Rebolusyunaryong Partido ng Manggagawa - Pilipinas
Labor Situationer

Labor Situationer

  1. Foreword

As Marxist-Leninists, the party believes in the revolutionary character of proletarians and its capability to lead the socialist revolution and transformation of society. The world and life as we know it has been advanced and dominated by proletarian-led production for the last century, save for some vestiges of semi-feudal relations in poor and backward parts of Third World Countries like the Philippines. There is little doubt as to the dominant mode of production in the country – capitalism, although maldeveloped in the industrial sense.

 

Hence, for the workers party to midwife the socialist revolution and transformation of the Philippines, it is axiomatic that the situation of the national proletarians be examined vis-à-vis the material conditions currently existing in the Philippines, the level of productive forces, as well as the relations of production and its relation and pressure exerted by imperialism. All of these must be dialectically assessed, to be used in formulating specific programs, strategies and tactics for organizing workers and awakening class consciousness, in line with the party program and strategy.

 

The question of data sourcing and statistics has always been a challenging task, since those readily available are commissioned by the bourgeois-liberal state apparatus and commissioning a separate statistical and data gathering team would prove to be resource-challenging for revolutionary parties. Questions of data integrity and manipulation hounds these statistical data and is only tempered by liberal-professional “values” currently existing in the statistical science field. However, for convenience and lack of alternative means, the data and statistics in this paper are sourced from government sources, and those readily available to the author.

 

Lastly, this labor situationer is not meant as an in-depth dialectical analysis of the Philippine labor movement, but rather a collection of data that the author thinks is crucial and relevant in formulating one.  

B. Labor Force Survey1

The country’s labor force was placed at 44.075 million as shown by the preliminary results of the January 2018 Labor Force Survey of the Philippine Statistics Authority (PSA). This translates to a labor force participation rate (LFPR) of 62.2 percent as the total population of 15 years old and over stood at 70.897 million for the period. Compared to the same period last year, the labor force increased by 1.97 million (or 4.7%) as against 42.109 million in January 2017 while the household population of 15 years old and over went up by 1.483 million (or 2.1%). Consequently, the LFPR went up by 1.5 percentage points (from 60.7% in 2017).


This is the total workforce of the Philippines, including those employed and willing to be employed although unemployed. It would be noticed that the lowest incidences of labor force participation rates are those either categorized as “highly industrialized” regions, such as the NCR, Regions III, IVA, or those in war-torn regions such as ARMM and Zamboanga peninsula (IX), which are all below the national average.


In the global scale, the Philippines’ labor force participation is almost equal to that of the highly industrialized nations such as the United States2 (62.9%), Russia3 (62.5%), United Kingdom4 (79%), Germany5 (61%), and relatively lower than ostensibly socialist nations such as Venezuela6 (62.7%), Vietnam7 (78.3%), China8 (68.9%), Laos9 (78.3%), save for Cuba10 (54.34%).


This means that compared to ostensibly socialist countries, more Filipinos prefer to stay at home (mostly housewives), studying or have retired. Of course, this does take into consideration the value of reproductive labor and the social character of labor, as the data gathered are using classical economic methods.

The reported employment rate in the Philippines was 94.7% (41,762,700) of the total labor force, which in turn translates into an average of 5.3% (2,337,300) unemployment rate. Again, the NCR, Region III and Region IVA suffer from a lower-than-average employment rate, and higher-than-average unemployment rate. These highly industrialized regions have a lower average labor force and higher unemployment rate. IBON Foundation, however estimates the current unemployment rate to 9.2% or 4.1 million workers11.

The service sector (23,330,000) still holds the most number of workers, followed by the agricultural sector (10,870,000), and lastly, the industrial sector (7,555,000), which can be further broken down as follows:

Grid1

Noticeable in the above table is the steady drop of the workers employed in the agricultural sector (-4.61%), vis-à-vis the steady shift towards industrial (.43%) and service (1.65%) sectors12.

This should be read together with the Overseas Filipino Workers (OFWs) estimated at 2.3 million13. Overseas Contract Workers (OCWs) or those with existing work contracts comprised 97.0 percent of the total OFWs during the period April to September 2017. The rest (3.0%) worked overseas without contracts14. Of the total number of OFWs, females (53.7%) outnumber males (46.3%), with Saudi Arabia as the leading country of destination (25.4%). followed by United Arab Emirates (15.3%), Kuwait (6.7%), Hong Kong (6.5%) and Qatar (5.5%).

