An Industrial Policy for the Philippines: Correcting Three Decades of Error

One key outcome that the restructuring of the Philippine economy has produced is the deterioration of the quality of employment for the greater majority. In addition to high rates of underemployment, there is also a high level of informality of jobs. The leading employers, services (employing 20.7 million or 54% of workers) and agriculture (12 million or 30.1%), are characterized by much lower productivity and income than industry/manufacturing. (NSO 2014)

There is also a trend towards informalization of employment associated with insecurity and low labor standards. Comparing the Updated List of Establishments and the Labor Force Survey, in 2012, only 21 out of every 100 employed workers are in formal establishments. Over 30 million Filipinos work under informal employment conditions. According to the Informal Sector Survey 2008,informal employment comprises of (1) own-account workers and employers employed in their own informal enterprise, (2) contributing family workers, irrespective of whether they work in the formal or informal sector, (3) employees holding informal jobs, whether employed by formal enterprise, informal sector enterprise, or as paid domestic workers of the households, and, (4) own-account workers engaged in the production of goods exclusively for own final use by their household.

Informality even in the formal sector is also high. Formal sector jobs are also associated with informal conditions, in particular, the absence of formal contracts, benefits and social protection. (NSO 2012a, 2012b, and 2008)

Thus, in addition to pursuing general social programs such as in health and education, we believe that an industrial policy will play a crucial role in facilitating the upgrading and transformation of more productive sectors. In the process, this will create better quality jobs for Filipinos presently excluded from the narrow base of the country’s economic growth.

True industrial policy is purpose-driven for meeting social objectives. The vision of sustained growth and industrialization with social justice embodied in the 1987 constitution remains very relevant today.

The time to correct three decades of policy error is now.


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