This document discusses the effects of globalization on productivity-based compensation arrangements and decent work. It begins by defining compensation and its components, including monetary rewards, non-monetary rewards, and psychological rewards. It then discusses the rationale for variable compensation systems and three forms of productivity-based compensation arrangements: time rate systems, payment-by-result, and franchising/joint venture arrangements. The document analyzes the implications of these arrangements in the Philippines, including effects on employment, wages, labor costs, and the informal sector.

1. Effects of Globalization to
Productivity-based Compensation
Arrangement & Decent Work
Prof. Jorge V. Sibal
Oct. 12, 2006

2. Compensation & Decent Work
 Compensation and decent work usually go
hand-in-hand. Higher wage means more
decent work.
 But today, this may not be true anymore.
A worker may not receive any wage (only
non-wage rewards) but may be able
achieve decent work. Or vice versa, a
worker may receive high wages but not
decent work.

3. What is compensation (Milkovich and Newman 2002)
Compensation- all forms of financial returns
and tangible services and benefits employees
receive as part of an employment relations.
 used interchangeably as pay
 applies to all types of workers, whether
employed or self employed, and those in the
formal and informal sector
 unpaid family workers and own account workers
in the informal sector are compensated in terms
of tangible services and benefits in doing work

4. Components of Compensation
1. Monetary rewards (or pay)
2. Non-monetary rewards (or employee
‘fringe’ benefits)
3. Psychological rewards

5. Components of Compensation
1. Monetary rewards (or pay)
- base pay, supplemental pay like
overtime premium and night shift
differential, cost of living allowances,
seniority pay, merit pay, incentives pay
and knowledge or skill-based pay.

6. Components of Compensation
2. Non-monetary rewards (or employee ‘fringe’
benefits)
- leaves (vacation or service incentives, holiday,
sick, maternity/paternity, solo parents and other
leaves); insurances (life, health, hospitalization
unemployment and disability); retirement and
savings/pension plans; legally required benefits
like social security, medical care, disability,
unemployment insurance, etc.; & performance-
based benefits like bonuses, profit sharing and
other forms of gain-sharing rewards.

7. Components of Compensation
3. Psychological rewards
- recognition, status, employment
security, work challenge and learning
opportunities.

8. Rationale for
Variable Compensation System
 Globalization broke the assembly line production
system into decentralized offshore operations as
a result of electronic based machines and
internet communications technologies and wide
wage differentials between the developed and
less developed economies.
 There has now been a rapid shift to variable
compensation system and outsourcing as the
key to survival and growth.

9. Productivity-based compensation
arrangements (variable pay)
 Compensation other than base wages or
salaries that fluctuate in accordance with
the employees’ attainment of some
standard work output.
 These outputs are measured in terms of a
pre-established formula, individual or
group goals, contract or company
earnings.

10. 3 Forms of productivity-based
compensation arrangements
1. Time rate compensation system that
incorporate merit-based incentives or
benefits adjustments, overtime pay,
commissions, night shift differentials, tips
and other service charges, and payment
in kinds.

11. 3 Forms of productivity-based
compensation arrangements
2. Payment-by-result like piece rate work,
productivity bonuses, stock-option
benefits, work-improvement incentives,
etc. Payment-by-result is either
individualized or group-based.
3. Franchising and joint venture
arrangements for self-employed and
own-account workers.

12. Wage Determination
 determined by the supply and demand, as
well as the quality of labor
 if the determination of wages is left alone
solely to employers and workers, the
result would tilt more in favor of the
employers and the workers and their
movement will likely be radicalized.

13. Government Intervention
in Wage Determination
 minimum wage fixing
 collective negotiations with unions
 safety nets and consumer subsidies
 third party arbitration
 Regulation of both internal and external
labor mobility

14. Result of government intervention
in wage determination
 more equitable income distribution in the
more developed countries
 Intensified wage inequities among the
developed and less developed nations

15. 4 Objectives of compensation
administration (Srivas de Silva of the ILO)
1. Equity- to narrow income inequity by
protecting the purchasing power and real
wages of the workers.
2. Efficiency- to link cost and reward of
labor to productivity to allow employers
reasonable profits for growth and
expansion.

