Workers and the Poor Bear Brunt of Economic Competition

BAYAN, Main Events in the Philippines July—December 1998, [7 January 1999]

About 420 workers joined the ranks of the unemployed every day from January to June this year, about half of whom were hit with permanent layoffs. According to Congressman Ernesto Herrera, the Philippines now has one of the highest unemployment figures in Asia with 13 million people or 21% of total population out of work. Intensifying competition brought about by the deepening economic crisis is management's excuse to increase the exploitation of the workers. Only 40.3% of establishments nationwide are complying with the general labor standards (which are unjustly low already). For example, almost a quarter of companies are violating the minimum wage law. Subcontracting, although not a violation and even encouraged by the government, is affecting more workers as the number of companies that use subcontracting increased by more than half since 1994. Given these conditions, it should not be surprising that the number of strikes increased 45 percent in the first half of the year.

Other developments indicate that people's lives became more miserable due to the crisis. Police relates the increasing use of drugs with growing poverty, while researchers give the same explanation to the rising number of abortions. That women are hit extra hard by the crisis can be illustrated by the increasing number of women who resort to prostitution in order to make a living. The World Bank predicts that the worst is still to come for the poor. One of its recent researches notes that the social impacts of the crisis have been delayed but that they will become more apparent as time passes by.

The government shows no indication of intention to alleviate the impact of the crisis on the health and lives of the poor. On the contrary, it is giving priority to the military, seemingly anticipating the need to repress people's protests. In the P579 billion 1999 national budget, health is only the tenth priority with a P11.8 billion share, about 2%. The military gets the second biggest slice of the pie, P51.6 billion=97 almost 9%.

The 1997 Family Income and Expenditures Survey gives a good picture of the social consequences of the economy's boom during president Ramos' term. Although the average family income has grown slightly between 1994 and 1997, inequalities between the rich and the poor became wider than ever. The richest 10% got 39.7% of the national income in 1997, much more than their 35.5% share in 1994. The share of the poorest 30%, to the contrary, dropped from 8.8% in 1994 to 7.8% in 1997. In 1994 the average income of the top 10% was 19 times higher than the income of the poorest 10%; but in 1997 their slice of the pie was 23.8 times bigger. The National Economic and Development Authority expects that figures for 1998 will be even worse. Income redistribution is indeed happening in the Philippines—from the poor to the rich!