Economic managers moonlighting as employers’ spokespersons—labor group

 

The labor group Partido Manggagawa (PM) slammed National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan and Finance Secretary Benjamin Diokno for “moonlighting as employers’ spokespersons” with their doomsday predictions about a P150 legislated wage hike is approved by Congress.

 

“Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr. also warned of job losses, price hikes and economic slowdown if wages are raised. Government’s economic managers and employers’ representatives are both painting the same apocalyptic scenarios without any substantiation,” stated Rene Magtubo, PM spokesperson and Marikina City councilor.

 

He added that “Our own economic modelling shows that salary increases will have an insignificant impact on both employment and inflation contrary to Balisacan and Diokno’s claims. Empirical studies for other countries also show similar results.”

 

PM cited that Indonesia, which is similarly situated as the Philippines as a middle-income country with a large informal economy, raised wages by some 50% in 2011 and 2012 without negative effects on prices, employment and GDP. In comparison, a P150 wage hike redounds to just a 25% boost in the minimum wage in Metro Manila.

 

“Raising wages improves living standards and has a secondary effect of increasing worker motivation and morale and thus labor productivity. Further, salary hikes in the formal sector also increases incomes in the informal economy through the so-called lighthouse effect. That is, the rise in formal sector wages signal to the rest of economic actors what a socially acceptable income should be. Finally, Balisacan’s own NEDA admits that GDP growth in the Philippines is primarily driven by household consumption and thus increasing the purchasing power of workers will have a positive effect on the economy,” Magtubo explained.

 

He furthered that “Balisacan and Diokno conveniently forget that government’s own data confirm that from 2001 to 2016, real wages were stagnant but labor productivity grew by 50% while GDP doubled. In other words, the economic pie expanded but the slice given to workers remained the same and employers monopolized all the growth. Why are they silent on this?”

 

PM contended that the P150 legislated wage hike seeks mainly to recover the lost value of workers’ wages and not yet to partake of the increased labor productivity. “Even a P150 will not raise workers’ wages to the level of a living wage, which today stands at around P1,300 per day and increasing due to unabated inflation,” Magtubo insisted.

Press Release

August 17, 2023

Labor yearender: Incomes and jobs crisis pummeled workers in 2022

 

Despite the economy sustaining its recovery from the recession induced by the pandemic, workers nonetheless faced a worsening incomes and jobs crisis in 2022. Thus, while small businesses were slowly recuperating, formal and informal workers continued bleeding from wage and income erosion, job losses, and a fall in employment quality.

 

Inflation ratcheted up for the whole year, from 3.0% in January 2022 to 8.0% in November. No doubt prices rose even more in December. By October 2022, the 7.7% inflation had cut P76 off the P570 minimum wage of workers in Metro Manila since the latest wage order was implemented on June 4, 2022. This meant that the P33 minimum wage increase in June had effectively been eradicated by year’s end and further that workers were owed more. Inflation was even worse outside Metro Manila. This led to the clamor from the labor movement by the last quarter of 2022 for a new salary hike.

 

Partido ng Manggagawa called for a P100 nationwide across-the-board legislated increase while the labor group Kapatiran ng mga Unyon at Samahang Manggagawa filed a petition for a P100 minimum wage hike in the NCR wage hike early this month. The Employers Confederation of the Philippines opposed a wage hike using the disingenuous argument that MSMEs cannot afford it. Despite runaway inflation, the government played deaf to the demand and stuck to the myth that there was no supervening condition that existed to warrant a new round of wage hikes.

 

The government trumpeted the return of employment figures to pre-pandemic levels. By October 2022, unemployment was at 4.5%, exactly the same rate as in October 2019 before COVID-19 struck. But while the quantity of jobs may have returned, the quality of jobs worsened. More people were working part-time instead of full-time. Underemployment—or the people wanting more hours of work—jumped from 13.0% in October 2019 or 5.62 million Filipinos to 14.2% in October 2022 or 6.67 million. This translates to more than a million Filipinos working as casual, contractual or informal in 2022 or a rise of 19% compared to pre-pandemic levels of underemployment.

 

As part-time employees working as casual, contractual or informal, they would be suffering from lower remuneration, not enough benefits, less job security, lack of social security and unsafe working conditions. In other words, these employed but vulnerable workers in the post-pandemic context are still harmed by decent work deficits. More Filipinos are back to work but in bad jobs.

 

A reflection of this phenomenon is revealed in the plight of delivery riders. No doubt, there were more of them as essential workers during the pandemic. But an upsurge of protests among delivery riders express the decent work deficits of Filipinos working as independent contractors rather than as full-time regular employees. Almost all of these protests originated from grievances over steep declines in incomes as app arbitrarily cut their “commissions” while the cost of fuel rose continuously. This contradiction exposes the risks of app-based work where part of the business costs has been passed on to so-called freelancers while platforms continue to exercise control over their work. This year, Grab riders in General Santos, Cebu and Pampanga, together with Grab cyclists in Metro Manila, all held mass actions to highlight their demands. In a pioneering initiative, the Iloilo Grab Riders Union was formed in November, which will test the employee-employment relationship between workers and the apps.