16. 4 Objectives of compensation
administration (Srivas de Silva of the ILO)
3. Macro-economic stability- to attain a
balanced and sustainable economic
development through high employment
and low inflation.
4. Proper allocation of labor in the labor
market- to administer internal and
external labor migration.

17. Objectives of the Study
Identify and explain:
 the productivity-based compensation
arrangements that have evolved in the
Philippines as globalization intensified; and
 the extent of government regulations on these
new mechanisms and how these mechanisms
have contributed to equity, efficiency, macro-
economic stability and proper allocation of labor
in the labor market.

18. Implications to the Philippines
 During the 1950s when Japan was
replicating American and western
technologies via “reverse engineering”, the
Philippines adopted the ISI strategies and
was second to Japan in industrialization
and economic growth.
 After 50 years however, “we are not only
lagging behind, we are almost dead last in
the [ASEAN] region” (Lucio Tan 2006)

19. Implications to the Philippines
 The Philippines did not fail miserably
considering that it has grown moderately
within the world’s fastest growing region.
 Despite its educated and creative people
and natural resource endowment, the
country continues its hit-and-miss
methods in the formulating and
implementing the EOI strategies.

20. Implications to the Philippines
 One possible roadblock toward industrialization
is its policy on compensation.
 With an institutionalized labor and social
standards in place that are equal or better than
other Asian countries, it offers better protection
for decent work at least for workers in the formal
sector that is comparable with the more
advanced tiger economies.
 This may attract investments for high technology
production and services operations but not on
the low end.

21. Implications to the Philippines
 The country is indeed placed in a tight
squeeze since it is also competing for the
low end manufacturing and services
businesses due to its high unemployment
and underemployment as a result of the
‘jobless growth’ phenomenon and high
population growth rate.

22. Positive effects of globalization to Asia
 New jobs for wage workers especially in the
export processing zones (EPZs), in addition to
new technologies transferred and adapted.
 Provided better alternatives to local workers
especially the women workers who were
offered alternatives for urban informal
employment or agricultural employment.
 The informal sector indirectly benefited from
the increased incomes of formal sector
workers.

23. Negative effects of globalization to Asia
1. Industries shifted to greater capital intensity
resulting to ‘jobless growth’ both in agriculture
and manufacturing
2. Over-all unemployment rate increased & labor
market conditions probably deteriorated for
unskilled workers
3. Increased inequality between urban & rural
income, and skilled & unskilled workers
4. Increased flexibilization and informalization of
production and employment relationship.
(UNDP Asia-Pacific Human Development Report 2006 on “Trade and Human
Development, The Asia-Pacific Experience” & ILO 2002)

24. Philippine Experience in Globalization
and Industrial Development
 Compared to the Asian tiger economies, the
Philippine industrial sector has not performed
well in the last three decades even after it has
joined WTO in the last 10 years.
 Faced with lower tariffs on imported goods,
domestic producers are handicapped with high
power cost, inadequate infrastructure,
government red tapes and corruption, and shaky
peace and order situation.

25. Philippine Experience in Globalization
and Industrial Development
 Many manufacturing and agricultural
enterprises closed down due to lack of
preparations, safety nets and unfair
playing field where smuggled goods
abound in the market.

26. Share of Manufacturing to Total Output
(1980-2004) Select Asian Economies
50
45
40
Percent share
35
30
25
20
15
10
5
0 In d o n e s ia M alays ia P h ilip p in e s T h ailan d Vie tn am C h in a
1980 15.2 19.6 27.6 23.1 19.2 44.2
1990 20.7 23.8 24.8 27.2 12.3 37
2000 27.7 31.1 22.2 33.6 18.6 43.6
2004 28.3 30.8 23 35.2 20.3 46
Source: ADB Key Indicators 2001, 2003, 2005. Note: for China manufacturing also includes mining,
electricity, gas and water

27. Philippine Experience in Globalization
 The Philippine growth pattern was
characterized by the increase in services
with agricultural and industrial sectors
declining.
 As of 2000, more than half of the country’s
employed labor force which used to be in
agriculture was absorbed by the service
sector.

28. Philippine Experience in Globalization
 The Philippine growth rate was driven by
domestic demand and consumer spending
unlike the Asian tiger economies where
exports led the economic growth.
 The economy failed to grow fast enough to
provide jobs for the labor force.

29. Philippine Experience in Globalization
 Despite the weakening industry and
agriculture sectors, the economy grew by
6% in 2004.
 The World Bank (2005) described this as
the fastest in 16 years.

