing for the respondent unemployed. To be
unemployed, one must be of working age, have no work, seriously looking for work, and
should job be available today, prepared to assume the said job. The statistical outcome:
lower unemployment rate in 2005!
On the other hand, the underemployment rates are virtually the same over the years since the
1980s. Although underemployment dropped below 20 per cent in 2010, about 2.6 million still
desire to have additional hours of work or additional job.
The growing unemployment and underemployment are indications that joblessness in the
country is becoming more and more massive. One out of three Filipinos is either unemployed
or underemployed. Because poverty is mostly a function of income, the massive joblessness
contributes to the deepening poverty in the country.
Table 6.
Unemployment and underemployment rates, in per cent (1980-2010)
Year Unemployment Underemployment
1980 4.9 21.7
1985 6.8 21.8
1990 8.4 22.4
1995 9.5 20.0
2000 11.2 21.7
2005 7.7 21.0
2010 7.3 18.8
Source: National Statistics Office, Labor Force Survey, various years.
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Inequality: massive and persistent
Philippine poverty is massive, pervasive and chronic – nationwide. And so is its twin, social
and economic inequality. Since Independence (1946), every Administration assumed power
based on a platform of poverty alleviation, reduction and elimination. And yet, poverty has
persisted and grown through the decades. One out of every four Filipinos is officially
classified as poor; unofficially, every other Filipino.
On equality, the latest Family Income and Expenditures Survey (2009) showed that the top
one (1) per cent of the families (185,000) had an income equal to the bottom 30 per cent of
the families (5,500,000). And the Gini Coefficient6, at .4484 has not changed since EDSA I7
(see Figure 1), and is the highest in ASEAN. Moreover, there is no clear or defined middle
class. The socio-economic structure consists of a small elite group on top of the population
pyramid and a large mass of the numerous poor at the bottom.
Figure 1. Gini Coefficient in the Philippines, 1985-2009
Source: Africa (2011).
Dr. Tomas Africa, former NSO Director, summed up the inequality situation in a powerpoint
presentation that went viral in 2010. After analyzing the NSO data from Edsa I to 2009, he
came out with the following conclusions –
• Despite the promise of EDSA I, inequality in the Philippines has not improved.
Income distribution among Filipino families remained as it was when the Martial Law
6A statistical measure where 0 represents total equality and 1 represents total inequality.
7 EDSA I refers to the 1986 “People’s Revolt” against the Marcos dictatorship, which paved the way for the
Presidency of Corazon C. Aquino.
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ended. The upper 50 per cent of families get 80 per cent of the national income, while
the lower half’s share has remained at only 20 per cent.
• In 2009, the top 1% of the families (185,000) have an income equal to the income of
the bottom 30% of the families (5,500,000).
Further, Africa observed that the present situation on inequality is virtually the same as it was
in the 1960s. Further, he wrote that there is “no visible middle class” in the Philippines.
The establishment of anti-poverty commission
Because of persistent and chronic mass poverty, the Ramos Administration established a
special Commission to coordinate anti-poverty policy formulation -- the National Anti-
Poverty Commission (NAPC). Per Republic Act 8425 of 1998, the NAPC mandates are:
▪ To ensure that social reform is a continuous process that addresses the basic inequities
in Philippine society, and that a policy environment conducive to social reform is
actively pursued;
▪ To act as the "coordinating and advisory body" that exercises oversight functions in
implementing the Social Reform Agenda (SRA) and ensure that it is incorporated into
the formulation of national, regional, sub-regional and local development plans;
▪ To institutionalize basic sector and NGO participation in managing the SRA cycle;
▪ To develop microfinance by establishing the People's Development Trust Fund
(PDTF) and strengthening the People's Credit and Finance Corporation as the
forerunners for microfinance services; and
▪ To strengthen LGUs so they can incorporate the SRA in their local development
efforts.
It also looks closely into the poverty situation of the following basic sectors:
▪ Farmers and landless rural workers,
▪ Artisanal fisher folk,
▪ Urban poor,
▪ Indigenous people and cultural communities,
▪ Workers in formal labor and migrant workers,
▪ Workers in the informal sector,
▪ Women,
▪ Children,
▪ Youth and students,
▪ Senior citizens,
▪ Persons with disabilities,
▪ Victims of disasters and calamities,
▪ Non-governmental organizations (NGOs), and
▪ Cooperatives.
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Note that the logic or basis in the classification of the “basic sectors” as outlined above is not
clear. Cooperatives and NGOs are essentially mass-oriented organizations, while the other
sectors are categories based on incomes or occupations/livelihoods, specifically the farmers,
landless rural workers, fisher folk, migrant workers, and workers in “formal labor” and
“informal sector”. Then there are the women, children, youth, students and senior citizens.
And finally, the “urban poor”, who may be wearing the faces of the different basic sectors is
also listed.
Nonetheless, the NAPC has been in place since the late 1990s, with the different basic sectors
listed above “electing” representatives in the Council. However, one basic limitation of
NAPC is its limited funding (since it is not a regular implementing agency). It also has
limited reach policy-wise although on paper it is supposed to be a policy coordinating agency
against poverty. Specifically, it has limited influence on the economic and social policies
being formulated and implemented by the other well-entrenched agencies such as NEDA,
Department of Trade and Industry (DTI), Department of Agriculture (DA), DOLE and
DWSD.
As to the informal sector, NAPC conducts from time to time consultations and discussions
on the situation and problems of both the formal and informal workers. However, the
Research Team is unable to secure any NAPC documents on the results of such consultations
and discussions.
One old NAPC study (2006) was its request on the NSO to provide estimation of poverty
incidence among the basic sectors. As shown in Figure 2, the highest poverty incidence is at
the fisherfolk sector (49.9 per cent), followed by the farmers (44 per cent) and children (40.8
per cent). The most numerous among the poor are the children (14.4 million), women (12.8
million) and urban poor (6.9 million). Poverty incidence and the magnitude of poor
population among the basic sectors increased between 2003 and 2006. Note that there is no
separate estimation for the informal sector although there is for the urban population.
17
Figure 1.
Official Poverty Statistics for the Basic Sectors:
2000, 2003, 2006
Source: National Statistical Coordination Board.
18
B. A digression:
Informalization of the formal labor market
A discussion of the IE is incomplete without discussing the “informalization” processes in the
formal labor market, which are often mentioned and denounced by trade unions. The formal
labor market is not only narrow because of the huge informal economy; it is also
“informalizing”. The latter is aided by the reality of jobless growth in the organized sector
due to the weak agro-industrial base of the economy and, yes, the availability of a large
reserve army of flexible labor from the informal economy. This informalization is dubbed by
trade unions as “contractualization” or “casualization”, which generally means short-term and
unprotected temporary hiring arrangements. A popular slang used for a short-term worker is
“Endo”8, whose employment contract has ended or bound to end in a short time.
The Philippine trade union movement, which is badly divided on many issues such as the
minimum wage, is consistently united on their uniform denunciation of the flexibilization
phenomenon that finds expression in various forms of flexible job hiring arrangements such
as the outsourcing or subcontracting of work, deployment of agency-hired (third-party-
managed) workers within the company’s work premises and/or direct hiring of workers under
short-term employment contracts.. This is why the union at the Philippine Long Distance
Telecom Company, formerly a big union with five-digit membership (now four digits)9, has
succeeded in building a broad-based labor coalition called “Kilusan Laban sa
Kontraktualisasyon” or “Movement Against Contractualization”.
Another big union, the Philippine Airline Employees Association (PALEA), has also
managed to get the support of various competing labor groups as well as the attention of
Philippine Congress on their bitter fight with the PAL management regarding the outsourcing
of 2,600 jobs occupied by regular workers who are also union members. Congress has been
conducting public hearings on the PAL-PALEA dispute and asking both sides to explain
what is the appropriate policy on job outsourcing. PAL management argues that
outsourcing.is a global trend and that the airline company cannot survive if it does not adopt
the same global work practice. On the other hand, the PALEA union argues that the workers’
basic union, job and collective bargaining rights are being violated by the outsourcing
measure, in violation of the Labor Code provision on security of tenure of regular workers.
Both sides raise legal arguments in support of their respective positions – PALEA cites the
Labor Code provisions protecting regular jobs, while PAL management cites Supreme Court
rulings and Civil Code provisions on “management prerogative”10 to outsource jobs as
8 An indie film maker even produced in 2011 a movie entitled “Endos”, showing the employment saga of a
contractual employee hopping from one job to another.
9 The union membership at PLDT, over 10,000 in the 1980s, has shrunk to only over two thousands due to
changes in technology, competition from the wireless telcos and outsourcing of the different phases of work
such as billing, collection, repairs, etc. to different outside service providers.
10 The general meaning of “management prerogative” is the right of an employer to manage business freely as
he/she sees fit. The only definitive limitations are existing laws and legal contracts. See Azucena, Employment
and Outsourcing Under Philippine Law, 2010.
19
needed or as required by “business exigency”. The PAL-PALEA dispute on outsourcing,
which led to a near paralysis in the PAL operations in late 2011 due to the militant labor
protest of PALEA, is the most explicit illustration of the fierce debates between unions and
employers on the issue of labor flexibility.
Unfortunately for the unions and many workers, the realities in the labor market are not too
kind on them. Informalisation or “flexibilisation” is widespread in the formal side of the
services, industry and agriculture sectors.
Flexibilization also takes varied forms. But the common underlying thrust is to put workers
under short-term employment arrangement, with the job contract ranging anywhere from one
week to less than three years. The latter (three years) is the usual length or duration of a
collective bargaining agreement (CBA), which explains why trade unionists complain that
they have less and less workers to organize for collective bargaining purposes. Moreover,
under the existing jurisprudence, non-regular workers are usually excluded from the scope of
the CBA coverage. The following are the different forms of labor flexibilization based on the
different studies conducted by Abrera-Mangahas et al. (1999) and Sibal et al. (2007):
✓ Hiring workers as temporaries or probationaries with no intention of regularizing
them. Are these workers formal or informal, or somewhere in between? The
probably correct answer is the latter. Under the Labor Code of the Philippines (LCP),
a company is allowed to subject workers to six-month probation, beyond which
he/she is entitled to regularisation if the job is “regular and necessary” to the business.
A company is also allowed to hire a casual worker; however, a year of accumulated
service, even if intermittent, means he/she is also entitled to regularisation. But what
happens is that some companies and placement and manpower agencies are putting
short-term workers on a “5-5 arrangement”11, meaning they are hired for only five
months without any intention of regularizing these workers. For manpower agencies
with a network of partner companies, these workers are simply redeployed in another
outfit for another five months; thus, they are able to avoid the legal requirement for
companies to regularize workers who have rendered at least six months of continuous
service as probationaries.
✓ Hiring workers as “project employees”. Under the law, the tenure of project
employees is co-terminus with the project they are assigned to, for example,
developing a cell site for a telecom company, whose completion is bound to happen
on “a day certain”. This is the usual and well-established system of hiring workers in
the construction industry, where work moves from one project to another. The
problem is that the concept of project hiring, which can be of longer duration
depending on the project (e.g., three years), has been adopted by non-construction
companies or industries, which simply package different aspects of work, e.g.,
assembly of one set of goods is treated as a project separate from the succeeding
assembly of another set of goods. In the booming CC/BPO sector, most of the jobs
are now under project-hiring arrangement. Today, project-based hiring is the norm
for short-term hiring. 11 The term “5-5 labor market” was coined by Dr. Ofreneo in his report on the labor market situation in the
garments situation in 1999. The report was part of the evaluation report by the Independent Monitoring Group
on the “Terms of Engagement” of the Levi Strauss with its contractor-producers in the Philippines. See Abrera-
Mangahas et al, 1999.
20
✓ Hiring of trainees. Under the law, companies can hire trainees, anywhere between six
months to two years, at compensation rates of 25 per cent below the minimum wage.
Some companies in the electronics assembly and auto parts industries are big users of
this scheme. In one big electronics company with around 20,000 workers, the ratio of
the apprentice-trainee is 19:1, meaning 19 apprentices-trainees for every one regular
employee (Ofreneo and Hernandez, 2010).
