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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.

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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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