Aquino’s legacy| Proliferation of contractual, seasonal, low-quality jobs

Labor Day 2016
BULATLAT FILE PHOTO. Labor day protesters marching to Mendiola (Photo by M. Salamat /

The World Bank report noted that around three-quarters of all jobs and two-thirds of urban jobs in the Philippines are informal. Among wage workers, 6 out of 10 are hired informally, it said. “Informal wage workers lack employment contracts and social insurance, and are not protected against unfair dismissal.”

Related story: Will contractualization end under Duterte administration?


MANILA – When President Benigno Aquino III delivered his final Independence Day address to the nation last June 12, he proudly said he has fulfilled his promise that: “By the time I step down, I will leave behind a country that is better than we found it.” He said the economy under him transformed from being the “Sick Man of Asia” to “Darling of Asia.”

He said the graduates know of this, as “they can choose from a selection of jobs, as opposed to having to go through so much hardship looking for one.”

His self-backpatting was expectedly greeted with skepticism. Almost 1.2 million unemployed at the start of this year are 15 to 24 years old, and another 1.2 million unemployed are 25 to 34 years old. The majority of unemployed are in prime working age, high school and even college graduates; they were the ones counted as unemployed even as others like them were listed as employed just because they worked for two hours in the last two weeks when they were surveyed by the government.

Even among those with jobs, “in-work poverty” has been their lot.

President Aquino’s jobs policies have for six years been described as “cheap labor policies” by labor groups. The majority are in low-paying informal, precarious jobs. And those in establishments are in low-paying, insecure non-regular jobs.

The labor center Kilusang Mayo Uno (KMU) noted that it is telling how contractualization or endo (end of contract) has become an election issue last May 13. From the administration of Gloria Macapagal-Arroyo and moreso under Aquino, contractualization in practice has meant circumventing the supposed ban on it, as incoming Labor Secretary Silvestre Bello noted last week.

Contractualization became a widespread work arrangement that directs workers to perform tasks considered as essential to the employer’s business, but the worker do not get regularized even after more than six months of satisfactory stint on the job. That is because his or her contract is always reaching “endo” (end of contract) before the prescribed six months for the worker’s regularization.

This way, the employer saves on labor costs and gains greater freedom to hire and fire as much workers as the business situation needed. Contractuals and the like receive only the minimum wage or lower, and hardly any benefit, said various groups protesting contractualization.

Incoming Labor Secretary Silvestre Bello noted that those from DOLE Department of Labor and employment) have their eyes closed to this violation.

More Filipinos at work but still dirt-poor

The World Bank’s latest “Labor Market Review: Employment and Poverty in the Philippines” report, issued two weeks ago, countered “perceptions” and insisted that “economic growth in the last 10 years has created enough jobs to absorb the growing labor force.”

However, it noted that jobs that can lift the Filipino out of poverty are what are needed.

Non-government economic thinktank Ibon Foundation has said as much for years, describing the jobs generated under Aquino as low-quality.

The World Bank report noted that around three-quarters of all jobs and two-thirds of urban jobs in the Philippines are informal. Among wage workers, 6 out of 10 are hired informally, it said. “Informal wage workers lack employment contracts and social insurance, and are not protected against unfair dismissal.”

Jan Rutkowski, lead economist at the World Bank’s Social Protection and Labor Global Practice, and the leading author of the report, said “The scarcity of ‘good jobs’ reflects the structure of the Philippine economy where low- value-added activities predominate.”

But whereas progressive labor groups are demanding that the government start implementing genuine agricultural reforms and national industrialization, to address that faulty structure of the economy, the World Bank’s economist recommends more of last decade’s policies of liberalizing the investment climate. Ibon said those policies had been proven as flawed.

The World Bank’s latest jobs report revealed that in the last decade, the Philippine economy has been growing at an average of 5.3 percent, while the working population and jobs have been growing at an average of 1.8 percent and 1.9 percent, respectively. Labor productivity has also been growing at 3.4 percent a year. But the growth of real wages – or wages adjusted for changes in prices of goods and services – has yet to catch up with the rising productivity.

World Bank concluded what many labor groups have been saying — “many workers remain poor.” But whereas the labor groups have been demanding wage hikes, union rights, and outright ban on contractualization, which, they said, brings down wages and destroys unions, the World Bank wants the Philippine government to do the opposite. It recommended reducing “the high cost of doing business in the formal sector.” The World Bank prescribed “flexible labor regulations” or lesser and simpler policies.

‘Flexible’ labor resulting in more low-paid contractuals, seasonal workers

If the majority of employed Filipinos are in low-paying insecure informal jobs, as the World Bank noted, are the minority of employed in the formal economy better off?

More than half the 38.7 million people listed by Philippine Statistical Authority as employed in the Philippines in 2014 are wage and salary workers (E-CLS-April%202016.pdf). Only 7.78 million are working in establishments in 2014, of which 4.75 million are employed in establishments with 20 or more workers.

From another survey by PSA, the latest is 2013/2014 Integrated Survey on Labor and Employment (or ISLE), it said that in 2014, establishments with 20 or more workers have up to 1.336 million considered as non-regular employees.

It counted as non-regular workers those who are contractual/project-based workers, probationary workers, casual employees, seasonal employees and apprentices/learners.

PSA excluded in its category of “non-regular workers” the agency-hired workers “engaged” by said establishments. These numbered 622,000 in 2014 – bringing the total non-regulars that year, as estimated by ISLE, to 1.96 million.

contractual jobs
Latest government data on non-regular workers show 44 percent of employed Filipinos in establishments with 20 or more workers are non-regular and agency-hired workers (Source: Phil. Statistics Authority)

Unionists interviewed by Bulatlat said agency-hired workers are another type of non-regular workers in establishments, except that they are supposed to be under the employ of the contractor and not by the establishment contracting the services. As such, they may be working for the same company continuously for years, but they are often not regularized and when they form a union, they are fired by terminating the service contracts with their agencies.

In various establishments today, workers groups such as the KMU said there is such a thing as “direct-hired” and “agency-hired” contractuals or project-based employees, (all-year round) seasonal employees – all are non-regular, easily hired and fired, with less wages and less to no benefits.

Based on PSA estimates, there are about four non-regulars in every 10 employed in establishments with 20 workers or more. Together, the non-regulars (by PSA estimates) and the agency-hired comprise 44 percent of these employed in private establishments.

Non-regulars number more compared to regulars in construction (66 percent), agriculture, forestry and fishing (55 percent), mining and quarrying (52 percent), manufacturing (47 percent) accommodation and food services activities, real estate activities (50 percent).

Cases handled by affiliates of Kilusang Mayo suggest though that the proportion is higher on the ground. In Southern Tagalog which has the biggest number of employed in the last few years, 8 to 9 per 10 employees are non-regulars.

The Aquino administration showed faster increases of non-regulars than its predecessor. PSA data show that from 2010 to 2014, contractual workers in private establishments increased 51 percent; seasonal workers increased 254 percent; agency-hired increased 82 percent; the commission workers by 219 percent. (

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