There are other flexible work and compensation arrangements (Kapunan and Kapunan,
2006). They include the following: work on a commission basis, meaning workers are paid
based on a percentage of the sales they make; “boundary” system, which is common in the
transport sector (drivers are supposed to turn over a fixed daily amount or “boundary” to the
transport owner (e.g., taxi) and appropriate to himself/herself whatever is the surplus; and
piece-rate system, meaning workers are paid on the basis of results (quite common in the
heyday of the garments industry). There are also seasonal workers, or those hired during
peak demands for business, e.g., production of Christmas decorations for the Christmas
season.
Unionism on the retreat
The negative impact of flexibilisation on unionism is palpable, as indicated by the declining
number of CBAs and workers covered. Table 7/Figure 3 shows that the post-martial law
period (1985 onward) has been recording continuing growth rate of union formations.
However, the overall membership declined sharply in 2001-2005, from 3,849,976 to
1,910,166 in 2005, or a dramatic negative growth rate of -50.38 per cent. As to the CBAs
and the workers covered by CBAs, the growth rate has been relentlessly going down since
1991, except for 2001-2005. The number of workers covered by the CBAs today range only
between 200,000 to 250,000, which is puny compared to the 36 million employed workers in
the country!
Overall, unionism is on the retreat. There has been a steady decline of unionization in both
the entire employed sector and among the wage and salary earners from 1990 to the present.
As can be deduced from the foregoing discussion, one ineluctable explanation is the
increasing flexibility in hiring arrangements, which make it doubly difficult for unions to
organize workers.
From formal to informal
The “informalization” of the work processes in the formal labor market also leads to the exit
of the casual workers from the formal labor market and their entry into the informal
economy. This usually happens to casual workers who reach the “vulnerable” hiring ages
between 40 to 60 years old. As Ludy Casana of the Federation of Free Workers put it, the
casual workers at this age bracket are “too young to resign and yet too old to be hired”. The
most vulnerable among these workers are the casuals doing simple repetitive jobs in the
manufacturing sub-sector and in the distribution (retailing/wholesaling) industry. Workers in
manufacturing who reach compulsory retirement ages of 60 to 65 have become a rarity these
days.
21
The stagnant and even declining performance of Philippine manufacturing under a more open
or liberalized economic environment has also pushed large numbers of formal sector workers,
both regular and casual, out of the formal labor market. For example, the biggest unions in
the Philippines in the 1970s up to the 1990s were in the textile and garment industries such
as Novelty and Aris, which had over 10,000 unionized workers each. With the collapse of
the textile industry in the 1990s and the garments industry at the turn of the millennium
(Ofreneo, 2009), most of the unions had disappeared. In other manufacturing industries, the
continuous processes of reengineering and “smart-sizing” (often leading to downsizing and
outsourcing) have made most of these industries very lean and even non-unionized.
Table 7/Figure 3.
Unions, union membership and CBAs, 1985-2010
1985 1990 1995 2000 2005 2010
Unions 1,996 4,636 7,882 10,296 17,132 17,644
Union Membership 2,117 3,055 3,586 3,788 1,910 1,681
CBA 1,086 4,982 3,264 2,687 2,793 1,434
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Source of raw data: DOLE Bureau of Labor and Employment Statistics.
22
C. Identifying major workforce segments in the IE and
the social and labor protection issues facing them
Now back to the statistics and categories of IE workers. As discussed earlier, there are
varying estimates of the IE size, different categorization of workers in the IE (as reflected in
in the proposed Magna Carta bill), and a dizzying array of work/livelihood conditions. At the
same time, there is lack of clarity on the appropriate legal and labor protection programs and
policies needed by the numerous informal workers to secure job stability and security at work
and work place, including social and labor protection. In this context, the Research Team
tried to identify major work force clusters or segments of the informals in terms of income
generation and livelihoods and list down the major work/workplace issues facing these major
work force segments. The general idea is to have a firmer basis for policy formulation for
key subs-sectors of the IE. For this, the Research Team met and consulted with key officials
of Homenet Philippines12, a national coalition of 25 informal sector organizations and CSOs
that have been campaigning for years, if not for decades, for the recognition of the rights of
IE workers. This consultation process was supplemented with focused group discussions
(FGDs) and interviews with leaders of informal sector organizations, trade union officials and
government agencies.
Major segments of informal workers
The major work force segments were identified by the Research Team and Homenet
Philippines based on two criteria: 1) the large number of workers involved in a segment or
sub-sector, and 2) the similarity or commonality of work and labor protection problems these
workers are facing within each identified segment. Given the paucity of reliable statistical
data, the identification or listing here of the major segments is based on the collective
assessment by the Research Team, Homenet Philippines and select trade union and other
CSO representatives.
1. Landless rural poor
The landless rural poor are rural-based workers who have no land rights because they have no
lands of their own nor do they have formal access to any farm since they are not tenants nor
are they beneficiaries of agrarian reform. They are usually 2nd- or 3rd- or 4th-generation sons
and daughters of small farmers, tenants and agrarian reform beneficiaries (who usually get a
hectare or less). They are the fastest-growing group in the countryside because of population
explosion and the limited job opportunities in the urban and rural areas. Hence, they tend to
move from place to place in search of odd jobs such as seasonal agricultural work, gold
panning, construction work, etc.. Hence, they constitute a large portion of the domestic
“floating worker population” (separate from the overseas migrant workers).
12 The coalition includes the following: Aksyon Kababaihan, ALMANA, Batis-AWARE, Damayan, DSWP,
Ilaw ng Tahanan, Inc., KASAMBAHAY, KaBaPa, MAKALAYA, MAGISSI, NKPK, PKKK, PATAMABA,
RISC-BSK, SANGKAMAY, WISE, WISEACT, ACIW, ASAPHIL, Bulacan-Taytay Garment Association,
MASA, NUBCW, PANDAY, PAMAKO, SANCOWA and SULA. See Annex A for list of organizations
consulted.
23
In Central Luzon, some join the cabecilla labor gangs13, which do harvesting and planting of
crops such as sugar and rice in different towns. The landless rural poor can be coastal/river
fishermen today, construction aides tomorrow, farm workers the day after, and gold panners
the week after. Because land is limited and jobs in the cities are also limited, the landless
rural poor tend to multiply exponentially.
It is fairly obvious that the most important concern of the landless rural poor is the weak
demand for jobs. This demand can only grow if the government and private sector, both at the
national and local levels, are able to create an environment conducive to the growth of
industry, services, agriculture and even government services. This, therefore, requires better
macro-economic management at both the national and regional levels as well as do necessary
stimulus spending to create jobs, for example, cash transfer for work to do community-based
adaptation measures to combat climate change risks utilizing the ILO-intensive mass-based
infrastructure development.
On the supply side, the government and the private sector can help the informals, many of
whom possess limited education, acquire new skills and knowledge so that their marketability
in the labor market can be enhanced and the jobs that they can apply for or the livelihoods
that they can establish are not the low-value-adding low-income-generating types. In the case
of those engaged in municipal-level fishing or acquaculture, the challenge is how to enhance
their capacity to manage acquaculture production and fish marketing through higher
capitalization and business competency.
A special concern of the landless rural poor is the poor social and economic outcomes of the
25-year old Comprehensive Agrarian Reform Program (CARP). Weak implementation
means the agrarian reform beneficiaries (ARBs) eventually join the ranks of the landless
rural poor instead of creating job opportunities made possible by the successful farming
initiatives of ARBs. For ARBs who have been successful in acquiring land rights, the
problems are the lack of support services, high cost of farm inputs and basic commodities and
lack of capital.
After Yolanda hit the Visayas or central Philippines on 07 November 2014, the landless rural
poor in the Visayas swelled in number while the jobs market literally shrank. The Research
Team was able to interview a number of women in devastated Estancia, Iloilo, who have
been forced to join labor gangs in sugar and other farms to do weeding and planting at a
fairly low rate of compensation of P100 a day (less than US$2.00) for each worker. Their
forlorn husbands have lost their bancas and fishing gear. The irony is that the bigger
complaint of these women workers is not the low compensation per se but the lack of
available jobs.
2. Home-based workers
The Research Team has identified three types of home-based workers:
a. The “entrepreneurial”. To survive and augment limited family incomes, members of the
family, mostly women and out-of-school youth, transform their homes into mini factories,
13 Cabecilla is a Spanish term for labor gang leader.
24
producing varied products such as processed meat and delicacies (for distribution in offices
or in flea markets), handicrafts and bags, etc. The “entrepreneurial” home-based producers
can be found all over the country, doing production quietly, often beyond the radars of the tax
collectors. Their problem begins when they step outside because their goods have to compete
with cheaper competing products, a growing number of which are smuggled goods processed
overseas, in a globalized and liberalized domestic Philippine market. For example, how can
sandal makers with limited capital and utilizing more expensive sandal parts compete with
the mass-produced Chinese sandals, which are dumped in the Philippines sans duties/taxes?
b. The “industrial workers”. This group of home-based workers was fairly big at the height
of the export-oriented garments industry in the 1980s and 1990s. In these decades, over half
a million home-based workers were reported to be linked to the industry as embroiders and
part sewers under a system of job contracting involving the exporter, factory, facilitating
agents and overseas importers/retailers. Today, the export-oriented garments industry has
faded and the once robust system of embroidery and parts subcontracting has virtually
disappeared, due partly to the collapse of the industry as well as the impact of computer-
guided embroidery work. However, some garments sewing is still being outsourced, mainly
to assemble products for the domestic market such as school and office uniforms and rags
sold on the streets. Products produced by home-based workers under job contracting are
supposed to be covered by minimum wage standards (on piece-rate work) but these are
hardly observed, as seen by the Research Team when they visited a community of rag sewers.
On the other hand, the sewers for the rags and uniforms are unable to negotiate for higher
piece-rate compensation because the agents or contractors outsourcing the work can pull out
the job and outsource it elsewhere. In sum, the home-based workers’ common laments are:
limited job orders, limited share of the value created in terms of higher compensation, and
limited capital to expand/diversify business and modernize operations (e.g., from foot-driven
to electric machine sewing).
c. The “combined industrial/entrepreneurial” workers. In reality, most of the home-based
workers are prepared to shift from industrial to entrepreneurial work and vice-versa
depending on the availability of industrial jobs being offered and the opportunities for income
generation via home-based production of marketable goods. Some do both, while others do
industrial before sliding back to entrepreneurial when there is slack in outsourcing work.
3. Street vendors.
Like the landless rural poor, the street vendors are part of the “floating worker population”
for literally they live and move around the streets. There are three major categories of street
vendors identified by the Research Team and Homenet Philippines:
a. Vendors and stall holders occupying sidewalks and parts of the streets. One persistent and
debilitating problem is the lack of security of these vendors at the workplace, which happens
to be a public area, declared by the courts as “beyond the commerce of man”. And yet, the
reality is that many vendors set up stalls and moveable vending tables right on the streets and
sidewalks, often in street corners and/or as “extensions” of public markets and private malls
and department stores. Local government units (LGUs) and police are aware of the
prohibition but they allow the vendors to set up folding tables and stalls because they are able
to collect, informally, “tongpats” (slang for “grease money”) of roughly P100 a day in Metro
Manila or US$2.00), on top of the official “permits” given by the LGUs and/or village
25
councils costing about P20.00/day or more. Some “high-ranking” LGU/police officials
sometimes require these vendors to buy items sold by the LGUs/police themselves such as
umbrella -- all allegedly for the protection of the vendors who already have their own
umbrellas! Such a system naturally limits the profit margins of street vendors and
stallholders. These profit margins are made even slimmer by the high cost of short-term
borrowing. For example, if a vendor borrows from the money lender operating in the street
market an amount equivalent to P1,000.00, he/she has to pay P50.00/day on top of the agreed
20 per cent interest upon full payment. This system of daily charging, on top of the high
interest, is called “balikwas”. Finally, the street vendors and stallholders increasingly find
competition from air-conditioned malls selling cheap imported goods difficult to counter.
Where then do these vendors and stallholders can go? The answers of those interviewed by
the Research Team: “We do not know”. One suggestion is for LGUs to arrange for “night
markets” on the streets at certain hours of the night, when traffic is light. Another suggestion
is to have weekend flea markets in certain streets.
2. Ambulant vendors. Vendors selling small items like cigarettes, candies, nuts, bottled
water, fans, etc. are ubiquitous sights during traffic jams and in crowded street corners. Other
vendors selling household items like kitchen ware and food items like tofu go from street to
street, village to village. Their biggest problems are pollution, risk of meeting an accident
and, from time to time, fleecing by the police and neighbourhood gang protectors. But
somehow many survive the daily grind of trodding the concrete pavements of cities. They
are, however, difficult to gather in meetings and organize like the street-based stallholders.