The underemployed persons or those employed persons who express the desire to have additional hours of work in their present job, or to have additional job, or to have a new job with longer working hours were estimated at 7.5 million persons corresponding to an underemployment rate of 18.0 percent. Underemployed persons who work for less than 40 hours in a week are called visibly underemployed. They accounted for more than half (57.1%) of the total underemployed in January 2018. By comparison, the underemployed persons who worked for 40 hours or more in a week made up 41.1 percent.


C. Inequality, GDP/GNP, and wages

Despite growth in productivity and macroeconomic factors, the inequality quotient in the country remained virtually the same for the last twenty (20) years, with the Gini Coefficient ranging from 48% to 44%.16 The Philippines is ranked 33rd out of 151 in the least unequal countries in the world17.

Industry outliers in this category are the Business Process Outsourcing (BPO) industry which comprises five percent18 (5%) of our total GDP with more than 1 million workers and $15.5 billion (2015 data) total revenues, and the Overseas Filipino Workers which comprises ten percent (10%) of our total GDP with more than 2.3 million workers and $28.1 billion19 in remittances.

Labor productivity in the industry and agriculture sector have negative growth rates, suggesting a trend of shifting to service-related industries in the country.

Actual wage rates in the country do not move far from the established minimum wages per region. For example, in the NCR, the average pay per worker is Php542.16, only 30 pesos higher than the Php512.00 minimum wage rate in the last quarter of 2017. Of course, the data presented only represents establishment reports, and in no way truly represent the average basic wage rate of Filipinos. This is evident in the poverty incidence, also by PSA:

21.6% of the population is still living below the poverty threshold despite the growing economy and labor productivity. This stark inequality plaguing our country and the world can be traced to the internal contradictions of capitalism.


However, the Philippine Statistics Authority (PSA) currently pegs the poverty threshold at Php9,063.75 a month for a family of five, or Php60.43 per day per person. This is absurdly low and grossly underestimates the number of income poor in the country.

Most of the productivity and surplus value created by labor is funneled to the pockets of capitalists in the Philippines, with the accumulated wealth of the top wealthiest people in the country more than doubled in a span of three (3) years22.


D. Trade Union Situation
Trade unionism has been in a sharp decline over the recent decades. Most progressive labor federations and labor centers have little or no organizing and worker education activities, which has reduced trade unionism to mere economism or the struggle for economic gains. The ageing population of trade union leaders and organizers has also been a constant problem and adds to the decline of the sector.

There is a virtual lack of any new labor federation or labor center being registered in the recent years. Union membership and union formation has been stagnant, with only an average of one percent (1%) increase per year, compared to the 1.6% growth in labor force per year.


As of 2015, there are only 1,148 existing collective bargaining agreements (CBA), covering 190,000 workers, out of the total 1,964,000 union-members nationwide. It should be noted that even though the number of union members are increasing, the number of workers covered by CBAs are decreasing at the rate of 8%.

It can be noticed in the data of CBA provisions that most are lackluster even in the economic provisions. In 2015, out of 298 newly filed CBAs, only 227 contained wage increase provisions! This means that there are 71 unions with CBAs in 2015 who did not receive even the basic wage increases. The data on other provisions are also bleak and most CBAs can be considered as below par.

 

Vacation leaves (252) and sick leaves (243) are the most common provisions among the rest, while maternity, accident and menstrual leaves, profit sharing, workers education, service charges, baptismal gifts and livelihood programs are virtually
inexistent.

The data above shows the number of trade unions per industry, as per government survey. However, it can be noted that this data, which was also commissioned in 2015, has conflicting data with the one previously used (also 2015) by the Philippine Statistics Authority. This table shows that there are 1958 establishments with CBAs, while the previous table showed only 1148 existing registered CBAs. Maybe there are multiple establishments covered by a single CBA, but that would be contrary to existing labor laws.

 

Nevertheless, the data above shows that the service sector (construction, wholesale, transportation, accommodation, ICT, financial and insurance, real estate activities, admin and support, professional and scientific, education, social work, arts and recreation and repair) remains to be the industry with most unions at 908, while the manufacturing industry (manufacturing, mining and quarrying) is a close second with 810 unions. The agriculture sector is the least unionized, with 139 unions.