30. Factors that contributed to
Philippine growth
 the electronics industry and offshore
business process services estimated at
$3.8 Billion in 2006;
 inflow of earnings of overseas Filipino
workers (OFWs) amounting to $11.6
Billion in 2005; and
 gross international reserves of $20.58
Billion in 2006

31. Effects of Globalization on
Employment and the Labor Market
 Many enterprises adopted lean and mean
structures- managed by a small group of
professionals and technical staff with
multi-skilled workers operating the core
businesses activities and a large group of
contractual or outsourced workers.

32. Effects of Globalization on
Employment and the Labor Market
 The core of professionals, technicians and
operators are adequately trained and
compensated. The peripheral workers on
the other hand barely received minimum
wages and benefits mandated by the
Labor Code and other social legislations.

33. Effects of Globalization on
Productivity
 The country’s productivity increased only
at 1% per year on the average in contrast
with 4.4% average of neighboring
countries (China, Indonesia, Korea,
Malaysia, Singapore, Taiwan and
Thailand) or 1.4% for all developing
countries.

34. Reasons for Low Productivity
 High costs of doing business. The
Philippines has the highest power rates in
East Asia. Electricity is as high as 41% of
operating cost compared to only 10% in
Malaysia.
 High underemployment in agriculture and
services industries in the informal sector.

35. High Productivity in Manufacturing
 Despite high power costs, labor
productivity in manufacturing industries
was high.
 Labor productivity in manufacturing from
1980 – 1991 grew at an average of 8.9%
while the nominal wage of workers grew
only at 6.1% average.

36. Effects on Wages and Cost of Labor
Real and Nominal Daily Wages in the Philippines, 1991-2003
300 Nominal daily wage- agri.
250
Nominal daily wage- non-
200
agri.
150
Real daily wage- agri.
100
50 Real daily wage- non-agri.
0
Line 5
1
2
5
6
8
9
3
4
7
0
1
2
3
199
199
199
199
199
199
199
199
199
200
200
200
200
Source of Basic Data: Bureau of Agricultural Statistics and BLES, real wages based on 1995 prices)

37. Labor cost in the Philippines
 The Philippine manufacturing labor cost per year
of $2,450 was more expensive than China
($729) and Vietnam ($711) but cheaper than
Singapore ($21,317), Thailand ($3,868),
Malaysia ($3,429) and Indonesia ($3,054).
 What is important for business is not the cost but
the skills of labor. Training costs accounted for a
mere 0.76% of the total labor cost in non-
agricultural firms. Manufacturing firms spent
much less at 0.57% on the average.
 Companies can easily cope up with globalization
with a highly skilled workforce

38. Labor Flexibility Evident
 Flexibility in labor cost in the formal and informal
sectors of the economy is evident in the country.
 The big firms (200 or more workers) have higher
labor costs at 23.5% since they required more
skilled workers.
 Labor costs of firms with 20-99 workers is only
19%, lower than the average labor cost in non-
agricultural firms at 21%. Manufacturing, which
has high productivity, has a low labor cost at
20%. This may be explained by the employment
of contingent workers.

39. Average wages received are higher than
minimum wages
 Unskilled workers were paid higher than
the minimum wage rates.
 As of the first quarter of 2006, the
establishments inspected which violated
minimum wage standards was down to
15% from the previous year of 22%
(DOLE BWC 2006)

40. Wages in the Formal Sector
 Monthly wages are highest at the financial
intermediation industry at P14,857 ($288).
 This was followed by electricity, gas and
water (P13,612 or $264), private
educational services (P12,043 or $234),
and transport, storage and communication
(P10,303 or $200).

41. Wages in the Formal Sector
 The lowest wages were in real estate,
renting and business activities (P6,687 or
$130); construction (P6,798 or $132);
hotels and restaurants (P6,903 or $134);
manufacturing (P6,934 or 135); and
wholesale and retail trade (P7,031 or
$136).
 These 5 sub-sectors have the highest
levels of non-regular/contractual and
agency-hired workers.

42. Compensation in the Informal Sector
 The informal sector employed 20 million
workers or 65 percent of the employed
labor force in 2003. These workers do not
enjoy safety nets.
 Cost of labor in the informal sector can not
be accurately recorded since most of the
workers are unpaid family workers,
domestic helpers and own-account
workers.