3. Long-haul vendors. These are vendors who board provincial buses selling peanuts, snacks,
bottled water, etc. on board provincial passenger buses. They board in one town or stopover
and alight in the next stopover and return. Another group of long-haul vendors are those
pulling ox-driven carts selling household items and native furniture in different towns. Like
the city-based ambulant vendors, these long-haul vendors face daily the problems of
pollution, risk of accident and frisking by police and neighbourhood toughies.
The working hours of these different vendors vary depending on the saleability of their goods
and profitability of their operations. But generally, most work for a minimum of hours up to
a maximum of 15 or more hours.
4. Informal construction workers.
These are workers with limited formal education (basic education mainly) who have
developed some skills in construction by working as assistants (often called peons) of the
skilled and trade-certified carpenters, masons, welders, electricians, plumbers and so on. A
few have become highly skilled themselves through the years of exposure to construction
work without getting any trade certification because of limited schooling and literacy. Like
the home-based workers, informal construction workers can be found all over the country.
Their problems have also been documented by trade unions belonging to the Alliance of
Construction Industry Workers (ACIW) and the Philippine affiliates of the Building Workers
International (BWI). These include the following: the seasonal demand for their services, the
declining demand for services of the aging construction workers, the lack of any clear
employment contract in doing short-term projects, the inability of informal construction
workers to secure skills certification from the Technical Education and Skills Development
26
Authority (TESDA), and their inability to bargain for lawful benefits and compensation
unless they are highly skilled.
The high level of fatal accidents at Hanjin ship repair services at Subic has prompted the
Philippine Congress to inquire on the health and safety conditions affecting workers under
the labyrinthian subcontracting system in the construction industry. DOLE has a Department
Order No. 13, issued in 1998, requiring employers to provide workers with protective
personal equipment (PPE), establish health and safety committees and allow local
government units and other agencies to inspect their work facilities. This, however, is not
being observed by many construction firms, most of which have limited knowledge of DO
13.
5. Domestic workers.
In January 2013, the government enacted Republic Act 10361 “instituting policies for the
protection and welfare of domestic workers”. The new law was an offshoot of the ILO’s
adoption in 2011 of Convention 189 on “Decent work for domestic workers”. The
Convention was pushed by the Philippines in the ILO in support of overseas Filipino workers
serving as maids in East Asia (Hong Kong, Singapore, Malaysia, Brunei, etc.), Middle East
and other parts of the world.
However, the enforcement of RA 10361 in the Philippines will probably take much longer.
The law mandates employers of domestics to observe a number of labor standards for the
domestic workers such as a minimum wage, weekly rest day, enrolment in the Social Security
System and so on. The problem is that many of the local employers are low wage earners
themselves who are unable to meet all the requirements of the new law. One of these
requirements is a written employment contract. Hence, the informality of the employment
arrangement has persisted by and large. CSOs and trade unions involved in organizing
domestic workers complain that the weak enforcement of the law erodes the progressive
content of the said law. One organizer of domestics interviewed by the Research Team
revealed that some employers would immediately fire or terminate the services of their
domestics when the employers are shown samples of model employment contracts.
6. Informal transport workers
Informal transport workers are non-registered transport operators and workers, utilizing
mainly non-motorized bikes with side cars called trisikad (tricycle moved by pedalling) and
motorcycles called habal-habals (motorcycles with elongated boards on top to accommodate
as many passengers). The latter are usually used in the rugged rural areas. Like the ambulant
peddlers and informal stall vendors, the informal transport workers are harassed by local
officials and policemen. In an interview with a group of trisikad drivers, the Research Team
learned that like the street-based stall holders, they are monitored by the LGUs. Their
operators pay an annual fee of P330 for every side car attached to the bike. For work lasting
about 15 hours a day or more (from 5 am to 10 pm), they earn a pittance of P200/P250 a day.
Given the pollution and the fact that their own legs are powering the bikes, such a long
working time means they are putting their health at risk. In fact, there are only very few old
bikers. Aside from the low income, the usual complaint of the informal transport workers:
panginginig ng binti (shaking leg syndrome).
27
The operators and drivers of the ubiquitous jeepneys, taxis and motorized three-wheeled
tricyles are considered by those consulted by the Research Team as part of the informal
economy. The reason: these operators and drivers are not “sufficiently” formalized, for
example, most do not report on incomes and pay taxes, are not registered with the SSS and
Pag-Ibig and have no written employment contracts. Incomes of the drivers (if they do not
own the jeepneys, taxis and tricyles) are based on the “boundary system”, that is, operators
simply ask the drivers to remit a fixed minimum per day, for example, P1,500.00 in the case
of taxi drivers, in exchange for the use of these vehicles. The formality comes in mainly in
the registration of these vehicles with the Land Transport Office and the Land Transport
Franchising Regulatory Board.
In addition to the above, there are complaints about the “colorums” among the foregoing
transport vehicles as well as buses. The colorums are the non-registered vehicles, which
usually ply the streets at night or borrow the plates of registered vehicles. The work situation
in colorum vehicles is considered awful because it is hardly regulated. The colorums are
blamed for fatal accidents in Metro Manila and other urban ares.
There are also the private vans, which offer transport services, to ship and plane passengers.
Transactions here are strictly private and unregulated. Hence, the work conditions of
drivers, who are sometimes the van owners themselves, are unmonitored.
7. Semi-skilled general laborers
There are unskilled and semi-skilled labourers who accept and do varied manual jobs such as
serving as porters in the ports, aides in construction projects, messengers, personal
bodyguards, all-around assistants of informal stall holders and other non-technical posts
under semi-formal employment arrangements or contracts. Usually, they are recruited and
organized by labor gang leaders. There is no permanency in their jobs nor security at work
given the informality of job arrangements and the absence of written employment contracts.
The gang leader, who looks for job contracts, is revered like a demigod, while a committed
employer who holds on to the services of a laborer, treated like a patron saint. Work of
labours are usually flexible and sometimes literally back-breaking because of heavy physical
exertions such as lifting of heavy materials or cargoes.
8. Unregistered home and personal services
Finally, the Research Team and Homenet Philippines concluded that a major segment of
informal workers are those providing varied home and personal services, ranging from
laundry and cleaning to manicure and home service massage, appliance repairs to home
repainting, from private tutoring to dog handling, etc., etc. There are so many home and
personal services that the government is simply unable to monitor, much less tax. In the first
place, most of the transactions are informal in character based on informal or semi-formal
contracts (usually oral or written in pad papers) on the engagement of the services of the
informal service providers. Some of the service providers may include providers of sexual
services, which should be the subject of a different study altogether.
28
Given the informality of the process and the lack of any government monitoring and
intervention, the transactions may be fair or not to the informal service providers in terms of
compensation and so on. However, since the transaction is informal it is also easy for the
service providers to quit anytime. One problem faced by home and personal service
providers is the problem of aging since the demand for their services tend to decline as their
ages advance. But then this is a general problem for most of the IE workers, including the
casuals in the formal labor market.
10. Special segment: Casualized formals
As discussed earlier (under Section B), the casuals or informals in the formal labor market
outnumber the regulars in this sector. In a way, the casuals in the formal sector constitute a
distinct segment of the informal economy, especially if one adopts the broad definition
adopted by Manasan and Orbeta.
Three-fold problems of IE workers:
Low incomes, job insecurity and lack of social security
Regardless of the segment they occupy, IE workers generally face three-fold problems: low
incomes/wages, job insecurities and lack of social security. The low incomes/wages are
associated with the low valuation of the services the IE workers deliver whatever the
occupational faces they are wearing. This is reinforced by the reality that the buyers of their
services are either informal enterprises themselves or formal institutions which do so
surreptitiously sans official blessings in terms of tax receipts and so on. As to the job
insecurities, the brief description of the situation of the eight categories or segments of the IE
labor force outlined earlier all indicate the lack of security for the work the IE workers do
such as sewing for outside contractors, selling to a fast-changing market, cleaning home for
an erratic employer, doing repair work for a suspicious car owner, tilling a flood-prone farm,
and so on and so forth.
Finally, majority of the IE workers do not enjoy any formal social insurance, the lack of
which is rooted precisely in the informality and uncertainty about their work. Most of the
members of the government-run Social Security System (SSS) are workers with clear
employer-employee relations. Under the SSS law, all enterprises are mandated to enrol their
workers to the SSS and to share in the cost of an employee’s premium contribution. In 1997,
the SSS law was revised to allow coverage of self-employed workers, agricultural workers
and household helpers. And yet, 10 years after or in 2007, the percentage of the active SSS
members belonging to the self-employed and agricultural workers reached only 20 per cent,
with the formal wage workers constituting 80 per cent of the total. As to the government
Philippine Health Insurance (Philhealth), which was created in 1995, there has been some
progress in membership expansion covering the “vulnerables” and “indigents” because of
social and political pressures put on various Administrations. However, the major lament of
IE organizations and CSOs is the limited range of services covered by Philhealth. For
example, outpatient consultations are not covered and the participating hospitals and clinics
are also limited.
29
Numerous and complex problems
facing each segment:
Illustrative case of Balingasa IE home-based workers
The reality is that each IE workforce segment and the whole IE labor force are facing
numerous and complex problems. The three-fold problems outlined above are only a
summary reflection of a host of complex and numerous problems facing each segment. In
Balingasa, a depressed village in Caloocan City, Metro Manila, the Research Team had a
half-day discussion with home-based “industrial” women workers doing outsourced sewing
work for local rags distributors. Several participants were home-based “entrepreneurs”
producing processed meat and other products for the outside market. Some are doing both
outsourced work and home-made products. This discussion was supplemented with
interviews with individual officers of the women’s association.
Many of these women suffer from scarcity of jobs and job orders and extremely low
compensation rates for the rags they assemble. These problems eventually affect daily
consumption patterns, education of children, well-being of family, etc. The following is a
listing of the problems they themselves have identified:
Financial (work- and income-related)
Limited orders
Low productivity due to antiquated sewing machines
Limited work hours because sewing machines are borrowed from or shared with
others
High cost of rental for production equipment
High cost of commodities and raw materials
Low price of finished products
Low income (a full day’s work nets women sewers only a third of the minimum wage
or less (MManila minimum wage is P500.00 daily versus informal sewers’
income of P150 to P200 maximum for a day’s work)
Lack of capital/fund for small business resulting to stoppage of business operations
Inability to buy raw materials in bulk/volume due to lack of capital
Lack of additional capital to increase production
“Credit pollution” (many aggressive lenders with aggressive collection tactics)
Lack of credit assistance with low interest rate
Lack of access to government financial programs/services
(particularly credit facilities) for small enterprises with low interest rate
Delayed payment for finished subcontracted work/products, aggravated by lack of
written agreement
Non-repayment/delayed repayment of customers on credit basis
Very low payment/wages for home-based work
Lack of alternative source of income/alternative skills
Product/price competition
Financial (family-related)
Lack of financial resources for everyday consumption of the family and monthly
payment of bills such as water and electricity
Inability to send children to college (up to free public secondary education only)
30
On social protection
No social protection in place
Lack of free consultation and treatment for poor & marginalized HBWs in
emergency under the Philhealth system
Problems with SSS/ PHILHEALTH coverage and membership
Limited education for children (high dropout rates)
Product-related
Lack of regular market outlet for products produced
No job-out from subcontractors due to lack of raw materials/product
Seasonality of work/products
Unsold products are stocked; no customers due to oversupply in the market
Health and safety issues
Noise pollution in the community (overcrowded place)
Air pollution (due to chemical ingredients exuded by a neighboring manufacturer of
zonrox)
Small & crowded work station/place of work
Crowded space inside the house (where work is done) due to extended family and
limited housing space
Lack of toilet inside the house for some households
Clogged drainage
Lack of water supply
Other concerns
Multiple burden inside the home (too many household chores)
Over-fatigue due to multiple tasks at home
Lack of knowledge and skills to run small business
Annex B illustrates the life stories of select IE workers.
31
D. Labor law protection and the informals
Can the informals be covered and protected by the formal labor law system? The following
is a brief review of the formal labor law system in place and a brief assessment too of the
feasibility of expanding the labor law system to protect IE workers.