 

Also, in the previous data, it was stated that there are 19,067 existing unions in the Philippines, as opposed to the above data showing only 2059 establishments with unions. That is a ratio of 1:9.26. It should also be noted that in the Online Union Verification Portal25 of the Bureau of Labor Relations, there are only 17096 unions recorded as of 2018:

E. Local challenges facing the Filipino working class
E.1 TRAIN Law and the rising prices of commodities
2018 has ushered a daunting challenge for the Filipino working class. The effects of the TRAIN Law have been so massive and devastating, especially those earning roughly Php25,000.00 or less per month – which have no benefit from the income tax adjustment provisions of the Tax Reform Inclusion and Acceleration Law (TRAIN). The rising prices of goods and services brought about by the inflationary effect of this regressive tax policy has been directly felt by the working-class’ stomachs.


An overwhelming majority of the provisions of the Tax Reform Inclusion and Acceleration Law (TRAIN) are regressive in nature – meaning, the tax measures do not take into consideration the capacity to pay of the taxpayer sought to be taxed. Examples of this regressive nature of the TRAIN would be the additional and new taxes on petroleum, sugar and sugary products and value-added taxes. The lowering of donors and estate taxes is also a downright dole-out to the elite of this country, since working classes are not affected in any way from these types of taxes. The only progressive feature of the TRAIN would be the rationalization of personal income taxes, which exempts from income taxes those earning Php250,000.00 and below per year. This translates to a monthly income of Php25,000.00 and below.


Inflation rate has been the highest since 2013 and is breaking all government projections. The July 2018 inflation rate is currently pegged at 5.7%. The country’s food index alone went up by 5.8 percent in June 2018. It was posted at 5.5 percent in the previous month and 3.1 percent in June 2017.

 

Higher annual mark-ups were observed in the indices of the following food groups:
• Rice (4.7%);
• Corn (14.1%);
• Other Cereals, Flour, Cereal Preparation, Bread, Pasta and Other Bakery Products (2.4%);
• Meat (5.0%);
• Vegetables (8.6%);
• Sugar, Jam, Honey, Chocolate and Confectionery (3.9%); and
• Food Products not Elsewhere Classified (3.1%).

 

Accelerating inflation since the start of the year has eroded the incomes of the country’s poorest families. Research group IBON estimates that the poorest 60 million Filipinos have suffered income losses of anywhere from Php993 to as much as Php2,715 because of worsening inflation since the start of 201827. IBON estimates that in the first six months of the year so far, households in the poorest first decile with Php7,724 monthly income have cumulatively lost Php993 due to inflation, those in the second decile (Php10,711 monthly income) have lost Php1,377 and those in the third decile (Php12,835 monthly income) have lost Php1,650. Households in the fourth decile (Php15,132 monthly income) have lost Php1,945, those in the fourth decile (Php17,309 monthly income) lost Php2,225, and those in the sixth decile (Php21,119) lost Php2,715.

 

TRAIN 2
The second package of the TRAIN consists of the lowing of corporate income taxes from 30% to 25%28, removing income tax exempt statuses of schools and hospitals administered by religious organizations29, and “modernization” of incentives to businesses.

E.2 Provincial wages
This sudden and rising increase in commodities has not been met with a commensurate increase in salaries and wages. In fact, this administrations’ economic managers discourage any increase in minimum wages32. Budget Secretary Benjamin Diokno said that an increase in minimum wages will exacerbate unemployment. As a result, as of this date, only 9 out of 17 regions have increased their minimum wages, which only ranges from P8.50 up to P56.4333.

These spare changes to already existing “starvation wages” are rampant throughout the whole country. With the advent of the Wage Rationalization Act, the wages per region fluctuate from the highest of Php512.00 in Metro Manila, to the lowest of Php255.00 in ARMM.

 

According to a study by the Ibon Foundation, a family of six (6) requires Php1,175.0034 daily to live. The group also said that the assertion that TRAIN “increased the take-home pay of 99% of income tax payers” is grossly deceitful because they know that only around 7.5 million or one-third (33%) of Filipino families are income tax payers. Of these, some two (2) million were already exempt from paying income tax even before TRAIN because they were only minimum wage earners. This means that 17.2 million or over three-fourths (76%) of Filipino families suffer inflation but without any increased take-home pay.