43. Compensation in the Informal Sector
 In a 2002 survey of contractual workers in Metro
Manila, the Laride reported that 2/3rds of their
respondents earned between P100 ($1.94) to
P250 ($4.85) per day.
 Majority were not covered by the SSS. Half of
them lived in one-room house with a bathroom
annexed. 45% had no separate bedroom; 72%
did not have a dining area; and 50% did not
have running water.

44. Importance of the informal sector
 In 2003, micro-enterprises (1-9 workers)
and small enterprises (10-99 workers)
accounted for 99.3 percent of all
establishments in the country.
 Employment generation is therefore very
dependent on the viability and growth of
these enterprises.

45. Effects on balancing work and family life
& flexible work arrangements
 Foreign-owned companies, companies with
foreign equities and those with unions provided
more decent work. Foreign-owned companies
or those with foreign equity are usually tied up
with the global chain of production and
marketing. They are normally subjected to
compliance standards. Unionized firms also
have more decent workplace because of the
high awareness and vigilance of trade unions in
the local and international labor standards.

46. Effects on balancing work and family life
 More than 60% of establishments implemented
balanced work and family life programs in 2003.
The percentages were higher in foreign-owned
companies (79%), companies with foreign
equities (68.9%) and in unionized companies
(65.4%).
 More than 50% allowed extended maternity and
paternity leaves without pay. The practice of
flexible work arrangement ranged from 31% (for
unionized) to 42%. Facilities for employees with
children were minimal in most establishments at
a range of 3.5% to 6.5%

47. Effects on flexible work
arrangements
 Half of the firms practiced sliding flexible works
arrangements, higher in foreign firms, local firms
with foreign equity and in non-unionized
companies.
 Compressed workweek ranged from 30% to
39%, or higher in foreign companies and in
unionized firms.
 On-call arrangement was lower at a range of
16% to 31%, or lower in foreign companies and
in unionized firms. Teleworking arrangement
was very minimal at 4% or less.

48. Effects on Hiring of Regular and
Contingent Employees
 During the last 2 decades of deepening
globalization, new forms of hiring patterns
emerged in addition to the traditional
model of “full-time protected regular wage
employment”.

49. Composition of Employment, Non-Agricultural
Establishments with 20 or More Workers, 2004
(All Industry Groups)
Total Employment= 2.413 M
Owners/Unpaid Workers
1.1% (20,600)
13.1%
Non-Regular
(628,500 or 26%) Managers/Executives
86.0% (316,000)
Regular
(1.4 M or 60%) Rank and File Workers
(2.077 Million)
Source: 2003/2004 BLES Integrated Survey
Almost 70% were regular or permanent employees. They usually enjoyed job
security, salary adjustments and promotions. The rest were non-regular (or
contingent) workers comprising less than 1/3 (or 628,495) of rank and file
workers.

50. Extent of Non-regular (Contingent)
Employment
 In a survey of establishments employing
10 or more workers from 1991-1997, non-
regular workers have increased from
20.5% in 1991 to 28% in 1997.
 1997 was the start of the Asian financial
crisis.
 Non-regular workers were highest in the
construction industry at 65% or 47,985 out
of 84,794 workers in 2004.

51. Non Regular Workers in Establishments
Employing 10 or more Workers, 1991-1997
(in thousands)
% of Non-Regular Workers to Total Employment
1997 Others- Casuals, part-time,
pakyao
1995
Commission-Paid
1993
Contractuals
1991
Non-regulars
0 5 10 15 20 25 30
Source: BLES, Survey of Specific Groups of Workers (SSGW), various years. Excludes
agriculture, fishery and forestry.

52. Category of Non-Regular Workers in Non-
Agricultural Establishments with 20 or More
Workers, 2004
Total Non-Regular Workers= 628,500
Contractuals/Project
Based (47.4%)
Casuals (22.5%)
Probationary (19.5%)
Seasonal (5.5%)
Apprentices/Learners
(5.2%)
Source: 2003/2004 BLES Integrated Survey

53. Contractual/Project-Based Employment in Non-
Agricultural Industries with 20 or More
Workers, 2004
Contractual/Project-Based Workers Manufacturing (28.3%)
(Percent Distribution)
R. Estate, Renting & Bus.
Activities (24.1%)
Construction (13.4%)
Wholesale & Retail
(12.3%)
Hotels & Restaurants
(10.3%)
Other Industries (11.4%)
Source: 2003/2004 BLES Integrated Survey
Slice 7

54. Employment Patterns in the
Manufacturing Sector
 There were 894,932 workers in the
manufacturing industry in 2004
representing 37% of the 2.4 million
workers in non-agricultural establishments
with 20 or more workers.
 Their products ranged from food, apparel,
steel, cement, machineries and
equipment, chemical products, wood and
furniture products, etc.