 

While the unemployment may have been to normal—which is not saying much—the hemorrhage of jobs continues. In September 2022, some 4,000 workers across the five factories of the Sports City group of companies in the Mactan Economic Zone were laid off, arguably the biggest mass termination this year. That the mother of all layoffs at Sports City was not a one-time, big-time event was confirmed by the industry association CONWEP which stated in October 2022 that up to 4% of the 270,000 apparel workers have been laid off this year.

 

Workers in export zones such as garment and electronics are especially at risk due to global supply chain disruptions. With the threat of a government dipping its fingers on their pension funds and prospects of a global recession ever higher, Filipino workers should brace for bad rather than good tidings next year.

Partido Manggagawa

December 27, 2022

A national bank, strategic employment program needed in place of Bumbay system

They make a killing in doing their trade, but motorcycle-riding ‘Bumbays’ give life to enterprising Pinoys who are in dire need for cash.  Their existence, therefore, has become socially-compatible over time compared to the hooded riding in tandems who roam communities to kill their targets.

 

Yet we agree to the plan that their usurious loan practice is put to an end.  But an alternative to 5/6 system must be formed or less the Duterte administration is just creating new problems to replace the old ones.

We believe an alternative program can easily replace the 5/6 system.  A national bank or a national lending program that cater to the needs of the poor can surely take its place. Without this needed replacement, the government will only push the system further into the black market where more notorious financial sharks operate.

 

Furthermore, an elaborate national employment program must be organized to bring down the number of workers in the vulnerable sector of the economy.

 

The Bumbays operate without permits and we have the anti-usury law that prohibits the system. But this is the kind of arrangement that flourishes in the mainly underground market that dominates the Philippine economy. They make small loans to small people. This is the practical economic reason why the system gained mutual agreement in poor communities where a big number of unemployed and underemployed members of the labor force are in desperate struggle for sources of livelihood. 

 

For where should you go if you need a small, quick, and hassle-free loan to jump-start or sustain a small, unregistered enterprise like a sari-sari store, carinderia, a repair shop, among others?  Definitely you are not welcome to any commercial bank that imposes stringent requirements for a loan, including collateral.  And here comes a friendly Bumbay in the neighborhood who has the solution.

 

Of close to a million registered businesses in the country, more than 90 per cent are considered micro-enterprises or those with capitalization of less than PhP 3 million and employing not more than 10 people.  The government has no data on how many are actually involved in the underground economy--the vulnerable families who fall victim to financial sharks that are not exclusive only to the Bumbays.

 

As of October 2016, 60.8% of the labor force is considered wage and salaried workers. The rest are either unemployed or working on own account or sariling sikap. Underemployment is at 18 per cent.

11 January 2017

Labor party opposes tax on tiangge, political contributions

PRESS RELEASE
06 November 2009

Describing the scheme as anti-poor and oppressive, a labor partylist group Partido ng Manggagawa (PM), denounces the plan by Malacañang to impose taxes on tiangge as well as on political contributions for political parties, including partylists.

According to PM Secretary General Judy Ann Miranda, the plan to impose taxes ontiangge operations is a sinister way of shifting the burden of failed revenue collection to the poor. This was after the Bureau of Internal Revenue (BIR) admitted huge shortfall in its revenue target this year and which eventually led to the resignation of BIR Chief Sixto Esquivias IV.

“Instead of making convincing explanations on why the BIR missed its targets, Malacañang is now convincing the tiangge operators to make up for its shortfall. It’s like telling a Baclaran vendor to make up for the members of the PCCI and foreign chambers of commerce,” said Miranda.

“This is besides the fact that their buy-and-sell products have already been subjected to VAT and other taxes,” added Miranda.

Miranda said the scheme is patently anti-poor and oppressive since those who are engaged in tiangge, especially the small ones, belong to the informal sector (own account workers or the self-employed) – a big part of the of the labor force who are without regular work. Ninety nine percent of these workers are engaged in small buy-and-sell business, transport, and personal services, among others. Own account workers account for 12.083 million of the country’s labor force of 35.509 million in the July Labor Force Survey. Aside from that, most of those who render help for own account workers belong to what are called ‘unpaid family workers’, which now count to 3.828 million.

“Clearly, this sector needs support from the State not new forms of oppression through taxation especially in the face of ripping calamities,” stressed Miranda.

Meanwhile, the labor party is also opposed to the 5% tax on political contributions, saying the government should never consider counting revenue out of political exercise.

Miranda pointed out that while election-related businesses such as supplies can be considered taxable incomes, contributions to sectoral parties, like the PM Partylist whose contributions mainly came from ordinary workers, is not.

“A worker’s income have already been taxed before it reaches his hands, why tax it again if he/she contributes part of it for his/her political party?,” protested the group.

PM said Mrs. Arroyo better focus on ensuring good election process rather than generating funds from her rival parties.