In contrast, the National Economic Development Authority pegged the living wage at Php42,000.00 per month for a family of five35. The latest Family Income and Expenditure Survey (FIES) reports about 20 million or 88% of Filipino families with incomes less than Php42,000. This is for all family sizes, but, in any case, the country’s average household size is 4.4 persons.

 

E.3 Contractualization36
Contractualization dates back from the cabo system – a labor arrangement that proliferated during Spanish colonialism. Cabos acted as labor negotiators and suppliers to companies and project or contract-based (pakyao) jobs. The system was commonly practiced in small-time construction companies, maritime companies that hired stevedores, and in haciendas that hired seasonal plantation workers.

 

In the 1850s, sacadas (poor peasants from other provinces) were contracted to work in sugar plantations in Negros through this system. Employed by hacienderos, cabos encouraged sacadas to migrate to the sugarland of Negros and work in plantations on a seasonal basis. Later, the subcontracting practice proliferated in modern export crop plantations especially in banana and pineapple plantations operating in Mindanao.

 

During US colonialism, the US colonial government implemented a system in labor relations, which was anchored on fake trade unionism and discouraged the cabo system. At that time, only unionized workers were eligible for employment. With the introduction of trade unionism and the prohibition of labor-only contracting, the cabos were compelled to utilize unionism as a facade. Cabos established their own unions even without employers to bargain with and penetrated existing unions to retain their power. The cabos became the first batch of notorious labor leaders who, instead of upholding workers’ rights to better wages and employment conditions, functioned as labor suppliers.

Former President Ferdinand Marcos used martial rule’s dictatorial powers to orient the Philippine economy to serve the demands of foreign corporations for cheap labor, cheap resources, and captive markets. To improve the investment climate and give foreign capital profitable opportunities in the country, the Marcos dictatorship enacted laws aimed at depressing workers’ wages through labor flexibilization.

 

In 1974, Articles 5 and 106 to 109 of the Book on Conditions of Employment of the Labor Code gave the DOLE Secretary the power to issue regulations and guidelines as to how companies can carry out labor contracting.

 

Two years after the issuance of PD 442, contractualization was institutionalized in the construction industry when former DOLE Secretary Blas Ople issued Policy Instructions No. 20-76 which provided the definition and rights of project and non-project construction employees allegedly to stabilize employment relations in the industry.

 

Project employment is a form of contractualization; the contract is based on a specific task or project with a clear duration. Although project employees are directly hired by employers, there is an absence of an employee-employer relationship between the project employee and the principal employer throughout the duration of the contractual employment. Thus, the anti-labor characteristics of project employment also denies workers not only of their right to security of tenure but also of their right to unionize and negotiate for better wages and benefits with principal employers.

 

In 1993, former Labor Secretary Nieves Confesor issued DO 19, which provided the guidelines governing the employment of workers in the construction industry. DO 19 affirmed the legality of contracting and subcontracting in the construction industry by providing the conditions of employment and the liabilities of employers and contracted workers.

 

Contractualization was institutionalized across all economic sectors in 1997 during the administration of President Fidel Ramos when former Labor Secretary Leonardo Quisumbing issued DO 10, which amended the rules implementing Books III and VI of the Labor Code. The amendment prohibited labor-only contracting but affirmed the practice of “permissible” contracting and other flexible employment arrangements and recognized the legitimacy of trilateral employment relations “for the purpose of increasing efficiency and streamlining operations is essential for every business to grow in an atmosphere of free competition.”

 

After the issuance of this order, contractual work arrangements have become rampant across all economic sectors in the country. The debilitating impact of the proliferation of contractualization was immediately felt and consequently stirred massive protests throughout the country. The strong clamor to repeal contractualization compelled the Arroyo administration to temporarily revoke DO 10 through the issuance of DO 3 by former Labor Secretary Patricia Sto. Tomas in 2001. After one year, however, the anti-labor and market-biased order was essentially restored through the issuance of DO 18-02 by the same Labor Secretary.

 

In 2011 during the administration of Benigno Aquino III, then Labor Secretary Rosalinda Baldoz added more requirements to existing guidelines on contracutalization through the issuance of DO 18-A. Included is the imposition of a minimum capitalization requirement of at least Php3,000,000 pesos. The latest order, DO 174, amending the guidelines on contractualization was signed on March 16, 2017 by Labor Secretary Silvestre Bello III.