55. Employment Patterns in the
Manufacturing Sector
 88.7% were rank-and-file workers. The rest
were managers/executives (3.6%),
supervisors/foremen (7.1%) and owners and
unpaid workers (0.6%).
 64% were regular & 25% non-regular.
 non-regular workers were composed of
contractual/project-based workers (9.4%),
casual (6.7%), probationary (4.1%), apprentices/
learners (3.1%) and seasonal (1.8%).

56. Employment Patterns in the
Manufacturing Sector
 Manufacturing also employed the most
number of output-rate workers- the piece-
rate workers, the pakyao/takay workers,
and the quota workers.
 There were very few hourly paid workers
(2.2%), part-time workers (0.4%), task
workers (0.1%) and commission workers
(0.1%) in manufacturing

57. Employment Patterns in the Retail and
Wholesale Trade Sector
 The retail and wholesale trade was the 2nd
biggest employer among non-agricultural
industries.
 It employed 367,703 in 2004 or 15% of the 2.4
million workers covered by the survey.
 Almost 59% of the rank and file workers were
regulars while 25% were non-regulars, the same
percentage as in manufacturing.
 Non-regular employment among the rank and
file was higher in the retail industry at 31.4%.

58. Employment Patterns in the Retail and
Wholesale Trade Sector
 Among the 94,155 non-regular employees,
36,724 were contractual or project based,
29,813 were casuals, 18,299 were on probation,
and 8,200 were seasonal workers.
 Output workers were very minimal in numbers at
8,714 or 2.4 or non-regular workers. More than
one half (6,346) were piece-rate workers and the
rest were paid by commissions (1,181) and
pakyao/takay (1,058).

59. Employment Patterns in the Transport,
Storage & Communications Sector
 There was a high number of commission
paid workers in the transport, storage and
communications industry at 25,177
workers or 13% of the total output rate
workers.

60. Hiring Through Labor Contractors and
Agencies
 30% of large sized enterprises (with 200 or more
workers) contracted out more jobs compared to
medium-sized (100-199 workers) companies at
25.8% and small-sized (20-99 workers)
companies at 15.2%.
 More foreign owned companies (45%) and
companies with foreign capital (36.6%) relied
more on subcontractors than locally-owned firms
(14%).

61. Hiring Through Labor Contractors and
Agencies
 Those serving the local markets only have
the lowest subcontracting activities at 15%
compared to those serving both local and
export markets at 32.6%.
 Those serving the export market only have
lower subcontracting activities at 26.3%.

62. Nature of outsourced jobs
 The most common jobs/services contracted out
were general administrative services (41%),
production processes/assembly activities
(26.3%) and transport services (20.9%).
 Manufacturing firms were the highest users of
subcontracted production and assembly
activities.
 Service firms subcontracted mostly
administrative and transport services.

63. Hiring through agencies
 Agency-hired workers were not
considered part of the workforce of the
business establishment.
 They were usually given employment
contracts of limited duration (usually less
than 6 months) and were not entitled to
benefits given to regular employees.

64. Hiring through agencies
 As 2003, agency-hired workers comprised
10.8% (316,000 workers) of the total number of
persons engaged in non-agricultural
establishments with 20 or more workers.
 The average number of agency-hired worker
was 21 per establishment. Security services
comprised the biggest bulk at 37%, followed by
production/assembly (23%), janitorial (15%),
marketing/sales (10.6%), general administrative
(3.3%), transport service (3%), and others
(7.5%).

65. Hiring through agencies
 The bigger sized enterprises hired more
agency workers than the smaller firms.
Companies with foreign capital, catering to
the export-oriented, or unionized hired
more agency workers than firms that were
Filipino-owned, catering to the local
market or non-unionized (Labstat 2005).