Overview of the Labor Code
From the 1930s to the 1960s, the Philippines developed a rich body of labor protection laws,
partly due to the American influence and partly due to the Philippine membership with the
ILO after World War II. These laws were codified in 1974 into a Labor Code of the
Philippines (LCP). This is separate from the special laws dealing also with labor concerns
such as the Social Security Laws (SSLs). The LCP consists of “seven books” -- Book One
on Pre-Employment, Book Two on Human Resource Development, Book Three on
Conditions of Employment, Book Four on Health, Safety and Social Welfare Benefits, Book
Five on Labor Relations, Book Six on Post-Employment and Book Seven on Transitory
Provisions. Books Five and Six are the “labor relations” books for they deal with laws on
unionism, collective bargaining, dispute settlement, tenure and termination of employees.
Books Three and Four are the “labor standards” books for they deal with wages, hours of
work, occupational health and safety standards and so on. The above labor laws are
supplemented by the Implementing Rules and Regulations for the LCP and SSLs. These
rules serve as guide in the enforcement and interpretation of the labor laws. Rulings on labor
disputes made by the court system also provide guidance on the interpretation and observance
of the labor laws. Final labor rulings or decisions, particularly those made by the Court of
Appeals and the Supreme Court, collectively constitute what is termed as Philippine labor
jurisprudence.
Even before its ratification of ILO Convention Nos. 87 and 98, the Philippines had already
embraced collective bargaining as the main thrust in industrial peace promotion, this through
the enactment of the Industrial Peace Act (IPA), also commonly known as the Magna Carta
of Labor (Republic Act 875). Enacted on 17 June 1953, the law was a response to the labor
unrest that gripped the country in the late 1940s. Inspired by the American legislation (Taft-
Hartley Act) on unionism and collective bargaining, the IPA gave full recognition to the right
of workers to form unions and engage in collective bargaining (Ofreneo, 1993). These rights
were backed up by the legal provisions against “unfair labor practices” that subvert the twin
institutions of unionism and collective bargaining such as employer interference in any union
organizing or employer refusal to bargain in good faith.
After the ouster of the Marcos regime in 1986, industrial democracy was revived or renewed
along with the restoration of the country’s political democracy. In 1987, the Philippines
adopted a liberal democratic Constitution which reflects the country’s commitment to basic
labor rights.
32
LCP’s labor relations and labor standards provisions:
Limited to regular formal sector workers
From the foregoing narrative, it is clear that the Philippines has a relatively well-developed
and long history of labor and social legislations. In fact, some of its protective labor laws
such as the eight-hour labor law and the right of an individual worker to file a labor
complaint (through a Court of Industrial Relations) were enacted way back in 1936. As to
the ILO Conventions on freedom of association and collective bargaining, the Philippines
was also one of the early Asian ratifiers.
And yet, something is terribly missing in the LCP – the rights of informal workers are not
formally acknowledged. This collides with the proviso of the Philippine Constitution
mandating “full protection” to labor. The charter recognizes the universal or core labor rights
as rights to be enjoyed by all workers. Section 3, Article XIII, of the charter states that the
State shall:
“…guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with the law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.”
The LCP’s labor standards and labor relations provisions cannot be applied to informal
enterprises or workers because the LCP requires a certain level of formality, in particular
formal registration of the enterprise with various government agencies (City Hall, internal
revenue, Department of Trade and Industry, etc.) and the existence of formal employer-
employee relations. Majority of the labor cases submitted to DOLE and its arbitration body,
the National Labor Relations Commission, entail a clarification of the existence of formal
employer-employee relations (see footnote No. 1).
On paper, the law does not forbid the formation of unions of the informal workers. But there
are no explicit laws encouraging, much less enabling, their formation and registration. A
major initiative of DOLE in the 1970s is the registration of “rural workers organizations”
under the Bureau of Rural Workers, which is now merged with the Bureau of Informal
Workers. In the 1990s, DOLE tried to promote the registration of “workers’ associations”,
meaning organizations of workers not for the purpose of collective bargaining. Yet data and
statistics on both are limited and are hardly given recognition in the various “tripartite”
meetings convened by DOLE.
Also, even within the formal labor market, many provisions are not enforced due to certain
rules or jurisprudence governing their application. For example, a big limiting factor in union
formation in the Philippines is the assumption by the industrial relations actors that only
regular workers can form a union because only regular workers can stay on at the work place
beyond 3-5 years. Under the CBA law, a union can win political recognition good for five
(5) years and can negotiate over the terms and conditions of the CBA every three (3) years.
However, the prevailing practice is effectivity of three (3) years for the first terms of the CBA
33
and two (2) years for the re-negotiated terms, to complete the five (5) years of union
recognition (Ofreneo and Hernandez, 2010).
As a result, the short-term workers – probationaries, casuals, agency “endos” and substitutes
– are effectively shut out of union formation and the collective bargaining system. Since the
short-term workers generally predominate, union formation and collective bargaining become
a privilege for a minority of regular workers. And since this is the reality, more and more
employers are encouraged to resort to short-term hiring and outsourcing arrangements in
order to avoid unionism, among others. On the other hand, union organizers try hard to
bargain for the “inclusion” under the “inclusion-exclusion”14 CBA process of all these
“excluded” short-term workers.
Efforts of DOLE to include IE in
Labor Code coverage
Despite the limiting impact of the prevailing legal understanding that employees can enjoy
the rights defined by Books III to VI only if there is clear formal employer-employee
relations, DOLE came up in the early 1990s with two Department Orders (DOs) aimed at
extending the coverage of the Labor Code to certain categories of informal workers. The two
DOs are DO No. 5 and DO No. 19.
DO No. 5, entitled “Employment of Homeworkers”, was formulated to cover the home-
based workers, specifically the “industrial home workers”. DO No. 5 provides for a DOLE-
supervised determination of appropriate wage rates for piece-rate work, the registration of
contractor and subcontractor, the contractor’s obligation to remit employer’s share in the
payment of SSS premium, and the prohibition of child labor. The determination of wage
rates can be done through time and motion studies and dialogue among the workers,
contractors and DOLE. DO No. 5 was issued by DOLE on 04 February 1992 in response to
the widespread complaint that piece-rate workers working at home were being abused by
garments contractors and outsourcing agents.
The problem, however, is that there is no evidence that DO No. 5 was ever used to prosecute
contractors which deviated or have been deviating from the rules promulgated by the said
DO. PATAMABA15, a home-based organization with a large number of garments industrial
homeworkers as members, reported that DO No. 5 was hardly used by their members
because no cases were filed using DO No 5 as a defense. Nevertheless, the salutary effect of
DO No. 5 is that it helped stabilize wage rates for industrial homeworkers in the 1990s
onward for it forced industry to maintain a reasonable standard of compensation for piece-
rate work. Today, however, DO No. 5 is fading in the collective memory of industrial home
14 Inclusion-exclusion process refers to the haggling between union and management as who among the rank-
and-file workers should be included or excluded. Normally and under jurisprudence, rank and file workers
assigned to the finance and human resources department are excluded. But the most contentious issues are the
inclusion-exclusion of non-regular workers.
15 PATAMABA stands for Pambansang Tagapag-ugnay ng mga Manggagawa sa Bahay or National Linkaging
of Home-Based Workers. It has been renamed as the Pambansang Kalipunan ng mga Manggagawang Inpormal
sa Pilipinas or National Association of Informal Workers in the Philippines. The acronym PATAMABA has
been retained.
34
workers because very little outsourcing is being done by the export-led garments industry,
which is also fading because the industry is losing out to the more competitive producers of
Asia. As to the local outsourcers, the primary concern of the industrial homeworkers is the
lack of effective and sustained demand for their work. Hence, nobody is thinking of how to
utilize DO No. 5.
The other DO is DO 19 issued on 01 April 1993. This DO clarifies the distinction between
“project” and “non-project” employees in the construction industry. As is well known, work
in construction projects, especially those involving huge infrastructures or buildings, is an
intricate collection of projects (e.g., steel works, plumbing, electrical, etc.) spread out
sometimes through several phases of construction. What the DO sought to explain is that
project employees, many of which are informal construction workers, must have written
project employment contracts with “a day certain” indicated as to when the project would end
based on the description of a “project” or “phase” of a construction project. If a worker is
terminated before this “day certain”, he/she is entitled to benefits for the unworked days or
weeks covered by the contract on the condition that his/her termination is not justified,
usually determined if there is lawful basis for the termination and if due process is observed.
Without a written contract, project employees who have accumulated a year of service are
entitled to regularization. And with or without written contracts, all project employees are
entitled to other statutory or mandated benefits due to wage workers such as minimum wage
and rest day.
Somehow, the issuance of DO 19 helped mute the issue about the possible regularization of
project employees after the six-month period (based on the Labor Code provision stating that
probationary employees should be regularized after six months) and/or after rendering a one-
year service (based on the Labor Code provision stating that casual employees should be
regularized after accumulating a one-year service). The tenure of project employees is co-
terminus with the project, as specified in a written project employment contract. DO 19 has
somehow made it clear to parties in the construction industry that there are basically two
types of employees: the project employees, who are mostly informal construction workers,
and the non-project regular employees, who are mostly the skilled workers. Construction
companies usually maintain in the payroll the skilled regular workers even if there are no
ongoing construction project because it is difficult to train expert workers such as master
carpenters, who are vulnerable to poaching by local and foreign labor recruiters.
However, the classification of employees between project and non-project employees has
been adopted by the proliferating “manpower agencies” or service contractors which provide
companies with short-term hires. In the past, most agencies deploy short-term hires for less
than six months to avoid the dispute over the Labor Code provision that workers have to be
regularized after a six-month probationary period or, in the case of casual workers, after one
year of cumulative service. Now what is happening in the labor market is that the rules on
project hiring developed by DOLE to curb abuses related to non-regularization and non-
benefit-payment challenges in the construction industry are now being applied to other
industries. But this time, the focus is how to use “project hiring” as basis for the deployment
of workers in a manufacturing outfit or store for two or longer years without getting
regularized like in the construction industry. In short, the idea is to do away with the “5-5
labor market” practice, which leads to the casualization of workers, in favour of longer
project–hiring arrangement up to three years, which enable employers to keep short-term
workers for two or more years without getting regularized. Meantime, the business of service
35
contractors, manpower agencies which do certain services outsourced by the principal, has
been explicitly recognized in DO 18-A issued in November 2011 by DOLE.
Enactment of Kasambahay law (RA 10361)
For years, IE advocates have been clamouring for the formal recognition of the rights of IE
workers and the passage of protective labor laws specifically targeting or befitting the IE
workers. Outside of the two DOs discussed above, no new laws had been issued – that is,
until the enactment of RA 10361 in January 2013.
The passage of RA 10361, otherwise known as the “Domestic Workers Act” or “Batas
Kasambahay”, caught many with surprise. The reason, however, is not difficult to find. The
Philippines was a prime mover or lead campaigner for the adoption by the ILO of Convention
No. 180 (“Decent Work for Domestic Workers”). The rationale for the campaign was to help
curb abuses of Filipina maids by their employers in East Asia, Middle East and a number of
Western countries. The plight and abuses suffered by these migrant Filipina domestics are
well documented and well-publicized.
The Kasambahay law is fairly advanced. RA 10361 requires employers to provide their
maids with copies of written employment contract, pay minimum wage set by the law
(P2,500 in Metro Manila), give maids a full 24-hour rest day once a week, enrol the maids at
the SSS and cover the full amount of the monthly premium, and comply with the statutory
five-day service incentive leave and other applicable Labor Code provisions.
And yet, based on the FGDs and interviews conducted by the Research Team with the
unions trying to organize the domestics, the new law is by and large still not being enforced
in most of the households. Only a handful of law-abiding employers in Metropolitan Manila
are complying with the requirements of the law on the issuance of employment contracts.
This is validated by the fact that most LGUs in Metro Manila require the registration of
domestics in the concerned LGUs, and yet, there is hardly any active registration happening.
.
Applicability of protective labor laws
Overall, it is abundantly clear that the protective labor laws in place in the country are biased
in favour of workers in the formal labor market, mainly for those with clear and formal
employer-employee relations. And yet, the reality is that the weaker and more vulnerable
segments of the workforce are the ones who need more social and labor protection.
