Towards a Magna Carta for Workers  in the Philippine Informal Economy    Presented by Josephine Parilla*

Broad based policy advocacy for a rights-based  legislation for informal workers, who now comprise 24.6 million or 76 percent of total employed in the Philippines, took a significant leap with the formation of MAGCAISA (Magna Carta for the Informal Sector Alliance) in October 2OO7. 

MAGCAISA is a loose coalition of POs, NGOs and academe-based institutions with a long record of  involvement in informal worker issues.  The driving forces of the coalition include Homenet Philippines, which has 23 groups dealing mostly with homebased workers working together under its banner; the Association of Construction and Informal Workers (ACIW) and the National Union of Building and Construction Workers (NUBCW);  ASAPHIL, which includes tricycle and other small transport operators;  National Rural Women’s Congress (PKKK) and  ALMANA,  which focus on farmers and fisherfolk.

Supporting institutions include the Workers in the Informal Sector Council (WISC) of the National Anti-Poverty Commission (NAPC),  the Center for Labor Justice of the University of the Philippines (U.P.)School of Labor and Industrial Relations (SOLAIR) as well as the Department of Women and Development Studies of the  U.P. College of Social Work and  Community Development .

A Bit of History

 Almost identical bills  towards a Magna Carta for Workers in the Informal Sector (MACWIE) were filed  by Reps. Juan Angara and Roseller Barinaga in the 13th Congress. These bills became the subject of study sessions by Homenet Philippines and the latter’s comments were formally presented in a forum and submitted to the two sponsors in mid-2OO6.  However, these comments were not integrated by the sponsors.  Homenet then resolved to puts its comments and other improvements in the form  of a bill to be presented to possible authors in the 14th Congress.

The need for a Magna Carta was discussed again in July 2007 during the  UPSOLAIR Conference on the Informal Sector co-sponsored by Homenet Southeast Asia  and ACIW, among others.. Reps. de Del de Guzman, Risa Hontiveros Baraquel and Erin  Tanada , who were present, signified their support for the broad concept of a Magna Carta for Informal Workers.

When the 14th Congress was convened in July 2OO7, the Angara version was refiled.  Soon after, the Senate version of the Angara bill was filed by Senator Zubiri.  Homenet, ACIW and other groups held several meetings (hosted  by DSWP) to  develop a  bill with inputs from informal workers groups and with the benefit of  prior discussions during the UP SOLAIR conference as well as  comments from the Department of Labor and Employment (DOLE) gathered and presented by some National Anti-Poverty Commission­ (NAPC).  Workers in the Informal Sector Council  ( NAPC WISC) organizations were also actively  involved in the meetings. Homenet then was actively looking for an author to the bill it developed to make sure that inputs from informal workers groups are included.  Rep. Dan Fernandez consented to author the bill in a dialogue with informal workers organizations sponsored by DSWP and Homenet in July 2OO7.

Rep. Fernandez officially  filed House Bill 1955 towards a Magna Carta for Workers in the Informal Economy  early   in August 2OO7.  This was followed by a press conference on 14 August where the author explained the bill’s merits to members of media.  This was hosted by DSWP  with the support of representatives of Homenet and other informal workers organizations (KAKASAHA, PATAMABA, ACIW, NUBCW, ASAPHIL, etc.) who explained the basis of  their support for the bill. Since then, Rep. Fernandez has been interviewed several times by the media on HB 1955. And  a primer in Filipino to popularize the contents of the bill has been developed by Homenet and its allies.

As of this writing, several senators have manifested interest in filing their own bills similar to HB 1955. It is anticipated that the various bills on the Magna Carta will be discussed, debated, negotiated, and finally reconciled towards passage of a single version hopefully before the end of the 14th Congress.