66. Conclusions and Recommendations
 Productivity-based compensation
arrangements intensified with
globalization. The leading industries in the
country like electronics, garments,
business process outsourcing, call centers
and other service establishments have
extensively used overtime pay, night-shift
differential and other premium pay,
commissions, tips and service fees and
payments-by-result.

67. Conclusions
 Several industries have increased their
hiring of contingent workers whose
compensation payments are productivity-
based. In manufacturing, workers are
paid on piece-rates. In the transportation
industry, workers are paid on commission
and in hotel, restaurant and education
services, many workers are hired on part-
time basis.

68. Conclusions
 Big firms, especially foreign owned and those
with foreign equity and are linked with the
international value chain hired more contingent
workers compared to smaller firms and those
that cater to the domestic market. Studies
showed that these firms have high levels of
compliance to labor standards and therefore
offer more decent work. One factor that
contributes to high compliance to labor
standards in big firms is the presence of trade
unions.

69. Conclusions
 It is disturbing to note that trade union
membership is on a rapid decline as
globalization deepens. This may be due
to the trade unions themselves as they
have been too traditional in their dealings
with employers, or that the employers are
becoming proactive themselves and have
openly been competing with unions in
empowering their workforce unilaterally.

70. Conclusions
 In the voluntary self-assessment of big
companies in compliance to labor
standards, non-unions like labor-
management committees, health and
safety committees and similar employee
groups are substituted for employee
representation.

71. Conclusions
 As was posited in this paper, variable
compensation contributes to the
competitiveness of enterprises operating
in the Philippines. High skilled and
productive workers as core regular
employees are retained by employers for
high productivity operations while the
hiring of contingent workers for services
and peripheral work helps them compete
with low wages in nearby countries.

72. Conclusions
 The main pitfall of productivity-based
compensation arrangement is that it may
lead to overwork that may result to health
hazards, higher risks of accidents and
unbalanced family and work life on the
part of the workers. This is especially true
for women workers as experienced in the
electronics, garments and call center
industries.

73. Conclusions
 In the hiring of contingent workers using variable
payment, there are many documented incidents
of compensation that are below labor and
human standards and therefore not leading to
decent work especially among the informal
sector workers. This is true in some manpower
cooperatives whose members are categorized
as self-employed or individual contractors. They
have used this as an excuse for exemption from
coverage of social security and other labor
standards.

74. Conclusions
 Productivity-based compensation arrangements
are also intensified in the informal sector
workplaces because the micro and small service
and agricultural enterprises are exposed to stiff
competition from imports as a result of low tariffs
and smuggling. Most of the workers here are
unpaid family workers, own-account workers and
domestic helpers. If the agricultural family
enterprises lose out to imported vegetables from
China for example, their meager earnings will be
further depleted and this will push them deeper
into poverty and undernourishment.

75. Conclusions
 The extent of government intervention in
compensation administration through the
minimum wage fixing, labor standards policy
formulation and enforcement, and provisions of
safety nets and subsidies to workers is weak to
moderate. Some employers and neo-liberals
have been advocating less, if not very minimal
state intervention. The left-leaning pressure
groups, on the other hand, are batting for more
government interventions in favor of the workers.

76. Conclusions
 Considering the desires of the extremist groups,
the status quo is still tolerable at present. More
government interventions should be done in
close partnership and cooperation with the social
actors that should include not only the
employers and the trade union organizations but
also other actors like the NGOs, informal sector
organizations, church, academe, etc. Changes
in the status quo should be formulated and
implemented on case-to-case basis- per
legislation, industry, region, locality or firm.

77. Conclusions
 Using the objectives of compensation
administration (by Srivas de Silva) as
standards (equity, efficiency, macro-
economic policy and proper allocation of
labor in the labor market), the government
and the major social actors have achieved
some positive and negative results.