However, even if favourable laws are enacted in support of social and labor protection for the
informals, society still has to reckon with the realities in the labor market and the economy.
Enforcement will never be easy, as illustrated by RA 10361(for the domestics) and DO Nos.
5 (home-based industrial workers) and 19 (construction project employees). It is obvious
that social and labor protection for the informals requires a coherent and integrated
development policy framework, a framework that addresses both the missing labor laws and
the enabling socio-economic programs.
What are the initiatives of the government in this regard and what are the demands of IE
organizations and advocates?
36
E. Government initiatives
on social protection for the poor and the informals
Through the decades, various Administrations have initiated programs to combat mass
poverty and improve the welfare of those in the margins of society and economy. However,
there is no precise targeting of social protection for the IE workers. Thus, in RA 8425
creating NAPC, “workers in the informal sector” are lumped together with the
“disadvantaged sectors” that include women, children, youth and students, senior citizens,
persons with disabilities, cooperatives, NGOs, fisherfolk, farmers, urban poor, indigenous
people, workers in the formal sector, and victims of disasters and calamities.
During the first term of the Administration (2001-2004) of Gloria Macapagal-Arroyo, there
were four major anti-poverty programs (apart from the overall national macro-economic
development programs aimed at employment generation):
▪ Credit support for Grameen-style microfinance lending, with the government’s
People’s Credit and Finance Corporation providing loanable funds to non-
governmental organizations (NGOs) re-lending to the “entrepreneurial poor” such as
those fattening pigs at home or maintaining a small neighborhood store;
▪ Credit support for small enterprise development dubbed “Sulong” (meaning
“advance”);
▪ Assistance to the poorest communities and municipalities in building roads, water
systems, clinics and schools; and
▪ Inclusion of indigents in the coverage of the Philippine Health Insurance (Philhealth),
which provides Philhealth members health insurance via affordable insurance
premiums.
In her second term (2004-2010), the Arroyo government focused on the conditional cash
transfer (CCT), which was introduced in 2008 courtesy of the World Bank and the Asian
Development Bank. The CCT seeks to provide a poor family of five (5) a monthly cash
allowance of P1,200 (US$30.00) on the condition that the mother is committed to visit a
maternal health clinic regularly and the family pledges to send their school-age children to go
to school.
All the foregoing five programs have been continued by the Aquino Administration, which
chose the CCT program as a flagship anti-poverty program and immediately doubled the
target CCT beneficiaries from one million in 2010 to two million in 2011.
Most of these anti-poverty programs overlap or intermesh with other programs created by
special laws such as the Magna Carta for Small Farmers (RA7607), Magna Carta for Small
Enterprises (RA 6977) and Barangay Microbusiness Enterprises Act (RA 9178). Also, there
are other related social development programs being carried out by various institutions such
as the skills training program for the out-of-school youth by the Techical Education and
Skills Development Authority (TESDA) and the small lending programs for livelihood
development for the poor and displaced that are managed by DOLE and DSWD.
37
Official definition of social protection
Aside from the NAPC, the government, through the National Economic Development
Authority (NEDA), has created a Cabinet-level inter-agency Social Development Committee
(SDC). The SDC, in turn, has created two interrelated sub-committees -- the Sub-Committee
on Informal Sector (SCIS) chaired by DOLE and the Sub-Committee on Social Protection
(SCSP) chaired by DSWD.
One of the initial recommendations made by SCIS is to foster greater coordination with
LGUs on policies and programs aimed at improving the welfare of informal sector workers.
On the other hand, the SCSP came up with a proposed definition and operational framework
on what constitutes social protection. These proposals were adopted by the SDC in 2007.
Thus, social protection is defined as
“Policies and programs that seek to reduce poverty and vulnerability to risks
and enhance the social status and rights of the marginalized by promoting
and protecting livelihood and employment, protecting against hazards and
sudden loss of income, and improving people’s capacity to manage risks”.
(NEDA-SDC Resolution No. 1, Series of 2007).
For the operational framework, the SCD identified the following as the major components of
the national Social Protection program:
• Labor Market Programs/Interventions – Measures aimed at enhancing
employment opportunities and protection of the rights and welfare of workers.
Employment enhancing measures include trade policies and skills
development and training. Labor protection includes compliance with labor
standards such as minimum wages or health and safety in the workplace.
• Social Insurance – Programs that seek to mitigate income risks by pooling
resources and spreading risks across time and classes. These are designed in
such a way that beneficiaries pay a premium over a given period of time to
cover or protect them from loss of income and unemployment as a result of
illness, injury, disability, retrenchment, harvest failure, maternity, old age, etc.
This component includes micro- and area-based schemes to address
vulnerability at the community level (such as micro-insurance and social
support funds).
• Social Welfare – Preventive and developmental interventions that seek to
support the minimum basic requirements of the poor, particularly the poorest
of the poor, and reduce risks associated with unemployment, resettlement,
marginalization, illness, disability, old age and loss of family care. Social
welfare and assistance programs usually comprise direct assistance in the form
of cash or in-kind transfers to the poorest and marginalized groups, as well as
social services including family and community support, alternative care and
referral services.
38
• Social Safety Nets – Stop-gap mechanisms or urgent responses that address
effects of economic shocks, disasters and calamities on specific vulnerable
groups. These are measures that specifically target affected groups with
specific objective of providing relief and transition. Measures include
emergency assistance, price subsidies, food programs, employment programs,
retraining programs and emergency loans.
In its April 2013 meeting, the SCIS, which has been renamed as the Sub-Committee on
Workers in the Informal Sector (SCWIS), recommended that social protection for the
informal sector workers be enhanced through --
• the expansion of the informal sector coverage of SSS, Philhealth and Pag-Ibig by
requiring membership in these social security programs for workers involved in
government-supported livelihood programs; and
• the higher budgetary allocation for the “2.5 million underemployed, self-employed
and unpaid family workers (USU)” and 350,000 CCT graduates for skills training and
livelihood assistance.
Problems in the delivery of social protection programs
Clearly, social protection for the vulnerables, including the IE workers, has been accepted by
the government, under past and present Administration, as an urgent national goal. The
problem, however, is that social protection is often reduced to a question of how much funds
the government can allocate to the various nti-poverty programs such as livelihood, skills
training and CCT.
However, in the 2011-2016 Philippine Development Plan (NEDA, 2011), NEDA was more
incisive in its assessment of the problems bugging the social protection system in place.
NEDA wrote (p. 245) that the system is characterized by “a series of fragmented and
uncoordinated programs”. It noted that the “multiplicity of programs and government
agencies involved often result in poor coordination, redundancy in providing services or
overlapping of program beneficiaries”. Overall, NEDA characterized the social protection
system as underfunded, confusing due to multiplicity of programs, and the impact poorly
monitored. On weak coordination, NEDA mentioned that there are at least 26 agencies
engaged in the promotion of social protection. On budgetary allocation, NEDA pointed out
that the Philippines social protection spending amounts to a miserly 0.8 per cent of the
national GDP, which is below the mean spending of 87 developing and transition countries
on safety nets.
The PDP also cited the increasing precariousness of work among the formal sector workers
due to “industrial and occupational adjustments” under a globalized production and market
system and the effects of disasters such as those wrought by climate change. The PDP
reiterated the observation that “the larger part of the workforce”, meaning the informal
sector, are excluded from the coverage of the SSS and Philhealth.
The overall recommendations of PDP 2011-2016 include the following: expansion of the
CCT, completion of the land reform program, building of more affordable houses for the
vulnerables and better resettlements for those who need to be relocated, expansion of
39
Philhealth towards “universal coverage”, and investment on more school facilities and
personnel to achieve basic education for all.
In October 2013, NEDA gathered different stakeholders for a “MidTerm Update” of the PDP
2011-2016. On social protection, it reiterated the existing “challenges” such as: limited
budget for SP programs and projects, lack of targeting mechanism that identifies the
vulnerable and the risks confronting them, the weak capability of local government units to
deliver SP services, limited coverage of the vulnerable beneficiaries despite the “nationwide
implementation” of SP programs, increasing vulnerability of overseas Filipino workers, and
limited SP interventions for specific sectors (displaced and repatriated workers, informal
sector, persons with disabilities and orphans).
Meanwhile, the overwhelming focus of government’s SP program is on how to expand the
CCT. The Aquino government seeks to cover 4.5 million families under the CCT program
by 2015, to cover approximately 28 million people out of an estimated population of 103
million in 2015 (Remo, 2013). Under the President Aquino’s watch, the CCT budget had
shot up dramatically, from P21 billion in 2011 to P44 billion in 2013.
The problem, of course, is that the CCT program per se is not sufficient as a safety net for a
family of five members. The monthly CCT allowance of P1,200 is only a fraction of the
monthly income of P13,000 or so of a minimum wage earner in Metro Manila. For the IE
workers, good quality jobs that provide the job holders a monthly income at the minimum
wage level and above is clearly the minimum ideal.
Relatedly, social security coverage for workers in the IE is limited. According to the
Philippine Labor and Employment Plan 2011-2016 (DOLE, 2012), the country’s social
security schemes are able to cover only 31 per cent of the total employed. Although the SSS
has opened its doors to the self-employed and non-regular workers, enrolment is very low,
primarily because the informals’ contribution is virtually double the contribution of the
regular wage worker because the latter has a matching contribution coming from his/her
employer.
40
F. Social and labor protection demands of
IE organizations and CSOs
On the whole, every Administration that came to power had declared war against poverty,
proclaiming that its macro-economic development program is aimed at wiping out poverty.
Every Administration has also been initiating or announcing varied social protection
programs such as the CCT for the poorest members of society, livelihood credit facility for
the displaced workers and informals, and skills training for the out-of-school youth.
Before the 1990s, the targeting of the informal sector in government’s anti-poverty programs
was virtually absent and the formulation of concrete social protection programs for the poor
and disadvantaged was relatively underdeveloped. One possible reason for this was the fact
that the terms “informal sector” (and later “informal economy”) and “social protection”
entered the official development vocabulary mainly in the late 1990s, in the wake of the
Asian financial crisis. To a certain extent, the ILO and other UN agencies such as the UNDP
have also helped nudge the Philippines and other governments in the region to pay special
attention to social protection for the poorest and the most vulnerable as a critical component
of responsible social governance. The ILO’s “social protection floors” have become policy
buzzwords at the turn of the millennium.
The various IE organizations, CSOs and trade unions have also played a major role in making
the terms IS/IE and social protection program part of the development vocabulary because of
their persistence in articulating the situation of the informals and their equal persistence in
demanding social and labor protection for the IE workers, particularly for the most
disadvantaged IE segments.
The formulation of DO 5
A good illustration of the foregoing CSO-government dynamics is the promulgation in 1992
of DO No. 5 (see earlier discussion on details of DO 5). The leading actors which sought
protection for the home-based “industrial workers” are the organizations of home-based
workers themselves. The recognized leader of these workers in the 1980s and 1990s was the
Pambansang Tagapag-Ugnay ng mga Manggagawa sa Bahay (PATAMABA), roughly
translated to National Linkaging of Home-Based Workers. PATAMABA was established in
early 1980s when the export-oriented garments industry and the accompanying outsourcing
of embroidery and sewing of garments parts were booming. PATAMABA was partly
organized with the help of DOLE and ILO, which is the reason why it was one of the first
organizations in the country to be able to articulate forcefully the concept of informal sector
as well as campaign for the ratification of ILO Convention 177 dealing with the rights of
home-based industrial workers. Convention 177 heavily influenced the formulation of DO 5,
which explicitly recognizes the rights of home-based industrial workers to minimum wage
and to self-organization. DO 5 was drafted in consultation with PATAMABA and home-
based garments workers. Unfortunately, ILO C 177 has not yet been ratified up to now and
the garments industry, which inspired the issuance of DO 5, is on the decline.
41
Today, PATAMABA has re-baptized itself as the Pambansang Kalipunan ng mga
Manggagawang Inpormal sa Pilipinas or roughly, National Association of Informal Workers
of the Philippines. It has been espousing the demands of different segments of the IE
workforce such as the home workers, vendors and landless rural poor. The acronym
PATAMABA remains.