The campaign for HB 1955 had a big boost in October  2OO7 when it was presented in a forum sponsored by the Asian Labor Network for International Financial Institutions (ALNI) and  the National Anti­-Poverty Commission. Workers in the Informal Sector Council (NAPC WISC) .During this forum, representatives from the Department of Labor and Employment (DOLE), Department of Interior and Local Government (DILG) and the Department of Trade and Industry (DTI)  made generally favourable comments and some constructive recommendations.  On December 13, a representative of Homenet Philippines discussed  the proposed Magna Carta  with major trade union leaders during the Labor Agenda Forum sponsored by the FES, and appealed for trade union support in the spirit of unity of all workers, formal and informal.

Soon after the October  ALNI- NAPCWISC forum, MAGCAISA was born and  in its November 2OO7 meeting, its members  approved a comprehensive campaign framework and plan systematized and  developed by the DSWP for the Alliance, based on previous discussions  on campaign strategies of MAGCAISA founding members. . Part of this plan was the conduct of an advocacy skills training for MAGCAISA leaders  held  in January 2OO8 (through the initiative of DSWP) , and the crafting of a policy paper establishing the legal basis of the Magna Carta on firmer ground. The members also did some brainstorming on next activities and decided to approach FES Manila  for possible support.  Since Homeworkers and Informal Workers Days are celebrated during the first week of May, MAGCAISA  members thought that a joint celebration highlighting the Magna Carta campaign could be conducted, with subsectoral representation from various groups working with homebased workers, vendors, small transport operators, non-corporate construction workers, barangay health workers, waste pickers and working youth.   FES Manila approved the project supporting the joint celebration, including the production of a participatory video highlighting various subsectoral issues and the need for a Magna Carta for Workers in the Informal Economy.

State Policies Under H.B. 1955

H.B. 1955 makes the following state policies:

• Promotion of  the total well-being of all workers in the informal economy
• Ensuring their human dignity, economic advancement and access to justice by providing timely services including social, political, economic and legal
• Recognition of the roles and contributions of workers in the informal economy and making them visible in the national and local statistics
• Development and enhancement of  their entrepreneurial skills and capabilities so that they can become more productive and self-reliant citizens thereby ensuring participation in mainstream economic activities;
• Promotion of gender equity and equality and the protection of women workers in the informal economy against gender-based discrimination, exploitation and abuse; advancement of women’s social, economic, political, and reproductive rights; and improvement of their access to social protection and participation in decision-making bodies
• Protection of vulnerable groups in the informal sector such as: children, differently-abled persons, and those from ethnic communities from discrimination, exploitation, abuse and harassment as well as from performing work hazardous to their occupational, physical, mental, emotional, reproductive and spiritual health; and
• Progressive elimination of child labor in the informal sector through the creation of more quality jobs for adults, effective enforcement of laws against child labor, elimination of gender-based discrimination against girl child workers;  improved access to universal education and social protection, and elimination of cultural factors that tolerate, even accept child labor.

Defining the Informal Sector and  its Subsectors

HB 1955 defines the informal sector as “ Units engaged in the production of goods and services with the primary objective of generating employment and incomes to the persons concerned. It consists of household unincorporated enterprises that are market and non-market producers of goods as well as market producers of services. These enterprises are operated by own-account workers, which may employ unpaid family workers as well as occasional, seasonally hired workers. These enterprises may also be owned and operated by employers which may employ less than 10 employees on a continuous basis.”  (NSCB Resolution, Nov. 8, 2002)

Identified subsectors include the following:

• small farmers owning land not more than three hectares; small fisherfolk/operators owning boats of three  gross tons or less and other fishing equipment; rural workers who are tenants or sharecroppers, laborers; fisherfolk who are without boats or fishing equipment but share in the first catch;

• home-based workers who are  independent producers of goods or services; industrial homeworkers – workers involved in a system of production under which work for an employer or contractor is carried out by a homeworker at his/her home and where materials may or may not be furnished by the employer or contractor; self-employed who are engaged in sub-contracting arrangement with other enterprises;

• vendors, whether with stalls or without permanent workplace including street hawkers or those plying their goods and trades in the streets and those engaged in sari-sari stores with operating capitalization of not more than one million pesos (P1,000,000.00) excluding land and building;