The current situation of contractualization in the country is out of control, according to the latest 2014 survey of the PSA, 3 out of 10 employees are contractual, or approximately 1.3 million workers in establishments employing 20 or more workers:

In the government data, service activities show the greatest incidence of contractualization, followed by manufacturing and construction industries. However, IBON estimates 63%37 of our labor force, or 24.4 million Filipino workers are non-regular, agency-hired, informal sector or unpaid family workers who are in low-paying and insecure work with poor or no benefits as of 2016. With no end in sight, the Filipino working class situation would only worsen in the years to come.


F. Imperialism and its “invisible” hand in the Philippines
The effects of Imperialism are readily felt by the Filipino proletarian, although not ostensibly attributable. The amount, quality, and type of work available in the labor market is dictated by a few imperialist countries and its pressure to the local market. This invisible hand, however, cannot escape the data on the amount, type, kind and volume of export and imports in the country. Exports and imports39 is the State’s way of relating to other States, economically.


The June 2018 data shows a massive “flipping” of the growth rate in our exports and imports. On the same date in 2017, exportations have a growth rate (17.1%) and importations have plateaued (0.6%). Come 2018, these figures were totally reversed, exportations having plateaued (-0.1%) and importations are growing (24.2%), which can be shown in this graph:


The sudden shift in the export-import quotient can be partly attributed to the local policy shifts brought by the TRAIN Law and other policies of national departments. The volume of mineral products being exported starkly dropped 56.6%, while coconut oil exports increased by 15.7%.

On the other hand, the country has increased imports of iron and steel and cereals, which includes rice. This trend reflects the administrations build-build-build project (iron and steel imports), as well as our rice insufficiency (cereals).

A cursory look at the top exports and imports would confuse an outsider – how come the Philippines top export and import is both “electronic products’? This is because the exported “electronic products” are merely assembly parts such as semi-conductors, which will be used for the final assembly of the electronic product, which will then be imported back to the country as a commodity!

And where do these imports and exports flow to and from? Data shows that most of these trade commodities come from China, and we export mainly to China (Hong Kong being a administratively controlled by China) and USA. Raw materials such as nickel, which the Philippines is a global leader in production, goes mostly to China.

Notice that the amount of Nickel (direct shipping ore) exponentially grew in 5 years’ time, a growth rate of more than 300%!


The effects of imperialism can also be felt with the current policy of labor migration in our country. Previous data has shown that out of the 2.3 million OFW’s, Saudi Arabia is the leading country of destination (25.4%), followed by United Arab Emirates (15.3%), Kuwait (6.7%), Hong Kong (6.5%) and Qatar (5.5%).

35% of OFW’s perform elementary occupations such as domestic help, drivers and construction workers, followed by 20% service and sales workers in malls, supermarket and hotel chains. Sadly, the data available on local and international migration patterns is only from 2010:

Among the 81.9 million population five years old and over enumerated in the 2010 Census of Population and Housing (CPH), 96.5 percent were non-movers. These are persons whose city/municipality of residence in 2010 was the same as in 2005. 120,000 out of the total 2,860,000 movers are immigrants to other countries – which should be included in the labor migration data as shown above.


Lastly, the current shift from industry and agriculture, to service workers comprising 55.9% of our labor force. Most of these service workers, 2.3 million of them, are in the call center and BPO industry – to service imperialist private corporations.

 

G. Organized labor movement and united labor fronts
Bleak as the prospects may be, there is currently a brewing broad united front of organized labor happening in the periphery. This year has witnessed a historic “unity”, with NAGKAISA (composed of Partido Manggagawa (PMP-140), SENTRO, TUCP, FFW, and recently, AGUILA) and Kilusang Mayo Uno (CPP) conducting a joint Labor Day rally. Other conventional labor blocs, namely Bukluran ng Manggagawang Pilipino (PMP-2), Socialista (Bloke), Makabayan (MLPP), and AGLO also held a joint labor day rally. AGUILA and NCL joined the NAGKAISA-KMU march.

 

The country has not seen this level of “unity” in the labor movement since the pre-schism CPP days. Much work is left to do and to explore in this field, especially with the groups composed of “Rejectionists”. The Reaffirmist National Democrats’ genuineness and motivations in this “policy-shift” needs to be thoroughly assessed by the party and is crucial to formulating a general policy towards this “unity” with them. Alex Aug 20, 2018