The “rights-based” approach to social protection
The adoption of social protection for the poor and the informals as an official policy is also
due to a great extent to the sustained advocacy work of the different IE organizations, CSOs
and trade unions. The demand for social protection intensified in the Philippines and other
countries in Southeast Asia after the 1997-98 Asian financial crisis (AFC). The AFC
embarrassed the governments of the hardest-hit ASEAN countries because the crisis revealed
the missing or undeveloped safety nets for displaced workers and the vulnerables during
crisis periods. Hence, in the wake of the AFC, the Philippines and the countries constituting
the Association of Southeast Asian Nations (ASEAN) have increasingly been discussing and
developing programs on social protection.
Advocates of social protection (see, for instance, Ligtong, 2005) have also been inspired by
different UN Conventions on the rights to social protection and human rights of all citizens,
starting with the 1948 UN Declaration on Human Rights, which states that “Everyone who
works has the right to just and favourable remuneration ensuring for himself and his family
an existence worthy of human dignity, and supplemented, if necessary, by other means of
social protection” (Article 23). In 1976, the International Covenant on Civil and Political
Rights (ICCPR), which was originally adopted by the General Assembly in 1966, came into
force. The subsequent publication of ICCPR opened the eyes of social protection advocates
on the various economic and labor rights that everyone should enjoy such as the right of
everyone to a job that is freely chosen and supportive of one’s family living, the right to just
and favourable working conditions, the right to form and join trade unions, the right to social
security (including social insurance), the right to adequate standards of living and other
entitlements of citizenship. Later, the ILO developed, following the adoption in 1998 of the
Declaration on the Fundamental Principles and Rights at Work, a “Decent Work” program
based on the concept that work should be obtained in conditions of freedom, equity, dignity
and security.
Filipino advocates of social protection for the disadvantaged and the informals have also
found solid policy basis for their advocacy in the pro-poor orientation of the Philippine
Constitution of 1987. The charter reaffirm the rights of citizens and workers that are reflected
in various UN and ILO Conventions. Section 3, Article XIII explicitly states that it is the
duty of the State to protect “all workers”, organized and unorganized, and to guarantee their
rights to self-organization, living wage, family welfare, and social security.
Thus, it is not surprising that the IE organizations, CSOs and trade unions take a uniform
“rights-based approach” in the espousal of social protection for all workers, particularly the
unprotected informals and the formal workers in precarious casual situation. Social
protection is deemed the right of all workers; hence, it is the duty of the State to ensure that
such right is enjoyed by all. The universal enjoyment of this right is, of course, not
happening as reflected in the limited enrolment of the informals in the SSS and Philhealth
and the limited reach of the government social protection programs given budgetary
42
limitations. This explains the continuing campaign of IE organizations, CSOs and trade
unions on social protection for the informals and casual workers.
The MACWIE Initiative of IE organizations and CSOs
It is against this backdrop that home-based and informal sector organizations and NGO
advocacy groups have banded together to form an Alliance called MAGCAISA16, or Magna
Carta for the Informal Sector Alliance. The idea is to push for the passage in Congress of a
Magna Carta for Workers in the Informal Economy (MACWIE) that guarantees the rights of
the informals to have a job, to form an association, to get social protection and to have
security at work and work place, including the right to be protected against harassment by
agents of the State in relation to the micro and informal economic activities of the self-
employed informals. The Alliance argues that all these demands are basic rights all citizens
are entitled to under the 1987 Philippine Constitution and the various UN Conventions on
human, economic and social rights. Section 9, Article II of the Constitution states forthright:
“Section 9. The State shall promote a just and dynamic social order
that will ensure the prosperity and independence of the nation and free the
people from poverty through policies that provide adequate social services,
promote full employment, a rising standard of living, and an improved
quality of life for all.”
As spelled out in HB No. 2295 of Congressman Dan Fernandez, the proposed Magna Carta
calls for the following:
• system of recognition and registration of IE organizations, managed at the local level
by the proposed Workers in Informal Economy Local Development Office
(WIELDO);
• extension to the informals of all rights enjoyed by the formal sector workers, as
appropriate (e.g., industrial home-based workers), such as the healthy and safe
working conditions, fair remuneration and equal treatment before the law;
• increased government funding for its “labor market programs” to help promote decent
work creation;
• full universalization of social security and health security coverage;
• designation of viable workplaces for informal workers plying their trade or business
in public places, e.g., special lanes for small transport workers and development of
accessible market places for informal sector vendors;
• enhanced skills development programs for the informals;
• protection against forcible eviction and demolition in the case of informal
settlements;
• prohibition against outside occupation/conversion of agrarian reform areas and
ancestral domain reserved for the indigenous people;
• creation of an Informal Economy Development Council (IEDC) for efficient and
effective coordination of IE SP programs; and
16 Magcaisa sounds like “Magkaisa” or “let us unite” in Pilipino.
43
• better monitoring and establishment of database for the informals and their needs.
Demand for policy coherence
The articulation by the IE advocates of their collective demand for social and labor protection
in the Philippines has also progressed from a purely rights-based approach (or demanding
specific entitlements as citizens and as informals) to the demand for a more balanced and
equitable economy that is able not only to satisfy the basic rights of the informals but also
help empower the informals by enhancing their access to skills, capital, land and markets.
There is increased realization that the fulfilment of the Constitutional vision of an empowered
and protected informal work force requires bold reforms on the economic, social and political
fronts. Thus, the demand of the IE advocates for policy coherence. For example, social
protection for the landless rural poor cannot be met by only providing CCT to the poorest
families, the creation of additional jobs through labor-intensive infrastructure projects, the
subsidized enrolment of the landless in the SSS and Philhealth and the recognition of their
rights to form organizations; social protection for the landless also requires the completion of
agrarian reform and capacity building for the ARBs to an ARCs to modernize and
industrialize farming so that more rural jobs can be created and more progressive rural
communities can be developed.
It is in this context that the Homenet Philippines and the UP Center for Labor Justice forged
unity with other IE advocates in the drafting in 2010 of the People’s Social Protection
Agenda (PSPA), whose contents are virtually self-explanatory: Jobs for All, Social security
for All, Health care for All, Education and skills for All, Basic services for All, Social
assistance to All in need, Justice for All, and Voice for All. The list of rights and
entitlements due to each informal worker, as a citizen and as a human being, are itemized in
the PSPA. However, what the PSPA emphasizes is that the realization of such rights and
entitlements requires a transformation of the development framework to insure that growth is
balanced, sustainable and inclusive. Hence, while the PSPA calls for urgent job creation
through labor-intensive infrastructure development badly needed by the country, it also
demands full implementation of asset reforms, to help empower the landless, homeless and
asset-less informals. A discussion of these reform programs – agrarian reform, urban reform,
coastal reform, ancestral domain reform and basic services delivery reforms – requires a
separate policy paper. However, the debate on the progress or lack of progress in the reform
process is quite intense in the CSO and government circles in the Philippines.
What the Research Team tried to do is compile other advocacy demands for SP articulated by
the IE organizations and trade unions.
On labor law reforms
On labor law reforms, the Research Team was able to consult with select trade unions and
CSOs and IE organizations. The following are some of the notable recommendations:
• Passage of MACWIE, which provides for the following: the right of all informals to
form organizations at the local, community and national levels; the right to security at
work and to secure work places; the right to skills development; and the right to
adequate and universal social protection, including universal health insurance.
44
• Enactment of laws recognizing the right of all workers, regular and short-term, formal
and informal, to form unions/associations, as needed, for purposes not only of
collective bargaining within an enterprise but also for varied collective undertakings
such as negotiating with local government units (LGUs) on taxes and so on.
• Formulation of implementing rules that make the application of labor laws more
inclusive, not restrictive, and that enable unions and associations of informals with
different conditions or bases of income generation to freely form associations based
on the concrete needs and interests of each segment of the informals as discussed
earlier.
• Repeal or reform of restrictive jurisprudence on unionism through any or all of the
following: clarificatory laws, revised implementing rules and progressive rulings by
the Supreme Court. For examples, the doctrine on employer-employee relations
should clarify the role of principals in a contracting arrangement; unionism and
collective bargaining can be enjoyed by the non-regulars; and the union of workers
need not be defined as an organization formed solely for collective bargaining
purposes.
• Development of mechanism for the full enforcement of the Kasambahay law.
• Enactment into law of DO 3 on health and safety for the construction workers, to
provide teeth for the DO.
On strengthening social protection measures
• The State should move towards a regime of universal social protection, which entails
State direct assistance for the least capable and State subsidy to those partly capable.
This generally means reform in the budgetary system for social protection, from 2-3
per cent of the GDP to 6-8 per cent.
• There should be a people’s review of the efficiency, effectiveness and adequacy of
services provided by the SSS, GSIS, Pag-Ibig, Philhealth and ECC.
• Skills development and training opportunities for all who have not finished
elementary, secondary and tertiary education, regardless of age. Skills trade
certification is a major demand of construction workers.
• Universal health and social security coverage. On paper, the government supports the
concept of universal social protection. But the reality is that budget and a concrete
implementation program are needed for this purpose. There should be special
assistance for the unemployed, the near-jobless (unpaid family workers and
underemployed).
On macro-economic policy coherence and
social reforms
The advocates point out that the creation of jobs for all requires an overhaul of the macro-
economic development framework that perpetuates joblessness and near-joblessness due to the weak development of industry and agriculture as well as vigorous implementation
of social reforms. Some policy and legislative reform measures include the following:
45
• Integration into the macro-economic framework of an industrial policy in support of
the revival and expansion of domestic industry as well as of an integrated agricultural
development coherent with agricultural modernization and land reform completion.
• Completion of agrarian reform and transformation of ARBs and ARCs into modern
agribusiness producers.
• Full implementation of urban reform and mass housing program.
• Economic freedom parks cum entrepreneurship for small vendors and home-based
producers plus consultations and dialogues on how to address the vendors’ myriad
concerns.
• Business development program for women and youth.
• Incentives for green economic growth involving the grassroots (e.g.., cooperatives,
local communities and MSMEs). There should be promoting adaptation measures at
the community level and CCT-for-CC adaptation work.
Annex B is a summary list of policy and legislative recommendations based on FGDs and
interviews conducted by the Research Team.
46
G. Coherence and transformation
ILO Geneva has produced Report V for the 2014 International Labour Conference entitled
Transitioning from the informal to the formal economy. The Research Team agrees with the
main observation of the Report that the huge “decent work deficits” in the IE require a more
positive regulatory policy environment to overcome these deficits. There is indeed a need for
a “transitioning” program, from the informal to the formal, because abuses and neglect of the
rights and welfare of the informals thrive precisely on the invisibility (full or partial) of the
informals – in laws, government programs and society’s development framework.
However, there is no royal road in making the transition from the informal to the formal.
What is abundantly clear from this Philippine Report is that the transition requires indeed an
“integrated policy framework”, as articulated also by the ILO’s Report V. Social protection
for all means not only budgeting for SP programs such as the CCT program or subsidy for
SSS coverage but also reforms on the social, economic, legal and even political fronts. A
piecemeal approach to social protection often leads to policy incoherence and weaknesses in
coordination as cited in PDP 2011-2016 and its Update. There is also the tendency to reduce
social protection to a question of merely giving monetary assistance to the poorest, neglecting
in the process the need to empower all the informals, poor and near-poor alike, and make
them more productive and self-reliant, thus restoring their individual dignity and sense of
worth.
Framing and forging the necessary integrated development framework cannot be the work of
one Research Team or one IE network. A multi-sectoral approach to the formulation of this
framework is a must and unavoidable, especially in a country which boasts of its democratic
credentials and liberal economy. This should be the focus and basis of any social dialogue on
social protection for the informals.
Let the dialogue process begin!