• drivers of  modes of transportation on land and sea whether motorized or not, including two wheels such as habal-habal, calesa,; three wheels such as pedicabs, tricycles; four wheels such as jeepneys, buses; boats one  ton and below; including ‘barkers’, fare collectors, dispatchers and other workers who share income with self-employed or unincorporated operators; operators of  jeepneys, tricycles, pedicabs, taxi, and other vehicles or transportation whose capitalization is not more than one million pesos (P1,000,000.00) excluding land and building;  

• “on-call” domestic workers which refer to persons who provide service to households such as maids, cooks, family drivers, gardeners and baby sitters on a live-out basis and “on-call” arrangement only;

• non-corporate construction workers; small scale miners doing their own product processing; including those involved in small scale mining and quarrying with capitalization of below one million pesos (P1,000,000.00);

• workers of Barangay Micro Business Enterprises (BMBEs); unorganized cargo handlers; workers engaged in producing seasonal products; “on-call” workers in the entertainment, movie, and media such as bit players, stuntmen and women, crew, make-up artists, etc.; volunteer workers in government and non-government entities who only receive allowances or honoraria. These include but are not limited to: barangay health workers (BHW), barangay tanod, barangay nutrition scholars (BNS), barangay daycare workers, and volunteers in non-government or people’s organizations; and unpaid family members,  or workers receiving allowances and seasonally hired workers who are engaged in micro-enterprises or assist unincorporated household enterprises.

Shift to Informal  Economy

Informal economy refers to “all economic activities by workers and economic units that  are – in law or in practice-not covered or insufficiently covered by formal arrangements.”

Women in Informal Employment Globalizing and Organizing (WIEGO), in their website,  highlights the following characteristics of the informal economy, justifying the shift in terminology from what used to be called just the informal sector:

The informal economy is ‘here to stay’ and expanding with modern, industrial growth. It is a major provider of employment, goods and services for lower-income groups. It contributes a significant share of gross domestic product (GDP). It is linked to the formal economy by  producing for, trading with, distributing for and providing services to the formal economy.

Much of the recent rise in informal employment is due to the decline in formal employment or to the informalization of previously formal employment relationships. It is made up of a wide range of informal occupations – both ‘resilient old forms’ such as casual day labour in construction and agriculture as well as ‘emerging new ones’ such as temporary and part-time jobs plus homework for high tech industries. Most entrepreneurs and the self-employed are amenable to, and would welcome, efforts to reduce barriers to registration and related transaction costs and to increase benefits from regulation; and most non-standard wage workers would welcome more stable jobs and workers’ rights.

Informal enterprises include not only survival activities but also stable enterprises and dynamic growing businesses, and informal employment includes not only self-employment but also wage employment. All forms of informal employment are affected by most (if not all) economic policies.

WIEGO also provides the following information showing the worldwide significance of  informal employment :

Informal employment broadly defined comprises one-half to three-quarters of non-agricultural employment in developing countries: specifically, 47 per cent in the Middle East and North Africa; 51 percent in Latin America; 71 per cent in Asia; and 72 per cent in sub-Saharan Africa. (WIEGO website).

Non-standard wage employment, much of which is informal, is significant in the developed world. In 1998, part-time work represented 14 per cent of total employment for the OECD countries as a whole and more than 20 per cent of total employment in eight of these countries.

In the countries of the European Union, temporary work comprises 11 per cent of total employment.

Home-based workers and street vendors are two of the largest sub-groups of the informal workforce: with home-based workers the more numerous but street vendors the more visible of the two. Together they represent 10-25 per cent of the non-agricultural workforce in developing countries and over 5 per cent of the total workforce in developed

Strategic Issues and Concerns of Workers  in the Informal Economy

H.B. 1955 addresses the following concerns of workers in the informal economy, identified through decades of advocacy and network building:

• INVISIBILITY - They are not recognized and valued as “legitimate” workers despite their contributions to the economy.

