Philippines: Will the next president help the working poor the economy is leaving behind?
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Philippines: Will the next president help the working poor the economy is leaving behind?

THE PHILIPPINES’ rise as one of the world’s fastest growing economies under its current administration is dimmed by the fact that it remains one of Asia’s most unequal societies. The promise of continued economic growth and commitment to President Benigno Aquino III’s anti-corruption slogan of “Daang Matuwid” or “Straight Path” has failed to buoy the ruling party’s presidential standard bearer in pre-election surveys.

Veteran politician Mar Roxas has failed to dominate over a self-confessed vigilante inexperienced in national politics, a Senator whose citizenship is in question, and the incumbent vice-President who is currently facing allegations of serious corruption. Economic gains have failed to resonate among many who still feel left behind, and surveys show that most voters want new leadership and new programs to turn things around.

Typical of any electoral race, all five presidential candidates are pandering to the clamour for genuinely inclusive progress. One of the campaign issues emblematic of the growth disparity is the matter of labour contractualisation – the widespread use of short-term and unprotected temporary work arrangements that according the Trade Union Congress of the Philippines is affecting 35 million of the country’s 67.1 million workers. All five candidates have vowed to put an end to this deeply entrenched practice. A history of government inaction on the matter and propensity to embrace employer friendly policies make it hard to imagine how any of them would deliver.

Originally reserved for peripheral business functions such as security and janitorial services, labour contractualisation has become the norm in the Philippines, practised in various forms across practically all economic sectors including manufacturing, retail, services, private education, administrative and support services, finance, insurance, and business process outsourcing.


Outgoing Philippines President Benigno Aquino failed to live up to his promises. Pic: AP.

Contractualisation has been a routinely used tool for companies to cut costs and circumvent laws on security of tenure. It has denied millions of workers labour protections and benefits reserved for regular employment, including overtime and holiday pay, a mandatory 13th month pay, and retirement benefits. It has nurtured a class of “working poor” who are unable to meet basic needs and are constantly at risk of losing employment, while ensuring higher income margins for employers. The contractualisation of work that qualifies for regular employment has become the Philippines’ own version of poverty-level “race to bottom” wage and benefit policies in neighbouring countries.

In the country’s largest supermarket chains, for example, most essential staff such as cashiers, baggers and merchandisers are on five-month contracts to avoid regularisation after six months, as required by law. The workers are usually repeatedly re-hired, becoming “regular” contractual workers. Similarly, construction workers are hired by firms from project to project, such that even if a worker has served the same firm for decades, he/she would not be able to claim the legal retirement pay of half a month’s salary for each year of service.

“The biggest challenge for the next president is to ensure that the benefits of economic progress are broadly shared – something that the current administration has failed to do.”

Yet this is just one of many persistent issues that have left millions of workers behind in the Philippines’ supposed economic rise. Four days after the elections, it will be a year since the Kentex factory fire killed 72 workers. Workers’ occupational safety and health remain at risk due to insufficient and ineffective legal protections, and corrupt local governments that allow unsafe workplace practices to proceed. Other issues remain such as low social protection coverages, persistent gender disparities, and emerging threats to the freedom of association.

Voter preferences indicate that most Filipinos do not want more of the same, even if the same means improved credit ratings, low debt ratios, or a well-functioning stock market. The biggest challenge for the next president is to ensure that the benefits of economic progress are broadly shared – something that the current administration has failed to do as proven by poverty statistics. More than a quarter of the population is impoverished; the decline in poverty has been much slower than in neighbouring countries’; the government failed to meet its millennium development goal of halving extreme poverty from 33.1 percent in 1991 to 16.6 percent in 2015.

Putting an end to the pernicious practice of labour contractualisation will be a good start for the next Philippine president, and whoever wins can expect to be held to their promise. The next chapter in the story of the Philippines’ economic ascent should include a major push for improved labour rights protection and complementing growth with truly productive and decent employment that will take the working class out of poverty and allow them to have their fair share of the pie.

Bobbie Sta. Maria is the Senior Researcher & Representative for Southeast Asia of Business & Human Rights Resource Centre, an international non-profit that works to advance human rights in business and eradicate abuse.