78. 1. Equity
Positive Results Negative Results
 Increased earnings of  High unemployment and
formal sector employers underemployment
and workers in resulting to high levels of
electronics, garments, poverty and
BPOs, services and undernourishment, and
overseas employment income inequity among
classes and regions
 high level of compliance  - low levels of decent
with labor standards in work in the informal
the formal sector sector and in small and
micro-enterprises

79. 2. Efficiency
Positive Results Negative Results
 increased productivity  low productivity and lack
in the bigger of safety nets in the
enterprises in the informal sector and in
formal sector but small and micro
jobless growth enterprises
 flexible compensation  some flexible work
schemes contributed arrangements and
to competitiveness subcontracting lead to
and higher incomes of very low compensation
local firms and less decent working
environment

80. 3. Macro-economic stability
Positive Results Negative Results
 moderate growth  consumption-led
performance but laid growth, not
back in investment-led
industrialization
compared to the
South East Asian
standards
 strategies are short to  wanting in long-term
medium term only strategies

81. 4. Proper allocation of labor in the
labor market
Positive Results Negative Results
 advances in the  no long-term
administration of interventions in
overseas employment transforming OFW
earnings to investment-
led development
strategies
 moderate
 weakening investments in
accomplishments in
education and skills national HRD compared
training with other South East
Asian countries

82. Recommendations
1. Trade unions, NGOs, organizations of
consumers, farmers and other small producers
in partnership with the academe should set up
a professional Social Compliance Academy to
train and accredit certified assessors for social
and labor standards compliance, and to give
compliance awards to establishments and
organizations. The Academy should also
develop and maintain professional teams of
inspectors, trainers and remediation
consultants to assist workers and employers in
labor standards assessment and remediation.

83. Recommendations
The immediate target for capability building
are trade union members, labor-
management cooperation practitioners,
occupational health and safety inspectors,
environmental inspectors and assessors,
and other labor standards inspectors to be
accredited from among the employers,
trade unions, local government units,
NGOs, consumerists, small producers,
etc.

84. Recommendations
2. Expand tripartite mechanisms and social
accords at the level of local government units
(provinces, cities and barangays) preferably
through LGU ordinances / legislations. Involve
other social partners (NGOs, organizations
among informal sector workers, academe,
church, civic organizations, etc.) in the tripartite
bodies aside from government, employers and
trade unions. Conduct more researches and
documentation of successful tripartite practices
in LGUs like Marikina City, Naga City, etc. and
promote these good practices to others LGUs
for replication.

85. Recommendations
3. Strengthen the advocacy campaign for good
practices of labor and social standards in the
informal sector small and micro-enterprises
with focus on good organizational safety,
cleanliness and health practices by
cooperative efforts of government, NGOs,
trade unions, cooperatives, associations of
small producers and service providers, etc.
Target specifically labor-only contractors and
other service providers including those that are
not complying with present labor laws and
standards.

86. Recommendations
4. Actively support the various programs of
employers for good practices of CSR
especially those that directly uplift the poor
segments of workers and their communities.
Specific projects that need active support are
the “big-brother, small brother” technology
transfer and business linkaging, education and
skills upgrading program in partnership with
the government and private educational and
training institutions, patronize and improve the
quality of local products campaign
(“tangkilikan”), anti-smuggling and anti-
dumping campaign, etc.

87. Recommendations
5. Pressure government to minimize direct
deductions from workers salaries and wages in
form of taxes and other mandatory
deductions/contributions. Support government
programs that uplift the workers’ living standards
like price monitoring of basic goods and services
like transportation, rent, basic food items,
education, skills training, health, etc. These
measures will help increase incomes of the poor
workers and reduce poverty and
undernourishment in the country.

88. Recommendations
6. Support the campaigns of multi-sectoral
organizations like the Fair Trade Alliance
for the calibration of the country’s tariff
rates based on specific industry’s level of
preparedness and competitiveness.
Government negotiators should actively
consult and involve industry players in
their negotiations on multi-lateral and
bilateral trade agreements.

89. Recommendations
7. Uphold the rights of trade union to organize
workers and bargain collectively. Trade unions
should adjust their programs and activities
towards social movement unionism and
international cooperation among trade unions
and other civil society organizations. Support
new legislative actions that will uplift the plight of
informal sector workers like the domestic
helpers, market and sidewalk vendors, public
utility drivers including tricycle drivers and
operators, women workers, farmers and
agricultural workers, cooperatives, etc.

90. Recommendations
8. Actively support the campaign of all social
partners- government, employers, workers,
etc. to preserve and expand jobs in the country
through various programs and interventions
like entrepreneurship development,
government pump-priming infrastructure
projects through labor intensive construction
methods, maximum usage of indigenous
materials, and others that have already been
mentioned.

91. Thank You.