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Annex A – List of consulted institutions/agencies/organizations
HOMENET PHILIPPINES
AKSYON NG KILUSANG KABABAIHAN SA INFORMAL SECTOR, INC. (AKSYON
KABABAIHAN)
ALYANSA NG MAMAYANG NAGHIHIRAP (ALMANA)
ASSOCIATION OF INFORMAL SECTOR OF THE PHILIPPINES- CARE FOR SOLO
MOTHERS ALLIANCE (ASAPHIL-CARESMA)
ASSOCIATION OF CONSTRUCTION AND INFORMAL WORKERS (ACIW)
BALIKATAN SA KAUNLARAN INFORMAL SECTOR (BSK-IS)
BATIS AWARE
BULACAN-TAYTAY GARMENTS ASSOCIATION
DAMAYAN SAN FRANCISCO
DEMOCRATIC SOCIALIST WOMEN OF THE PHILIPPINES (DSWP)
ILAW NG TAHANAN (INT)
KAISAHAN NG MGA KABABAIHANG GUMAGAWA SA BAHAY (KASAMBAHAY)
KATIPUNAN NG MGA BAGONG PILIPINA (KABAPA)
MANGGAGAWANG KABABAIHAN MITHI AY PAGLAYA (MAKALAYA)
MARKETING ASSOCIATION OF GROUPS AND INDIVIDUALS IN THE SMALL-SCALE
INDUSTRIES (MAGISSI)
NAGKAKAISANG KABATAAN PARA SA KAUNLARAN (NKPK)
NATIONAL UNION OF BUILDING CONSTRUCTION AND WORKERS IN THE INFORMAL
SECTOR (NUBCW)
PAMBANSANG ASOSASYON NG MGA PANDAY AT ALYADONG INDUSTRIYA
(PANDAY)
PAMBANSANG KALIPUNAN NG MGA MANGGAGAWANG IMPORMAL SA PILIPINAS
(PATAMABA),INC.
PAMBANSANG KOALISYON NG KABABAIHAN SA KANAYUNAN (PKKK)
PAMAKO
RIZAL INFORMAL SECTOR COALITION (RISC)
STO. NINO CONSTRUCTION WORKERS ASSOCIATION (SANCOWA)
SAMAHANG PANGKABUHAYAN SA KAMAYNILAAN (SANGKAMAY)
SIKAP-UNLAD LIVELIHOOD ASSOCIATION (SULA)
WOMEN’S INSTITUTE FOR SUSTAINABLE ECONOMIC ACTION (WISEACT)
WORKERS IN THE INFORMAL SECTORS ENTERPRISE (WISE)
SAMAHAN NG KABABAIHAN PARA SA KAUNLARAN (SKPK-UP)
Trade Unions
Affiliates of Building Workers International
Alliance of Progressive Labor (Research Department)
Federation of Free Workers (Project Development Office)
Nagkakaisang Lakas ng Manggagawa-KATIPUNAN
Unified Filipino Service Workers-National Confederation of Labor
Executive/Legislative -- Research Team was able to raise the issue of MACWIE and other
informal concerns in a March legislative workshop on pending labor bills organized by the
Institute of Labor Studies. The staff of the House Committee on Labor and the Senate
Committee on Labor as well as the staff of select Senators and House Representatives
attended.
48
The Research Team was also invited to the House Technical Working Group Meeting on
MACWIE.
Informals consulted/interviewed – landless and displaced families in Iloilo and Capiz (due
to tyhoon Haiyan in central Philippines); informal vendors in Intramuros, Manila; market
vendors united under the Nagkakaisang Lakas ng mga Manininda sa Blumentritt (PIGLAS);
PATAMABA home-based women members at Balingasa, Caloocan; and select construction,
transport and service workers in Metro Manila.
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Annex B – Life stories (and FGDs) of select informals
Vilma: Rag maker, home-based worker
Vilma is 38 years old, married. She has three children- one girl and two boys aged 15, 14 and
6 respectively. She used to be a sewer in a garments factory and stopped working when her
youngest son was born.
Now, she earns a living through rag making, together with five women in the neighbourhood
compound where her family lives. They do not own sewing machines so these women
decided to rent 3 manual sewing machines (de padyak) for P10/day/machine. They shoulder
the repair costs in case of machine breakdown because the owner argues that rental cost is
already very low. They pay P200 for the service fee and on top of it, the cost of parts that
need to be replaced. One of the sewing machines is no longer in good condition so most of
the time, they are using only 2 machines. They take turns in sewing. They buy the retaso
from Malabon at P20.00 per kilo and these are delivered to them. They also buy the thread,
needles and scissors. A P50.00 thread will last for a week.
Vilma’s day starts at 5:00 in the morning. She prepares breakfast and attends to the needs of
her children before they go to school. At 7:00 in the morning, she starts sewing rags until
12:00 noon. By that time, she has produced an average of 130 pieces. Her neighbour will
then take her turn to sew while Vilma trims the rags which she sewn. When her neighbor
wants to rest, she will again use the machine. Usually, these women work until 10:00 in the
evening especially when they have orders to deliver. Vilma uses her break time to prepare
dinner for her family, wash clothes and do other household chores.
The group delivers the rugs to their buyers in Balintawak. There are other establishments who
want to order from them, but they cannot accommodate the volume required because they can
only produce so much with the kind and condition of machines they have. The rags are
bought from them at 90 centavos per piece. It is sold by the buyers at P2.00 per piece or
P5.00 for 3 pieces.
Vilma is okay with this type of work because she is able to take care of her children, do
household chores and earn a little at the same time. Also, she prefers this because according
to her, she is her own boss. She is not a member of SSS, Philhealth and Pag-Ibig but a
beneficiary of her husband who works as a welder in a company.
Her husband earns minimum wage. When their combined income (around P560/day) is not
enough to cover expenses, Vilma borrows money from her siblings and pay them back when
her husband receives his salary.
If only Vilma has extra money, she wants her group to produce curtains and pillows and
deliver these items to market vendors in Blumentritt.
Marissa and Eden: Domestic workers
At 19, Marissa went to Lebanon to be a domestic helper. She thought that working abroad is
the best way to get out of poverty. Being young, her woman employer, accused her of
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seducing her husband. She was physically battered by this woman several times. One time,
when the couple had to bring their child to the hospital, Marissa decided that this was her
opportunity to run away. It was winter time so she put on layers of clothes and underpants
and ran to the Philippine Embassy. Her employers went to the Philippine embassy and
lodged a complaint saying that Marissa stole something from them which was the reason why
she fled. The embassy personnel told her employers that if they can prove that she did steal,
they will act on the complaint. Her employers did not pursue their complaints.
Back in the Philippines, she continues to be a domestic helper. Fortunately, she is now
working for a single woman who encourages her to know her rights as a domestic helper.
Marissa is given a salary of P2,000 a month. She is currently a working student taking up
Business Administration and her employer pays her tuition fees. Marissa pays her SSS
contribution and other school requirements from her monthly salary. Although she has no
employment contract with her current employer, she feels that she is treated well. She was
even persuaded by her employer to join a domestic workers’ organization.
Eden is not as lucky as Marissa. She is a native of Leyte; was not able to finish high school
due to poverty. She went to Manila when she was 15 years old and worked as a dishwasher
in a canteen, a factory worker, burger stand staff and a domestic worker. As a domestic
helper, she is usually an all-around helper. In one of her employers, she had to wake up at 2
in the morning to wash clothes while the baby is still asleep. She also experienced being fed
with stale food. One time she was so angry that she told her employer “Kung kumukulo ang
tiyan nyo sa sirang pagkain, ako rin.” With her current employer, she is given a salary of
P4,000 a month which is lower compared to her salary as an ENDO (worker with a 5-month
contract) but she chose this work because she was promised that she will be allowed to study
in the Alternative Learning School (ALS) offered by a school near her place of work. She
has no employment contract and no social benefits. Her day starts at 5 in the morning and
ends at 10 in the evening. There is so much to do because her employers are running an early
childhood school as well. So, aside from doing domestic chores, she also acts as the janitor of
the school and even tutors to some students. Right now, she is doing her best with her studies
although she is often absent because of the volume of responsibilities as a worker. She
always remind herself to study hard “para hindi ako habambuhay na ganito.”
Arnold: Construction worker
Arnold is 38 years old, a house painter. He is married with two children – a daughter who is
14 years old and a son who is 12. He and his wife used to be factory workers but when they
reached the maximum age limit required of factory workers (he thinks that it is between 25-
35 years old depending on the industry), he started working in construction projects. At first,
he was a helper, and then he became a mason and later on learned how to paint. The first
time he applied for work in a construction company, he was asked to submit his biodata.
When hired, he did not sign any employment contract; instead, all arrangements were done
verbally.
The income of a project worker like him depends on the project life or duration of a project
phase. Work could be for a period of two weeks for small projects and 5 months to as long as
three years for big projects. One is lucky if he get three to four projects in a year. During
rainy days, there will be no project.
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Arnold is paid P450 per day as a skilled worker and receives his salary on a weekly basis. In
other projects, he gets paid P500 a day. To save money, if a particular project is near his
residence, he brings packed lunch to work and go home everyday but if the site is far, he opts
for stay-in arrangement although workers are not required to. Many times in the past, he
experienced not being paid by the contractor or foreman for the work he had rendered. This
could be due to lack of budget or work stoppage because there were violations (e.g. no
building permit). There were times that the construction workers were the ones invited to go
to the police station to explain the illegal construction work.
In case of accident at work and a worker needs to be hospitalized, the contractor pays the
hospital bills but once the worker leaves the hospital, he is left on his own. To practice safety
at work, workers are required to purchase the PPEs from the contractors. The costs are
automatically deducted from their pay.
Arnold takes home an average of P2,000 per week as a construction worker. His wife tries
her best to make both ends meet. Many times, she has to borrow money and pay the loan
once he gave her his earnings for the week. And since his pay is not enough to cover the
needed budget for the week, she will again borrow money and this cycle of borrowing and
paying never ends.
If Arnold does not have work as a construction worker, he sells artificial flowers house to
house. He gets the product from people he knows or if he has money for capital, he buys the
flowers directly from Divisoria. His wife, on the other hand, used to sell kakanin and bread
in front of our house, but her micro-business folded up due to lack of capital.
When he was still working in the factory, he was an SSS member. But now, he can no longer
pay the required monthly contribution. In fact, majority of the construction workers he
worked with do not want to be SSS members even if the contractors are willing to pay
because workers do not want to pay the counterpart. Many of them see it as expense and not
as protection. On his part, although he wants to maintain his membership with the SSS, his
priority is to make sure that the daily needs of his family on food and education of his
children are met. And what he earns is no longer enough to take some amount to pay for SSS
contribution.
Arnold’s family lives with his parents. Reynaldo, his 62 year old father, is also a
construction project worker who has been in the industry for 34 years as mason, carpenter
and house painter. Like Arnold, if he does not have work as a construction worker, he also
sells artificial flowers and hangers house to house.
Rowena: Home service masseuse
Rowena is 35 years old, single parent with 2 children (7 year old girl and 4 year old boy). She
is a PWD (one eye blind since 2002 due to glaucoma). She finished 2nd year in high school.
She studied for one year at DSWD’s National Vocational Rehabilitation Center for PWDs to
learn how to massage. She became a member of an organization of blind people which
facilitates jobs for its members in mall-based massage corners. She shared that before, the
organization could occupy a particular space agreed upon with the mall owner for free but
nowadays, it has to pay between 50,000- 100,000 a month.
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She earned P100-400 a day depending on the number of customers and type of massage (half
body, whole body sitting, whole body lying). The sharing scheme is as follows:
Type of massage Price of service Masseur/masseuse Organizer
Half body 100 50 50
Whole body sitting 180 80 100
Whole body lying 300 150 150
In some cases, the PWD gets lower because the organizer says that they will get more from
the tips coming from the customers.
She earned extra when customers get her number and calls her for home service massage.
She followed the mall rate for services she rendered.
She also shared that in big companies employing blind people, sharing is on a 60-40 scheme
because they provide social insurance (SSS, Philhealth). Also, clients could include “high
end” customers who are likely to give big tips.
Issues:
(1) There are customers who asked her to wash her hands before the massage session
instead of rubbing her hands with a hand sanitizer. Because of this, there were times
that her hands were shaking due to “pasma.”
(2) She could not turn down customers who have wounds because they are not included
in the list of cases not allowed to undergo massage (e.g. person with very high fever,
pregnant (special massage for this), people who are suffering from high blood
pressure, newly operated, women when they have menstruation)
(3) There are also two types of workers: “tauhan” who is a regular worker and “extra”
who works part-time. The tauhan can take loans from the organizer (e.g. to take
exams for TESDA certification) while the extra cannot.
(4) With the proliferation of the “spa industry,” competition becomes stiff.
She quit her mall job in 2010 when she gave birth to her son because nobody would take care
of the baby. She still does home service massage but on a limited time and charges the same
amount as mall rates. When she has to leave home for work, she asks her niece to look after
her kids.
She wanted to get a license (skills certification from TESDA) but she heard that one has to
pay P12,000 for the exam. The license is important because she also heard that the DOH will
be very strict with the requirement that those working as masseuse/masseur should be
licensed for customer protection. Also, if she has a license, she will be allowed to post
advertisement for her services.