• LACK OF SOCIAL PROTECTION - They are  largely uncovered by social protection mechanisms of the government
• LACK OF ACCESS TO JUSTICE - No alternative dispute mechanisms for them.
• LACK OF PARTICIPATION AND  REPRESENTATION -They are severely under-represented in policy making bodies relevant to their issues/

Decent work deficits are also addressed by H.B. 1955. For example, most of the workers in the informal economy are unorganized. Women in the sector are saddled with problems of multiple burden, discrimination, abuse and harassment, etc. because they are women. These on top of the issues they face as workers in the informal economy. 

Child labor, which exists side by side with the informal sector not only violates children’s rights, it robs our children of their childhood.

Moreover, they are often subject to exploitation by unscrupulous employers, both formal and informal, who make them work long hours at very low wages and without benefits. Their work environment is not subject to regulation and monitoring often exposing them to occupational safety and health hazards.

What HB 1955 can offer to Workers in the Informal Economy

H.B. 1955 makes workers in the informal economy visible through a) the provision of simple standard registration and accreditation system ( Sec. 5);  and b) inclusion of relevant information on workers in the informal economy in state database at the national ( Sec. 18 [h]) and local (Sec. 21. [k]) levels.

H.B. 1955 makes available to accredited workers in the informal economy a comprehensive package of programs and services including:

• medical / health insurance through PhilHealth (Sec. 24)
•  social security coverage through SSS ( Sec. 25)
• GSIS coverage for volunteers of government instrumentalities ( Sec. 26)
• alternative schemes of providing social security   Sec. 27)
• education and training ( Sec. 21.: f.,g.,i.,& m.)
• development/enhancement of entrepreneural skills ( Sec.9.:c.,d.,& e.; & Sec. 21.:h.)
• support to organizing workers in the informal economy ( Sec. 18.:g, i.; & Sec. 21.: j., l.);

H.B. 1955 makes workers in the informal economy contribute to government coffers through:

• Payment of registration / accreditation fees (Sec. 5); and
• Payment of annual dues ( Sec. 6.)

H.B. 1955 fully respects and promotes rights of workers in the informal economy such as the right to :

• self-organization  and participation in  decision-making processes relevant to the concerns of workers in the informal economy (Sec. 15.: u; Sec. 16; Sec. 18.:g; Sec. 21.: b)
•  equal treatment before the law ( Sec. 21 : n)
• accessible social protection and basic services including but not limited to health services and low-cost housing to enable IS members to have a humane quality of life (Sec. 24-27; 44; 49)
• safe conditions in the workplace that will safeguard their general and reproductive health ( Sec. 21 : i; Sec. 38)
•  be free from any form of discrimination, violence, sexual exploitation, harassment and abuse ( Sec. 33- 39)
•  common workplaces, merchandising centers, and inventory bulk-buying centers; common facilities and capacity building to access E-marketing
•  alternative dispute resolution mechanisms and processes; as well as equal access to justice through appropriate mechanisms (Sec. 18.: j; Sec. 43)

H.B. 1955 is responsive to the needs and issues of women in the informal economy. The bill:

• provides financial assistance to women – led livelihood initiatives ( Sec. 9.: a, b)
• enhances participation of women in decision – making processes ( Sec. 15.: s, u, v; Sec. 16.);
• develops sex – disaggregated database ( Sec. 18.: h; Sec. 21.: k); and
• provides women – friendly standards ( Sec. 33 - 50)

H.B. 1955 develops standards in relation with work in the informal economy in the areas of:

• wages (Sec. 31, 32, 40)
• conditions of work ( Sec. 28; 32 – 39; 41, 44 – 45; 51 – 54)
• benefits ( Sec. 46 - 50)

H.B. 1955 creates government instrumentalities mandated to develop and implement programs for workers in the informal economy:

• Informal Economy Development Authority (IEDA) (Sec.14 – 20)
• Workers in the Informal Economy Local Development Office ( WIELDO) (Sec. 21 - 22)

The bill offers a comprehensive, integrated, rights-based and gender-responsive policy instrument to address empowerment issues and bring informal workers  into the mainstream of the Philippine economy.