Her main source of income right now is from being an ambulant vendor selling kakanin. She
earns P100-200 a day. For her health benefits, she applied for an indigent card in St Luke’s
and she also holds a PWD card which entitles her to discounts in hospital services and
medicine. She was not considered in the 4Ps program of the government.
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Jenelyn: Home service manicure and pedicure
Jenelyn is 56 years old, married with one son (21 years old). She is a high school graduate.
In 1980, she studied for 3 months to learn nail care services in Silay City. Then, she serviced
her neighbours and charged P5.00 for manicure and P5.00 for pedicure which was the current
rate in beauty parlors.
In 1990, she migrated to Metro Manila and worked in a barber shop for one year. She
acquired skills in ear cleaning and hair cutting during her stay there but she got allergic
reaction from cutting hairs. She earned P5,000 a month with no social benefits. When the
barber shop closed down, she went back to home service work. She preferred home service
because time is flexible and she could turn down customers.
She earned an average of P7,000 a day. Initially, her customers were from the customers of
the barber shop that closed down and her neighbors. Through word of mouth, her network
expanded. But she said that it was like a full-time job. She left home 7 in the morning and
would be back in the afternoon depending on the number of customers calling her for service.
Her sister took care of her son while she was away from work. When a friend of her who
works in a parlor taught her how to do foot spa, she included this as one of her services. Her
charges are based on parlor-rates within the area of her residence (In 1990s, P50 for manicure
and P60 for pedicure. Now, she charges P150 for manicure and pedicure).
Nowadays, her income is lower because she has to attend to domestic chores and she also
cooks for the owner of their rented apartment to lower their monthly rental. Also, the number
of customers is getting smaller because of nail spas and home service companies which offer
the same services with additional “techniques.” Her “tools” remain the same since she
started with just a few inputs from experience and from friends working in parlors.
She is worried about her retirement because she and her husband are not SSS members. She
wants to get a Red Cross card for insurance.
Her husband is a member of the senior citizens group of the barangay. He pays P300/year for
membership dues. The organization holds fund-raising activities for the programs of the
organization such as livelihood opportunities, loan, burial assistance, etc. The group is
lobbying for the 1% budget of the barangay to be allotted to senior citizens.
Oliva: Cutter of slipper sraps, home-based worker
Oliva is 55 years old, with six children. From 1999 to 2012, her main source of income was
by cutting straps for slippers. In the beginning, she was responsible for picking up the raw
materials from the factory. She had a cart to transport these materials. When the road leading
to the community where she lives was constructed, the materials are now delivered to her by
a subconctractor who gets work from HAVANA. A truckload of supplies is brought to her
for cutting, so also sub-contracts jobs to neighbors.
She gets P28.00. for every sack with 24 bundles of cut straps. Each bundle contains 10 pieces
54
of straps. To earn profit, she pays her sub-contracted workers (neighbors) P26.00 a sack.
Each week, each one of them is able to finish four to six sacks, so she earns P12.00 for every
sub-con worker. This amounts to P240.00 a week. Children also help cut straps. she gives
them P5.00. Sometimes she and her neighbors also do core cutting called “magbubuko”. This
means taking away the extra rubber at the back of the slipper, particularly the round ones that
serve as its lock. They are paid P1.00 per bundle which contains 12 pieces.
The whole family helps in cutting straps. They use small scissors which they bought. She
admits to being slow in this work, so she only gets to finish two sacks in a week. However,
her children work faster. Sometimes they do it while watching TV and they did not realize
they are able to cut many straps already. At other times, they cut straps while talking to each
other. When there are deadlines, everyone tries her or his best to finish the work to keep their
good record with the trader that delivers them these straps. Sometimes, she takes a loan from
her sister or brother to advance payment for her sub-con workers. She pays them back when
the cut straps are picked up. The contractor pays them as soon as the work gets done and
picked up. They have never experienced not being paid for the work they did.
During Christmas, the trader gives them step-ins in various sizes. Probably, these were the
ones left unsold in department stores. Since they do not know the sizes that would be given to
them, lucky enough are those who get the sizes that fit them.
Working space is a bit of a problem with this kind of work because they have little space in
the house and during the rains, they have to work inside. But it is dark inside, and there is the
smell of rubber. It is so offensive to senses that Oliva feels pains in the chest. Especially if a
sack of rubber is newly opened, it just smells like human feces. The smell stays on the skin
and it is difficult to eat with hands. If forced to, it results to a bitter taste on the food they eat.
Workers also feel pain on their fingers due to cutting and pain at the back and hips due to too
much sitting. They cannot avoid washing hands after work because of the household chores.
However, this kind of work is helping their family a lot financially.
Oliva is not a member of the SSS or Phil Health. There is no mutual help fund in the area
either. If she gets sick, she pays for medication. She was once an SSS member but since
income is irregular income, she was not able to meet the monthly contributions. As a sub-
contractor, she does not have the resources to support her workers because they are almost on
the same plight.
HAVANA slippers are sold in department stores at P50.00. to as high as P300.00. depending
on the style.
Early last year, she stopped doing this work because her husband became sickly. Although
she could not categorically say that his sickness was due to health hazards associated with
this type of work, his health has greatly improved when she stopped this type of work. She
doesn’t have any source of income now. Some of her children are already working in
factories and they are the ones who take care of household expenses.
55
Annex C – List of policy recommendations and demands from
key informants and FGDs: A summary
✓ Asking the government to make social protection truly inclusive, that is, to cover all
workers by appropriating enabling budget and establishing or strengthening
institutions in the delivery of needed social protection services. After all, Social
Protection for all has already been formally adopted as an official policy by the
government. Per the NEDA Social Development Committee Resolution No. 1 (Series
of 2007), social protection refers to policies and programs that seek to reduce poverty
and vulnerability to risks and enhance the social status and rights of the marginalized
by promoting and protecting livelihood and employment, protecting against hazards
and sudden loss of income, and improving people’s capacity to manage risks. The
four (4) components of SP include: Labor Market programs; Social Welfare; Social
Insurance and Social Safety nets. NEDA stands for the National Economic
Development Authority, while the Social Development Committee draws members
from DOLE, DSWD and other agencies involved in social protection. The issue,
therefore, is not the absence of any government commitment to social protection;
rather, the issue is how serious is the government in drawing up programs that can
satisfy social protection for all.
The government has different programs under social protection such as the
government-run Philhealth insurance, skills training for displaced workers and out-of-
school youth, Conditional Cash Transfer (CCT) for the poor. The CCT, supported by
the World Bank and ADB, is a centrepiece program of the Aquino Administration and
is allocated close to a billion dollars in the annual national budget. The CCT gives a
monthly allowance of P1,400 (roughly US$32) for a family on the conditions that the
mother would go to a maternal clinic regularly and her children would go to school.
However, the CSOs are demanding a broadening of the above programs and the
meaning of social protection. Specifically, they want –
• Philhealth coverage truly universal and should cover the cost of doctor’s
consultation, all related medical expenses (not just select drugs) and out-
patient expenses; and
• CCT for the “near poor”, not only the poor at a certain poverty threshold, and
revamp of the CCT program to include CCT for work.
✓ In addition, they want an integrated program to lift up the informals from poverty.
Such an integrated program would entail the following:
• creation of jobs for all,
• completion of land reform and housing reform,
• provision of education and other basic services for the enjoyment of all, and
• voice and justice for all.
On social security coverage, they demand the development of a “hybrid” system in
social security coverage similar to what other countries are doing, e.g., providing
56
subsidized contribution to the less able in making regular contributions and outright
social assistance to the least capable.
As to job creation and income augmentation, the government should protect home
industry such as the shoe industry of Marikina and the livelihood of marginal
producers such as the coastal fisherfolk. Protection programs vary: strict campaign
against smuggling, capacity building for small-micro enterprises, market development
assistance and so on.
Protection of work should include protection of access to places of work and
livelihood such as market stalls for the vendors and terminals for small pedicab
drivers.
✓ Passage of the MACWIE bill. The proposed law draws inspiration from the
Philippine Constitution (Article 2/Section 9 provision), which states that “the state
shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a rising standard of
living, and an improved quality of life for all”. The MACWIE bill embodies the
aspirations and needs of the informals. There are sections on rights: representation,
social protection/ security, Philippine Health (PhilHealth) and so on. It also provides
for the rights of the informals to be consulted on development programs, especially on
issues at the different workplaces of the informals. MACWIE also fleshes out the
informal workers’ rights to form union/cooperative/enterprise as needed and to
negotiate/hold dialogue with concerned public and private institutions, all of which
are critical in the empowerment of all workers.
✓ Specific proposals in support of Social Protection:
• Checking the gaps in existing programs and analyze/ study how to bridge the gaps
with the end goal of Universal Social Protection;
• Adoption of the ILO Social Protection Floor as a key development strategy, for it is a
practical approach to extending social protection to the poorest of the poor and near
poor or the working poor (constituency building for the social floor a must);
• Government subsidy for SSS contributions of the working poor;
• Operationalization of an unemployment insurance in the country;
• SSS Reform Agenda – amendment of the SSS Law of 1997, to address large
unfunded liability, inadequate benefits and streamlining of operations;
• Ratification of ILO Convention 102 requiring a quantum leap from current coverage
and benefit provision;
• Expansion of Employee Compensation to cover the self employed; and
• Integration of local governments in the social protection system (rich LGUs already
have generous “womb-to-tomb” programs, which duplicate national social protection
programs).
✓ Other proposals:
• Job security of informal wage workers should be protected in accordance with the
Labor Code provisions. Likewise, the informal wage workers should enjoy
appropriate occupational safety and health (OSH) standards.
57
• The informal settlers, especially those dwelling in the so-called “danger zones”,
should be given integrated relocation assistance, meaning relocation in decent
communities with available job/income opportunities. The relocation assistance
should not be monetized for the individual informal settler family (roughly P18,000
per family) and should instead be spent in support of this integrated community re-
building and relocation program.
• The informal workers should have representatives in tripartite and other consultative
bodies at the LGU and national levels. Relatedly, the organized informal sector
associations should intensify the campaign for such representation.
• The Public Employment Service Office (PESO) of each LGU should give special
attention on the job needs of the informals.
• A socialized housing program nationwide should be established. There should be no
informal settler demolitions without consultation and without a clear job-and-home
relocation program. Urban renewal planning and implementation should involve the
urban poor as stakeholders.
• Protective labor laws (labor standards, labor relations and social security) should be
reviewed to cover both formal and informal workers.
• Recognition of the right of contractuals to form union and bargain collectively. There
should be intensified campaign for a remedial law against labor abuses committed by
service contractors and principals.
• There should be universal health care services, meaning all contractuals should
enjoy medical care, whose cost should be shouldered by the company and the
government.
• The land-acquisition-distribution program under the 1988 Comprehensive Agrarian
Reform Program (CARP) should be completed and CARP should move at a higher
level, meaning towards the transformation of CARP areas into modern and
progressive agro-industrial sites. The land distribution program should be
accompanied by reforms to stop illegal land conversions, illegal land retention
programs by the elite and various maneuvers of the elite to avoid genuine land reform.
• The inclusion of the farming community in the SSS coverage is a must . But farmers
should first have sufficient income and the landless and jobless should have jobs.
And like in the informals, the SSS premium payments should be set in a progressive
way based on capacity to pay of the farmers and the landless, with the government
coming in to provide needed subsidy support.
• The coco levy funds (over a hundred billion pesos) should be used justly and solely
for the coco farmers and the coco farming communities based on reasonable criteria
arrived at through democratic consultation with the coco farmers, their associations
and their communities.
58
✓ Adaptation and anticipation measures to avoid or minimize climate change risks for
the poor and the informals are the most vulnerable. In fact, cities swell whenever
there is prolonged drought or a major disaster in the rural areas, with climate change
refuges coming in droves. Programs protecting the sector from the risks associated
with climate change should be comprehensive, coherent and sufficient. It is not
enough to have an early warning system in terms of weather forecasting and relief
distribution when disasters happen. There should be assistance in climate change
adaptation and anticipation, for example, building stronger community shelters.
There should also be assistance in crop diversification and development of
appropriate seeds and technology to insure livelihood and survival under extreme
weather conditions.
59
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